AgustaWestland Scam – ban lifted on Leonardo Helicopters but conditions apply

India has decided to lift the ban on Leonardo, the Italian defence manufacturing giant, of which AgustaWestland, involved in the INR 3,600 crore VVIP helicopter scam is a part. 

The clearance to Leonardo is “conditional,” a highly-placed government official said. The ban will go, but Investigation of the case, entrusted to the CBI or Central Bureau of Investigation and also, the ED or Enforcement Directorate can continue. 

(Image Courtesy – OpIndia)

When it comes to financial issues with India, Leonardo must start from the beginning. As a result, Leonardo is unable to make any commercial claims against India based on previous agreements. When the payoffs to Indian officials became public in 2013, the ban was enacted. The ban was pushed by then-Defense Minister AK Antony. The company (AgustaWestland was formerly known as Finmeccanica) has been restructured and renamed since then.

Since the ban, Indo-Italian ties have improved with the Marines case being sorted out. Lifting of the ban may help India in two ways

  1. First, it will allow India to access more top-class weapon systems. Just one example is the Black Shark torpedo that the Scorpene submarines of the Indian Navy need. These torpedoes are made by WASS, part of the Leonardo group.
  2. Secondly, lifting the ban will allow some leverage on Leonardo when it comes to the sale of weapons to Pakistan. A six-member Pakistan Navy delegation, headed by Rear Admiral Abdul Samad, had visited Leonardo’s Torpedo Production Centre for weapons demonstrations. 

The decision comes after the defence ministry consults with top law ministry officials. Both the Italian ambassador Vincenzo De Luca and Foreign Secretary Harsh Vardhan Shringla, have recently said that discussions between both countries were going on. The two Prime Ministers, Narendra Modi and his Italian counterpart, met on the sidelines of the G-20 summit in Rome a few days ago.

AgustaWestland AW101 (Image Courtesy – Military Wiki)

One possibility is a partial lifting of the ban, with the helicopter vertical remaining prohibited but the rest of the area cleared. The conditional ban lifts Leonardo’s ban, but the important investigation into who received the multi-million Euro kickbacks can continue.

The ban was imposed three years after information about the purchase of 12 VVIP helicopters for INR 3,600 crore in 2010 came to light, involving top officials from the Indian Air Force, the Indian government, and the Congress Party.

Officials from AgustaWestland were also detained in Italy.

India had cancelled several contracts, including a contract for 12 VVIPS helicopters and heavyweight torpedoes for the Indian navy.

The Indian Navy decided to cancel the purchase of torpedoes for its new class of Scorpene submarines as a result of the Leonardo ban. The Indian Navy planned to buy 98 Black Shark torpedoes from a Leonardo subsidiary to equip the six Scorpene submarines with primary armament. In 2016, the Indian Navy cancelled the Black Shark torpedo contract and has yet to choose a new torpedo class for the Scorpene submarines. As a result, the submarines have to rely on old German SUT torpedoes.

According to reports, lifting the ban would give India leverage in preventing the company from supplying Pakistan with equipment.

Brief history of the case

In February 2010, India agreed to buy 12 AgustaWestland AW101 helicopters for the Indian Air Force’s Communication Squadron to transport the president, prime minister, and other VIPs. The contract was put on hold in February 2013 after allegations that a bribe of $60 million had been paid. The CEO of Finmeccanica, Giuseppe Orsi, was arrested by Italian authorities on February 12, 2013, and the following day, then-Indian Defence Minister A.K. Antony ordered an investigation into the contract.

(Image Courtesy – The Logical Indian)

The Indian helicopter bribery scandal by the Congress-led UPA is also known as the AgustaWestland VVIP chopper deal. In 2006 and 2007, money was paid to middlemen and Indian officials to purchase helicopters for high-ranking politicians in India, according to the government. According to the CBI, INR 2.5 billion was transferred through bank accounts in the United Kingdom and the United Arab Emirates.

It was discovered in early 2013 when an Indian national parliamentary investigation into allegations of bribery and corruption involving several senior officials and the helicopter manufacturer AgustaWestland over the purchase of a new fleet of helicopters began.

The scandal has been dubbed “the Chopper Scam” or “Choppergate” by the media and the general public. Several Indian Congress politicians and military officials have been accused of accepting bribes from AgustaWestland to win a contract worth INR 3.6 billion (US$48 million) to supply 12 AgustaWestland AW101 helicopters to the President of India and other important state officials. Italian prosecutors allege that Ahmed Patel, the political secretary to Congress President Sonia Gandhi, received kickbacks from the deal.

AgustaWestland chopper scam: Government must focus its energy on probe  rather than accusation

Then-Prime Minister Manmohan Singh, Ahmed Patel, Pranab Mukherjee, M. Veerappa Moily, Oscar Fernandes, M. K. Narayanan, and Vinay Singh are named in a note presented in an Italian court by middleman Christian Michel (who was extradited to India on 4 December 2018). The bribes to be paid are listed as “AF” €6 million, “BUR” €8.4 million, “Pol” €6 million, and “AP” €3 million on the note. The defendants were acquitted on all charges by the Third Court of Appeals of Milan on January 8, 2018. Abhay Tyagi was also accused of receiving kickbacks worth $69,00,000.

In January 2014, India cancelled the US$630 million deal. In June 2014 India recovered the entire sum which it had paid to the company.

The case continues to be investigated in India by the Indian government and the CBI.

AgustaWestland

AgustaWestland was an Anglo-Italian helicopter design and manufacturing company, which was a wholly-owned subsidiary of Finmeccanica (now known as Leonardo). It was formed in July 2000 as an Anglo-Italian multinational company, when Finmeccanica and GKN merged their respective helicopter subsidiaries (Agusta and Westland Helicopters) to form AgustaWestland, with each holding a 50% share. Finmeccanica acquired GKN’s stake in AgustaWestland in 2004.

In 2016, AgustaWestland was merged into Leonardo S.p.A. (formerly Finmeccanica), where it became the company’s helicopters division under the Leonardo Helicopters brand.

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