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Italy: Finmeccanica In The Dock

Published 02/19/2013, 12:58 AM
Updated 07/09/2023, 06:31 AM
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First, we are not alleging anything untoward has taken place; but in our defense, it couldn’t happen to two countries more stereotypically labeled as engaging in corrupt practices.

According to a quote in several FT articles by India's Defense Minister, Mr. A.K. Antony, India was ready to cancel a $750 million contract to buy AW101 helicopters from Italy’s Finmeccanica (FNC.MI), which it did as investigators concluded that the deal was corrupt.

Giuseppe Orsi, who’s already been replaced as chairman and chief executive atFinmeccanica , and Mr. Bruno Spagnoli, the head of the AgustaWestland helicopter unit, have both been placed under house arrest as part of a domestic investigation into allegations of bribing intermediaries in the sale of 12 luxury helicopters to ferry Indian VIPs around the country.

Some say the timing is political, with only two weeks to the Italian elections and efforts to revive Finmeccanica, which is said to be identified with Mario Monti’s technocrat government.

Finmeccanica is Italy’s second-largest industrial group after Fiat, and the allegations follow corruption allegations that surfaced at Monte dei Paschi di Siena, the country’s third-largest bank by assets, as well as state-controlled energy group Eni and its Saipem subsidiary.

In India, Shashi Tyagi, a former Indian air force chief, is under suspicion after he was named in the preliminary report of the Italian investigation. He denies that he had changed the terms of India’s helicopter tender to favor AgustaWestland.

The maximum altitude requirement for the helicopters was lowered in 2003 from 18,000 to 15,000 feet, because only one model of helicopter originally qualified that was unsuitable, Mr. Tyagi is quoted as saying.

by Stuart Burns

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