NEW DELHI: India has moved to cancel a contract with Anglo-Italian firm AgustaWestland for the purchase of luxury helicopters for VIPs following a corruption scandal, a Defence Ministry source said yesterday.
“The Defence Ministry has issued a final show cause notice to AgustaWestland,” the top ministry source said.
“They have been given 21 days to respond,” the source said of the notice informing the company of the intended cancellation.
AgustaWestland confirmed receiving the notice from the Indian Defence Ministry. “It (the notice) will be reviewed and the company will respond appropriately,” it said. India suspended the ¤556m ($753m) deal earlier this year after Italian investigators began looking into allegations that AgustaWestland paid bribes to win the contract.
The Italian boss of AgustaWestland’s parent company Finmeccanica was arrested in February over the case — touching off a firestorm in India, where the Congress-led government has been battling a string of graft scandals ahead of elections next year. India signed the deal in 2010 for 12 helicopters from AgustaWestland, which beat competition from American and Russian rivals.
India’s auditor general said in an August report the Defence Ministry “deviated from procurement procedure and tender on several instances in the deal”, including altitude requirements.
The purchase also came under scrutiny from Italian investigators probing allegations the Italian group had broken the law by paying bribes to foreign officials. AFP