Agusta gets show-cause notice on copter deal

NEW DELHI (TIP): The Ministry of Defence (MoD) has issued a show-cause notice to AgustaWestland, a subsidiary of Italian major Finmeccanica, seeking the cancellation of the contract for the purchase of 12 helicopters at a cost of Rs 3,500 crore. The notice was issued on October 21 and the company has been given three weeks to respond. “Documents available with the MoD had lead to the showcause notice,” official sources said. The MoD has cited the ‘pre-contract integrity pact’ in issuing the notice. The pact says that no bribes had been paid to win the contract while Italian prosecutors have claimed in the court to have traced payments of Rs 350 crore made as kickbacks to Indian as well as Europeans. Among those facing charges is former IAF Air Chief Marshall SP Tyagi (retd). The first cancellation notice was issued on February 15 and it had come just three days after Giuseppe Orsi, CEO, Finmeccanica was arrested in Italy. The notice was based on media reports and reports from the Indian Embassy in Rome. The notice issued now is final and is based on documents the CBI has collected from Italian prosecutors and provided to the MoD, officials explained. The payments to the company were put on hold in February. AgustaWestland had issued a press statement on October 4, saying it would invoke the arbitration clause.

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