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AgustaWestland Fights to Keep Graft-Hit Indian Helo Deal

Nov. 20, 2013 - 11:35AM   |  
By AGENCE FRANCE-PRESSE   |   Comments
AgustaWestland's AW101 helicopter
AgustaWestland's AW101 helicopter (Wikipedia)
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NEW DELHI — British helicopter maker AgustaWestland will Wednesday fight its case at a meeting with Indian defense officials following a move to cancel a 556-million-euro ($753 million) deal over corruption charges.

India suspended the contract to supply 12 luxury VIP choppers earlier this year after Italian investigators began looking into allegations that AgustaWestland paid bribes to win the contract.

The meeting comes amid reports that the Indian government has already decided to cancel the deal, citing violations of a so-called "integrity pact" that must be signed by defense suppliers.

AgustaWestland's parent company, Italian group Finmeccanica, said Wednesday it had received "no such communication" from India's ministry of defense and dismissed "all allegations of violation of the pre-contract integrity pact".

"Finmeccanica is confident in India's reputation for fair and transparent proceedings and respect for the rule of law, for which India has an established reputation," the company said in a statement.

"AgustaWestland will deliver the formal written response to the exceptions raised by India's MOD (Ministry of Defence)" at Wednesday's meeting, the statement added.

A highly placed source in the ministry said "any decision on the deal would be taken only after hearing out AgustaWestland's case."

Last month, India moved to cancel the contract by issuing a "final show cause notice" to the company, asking why action should not be taken against it for violating the terms of the integrity pact.

India signed the deal in 2010 for 12 helicopters for use by VIPs, with AgustaWestland beating competition from American, Russian and European rivals.

Any cancellation of the deal could see the contract re-tendered, with hefty losses for AgustaWestland as a result.

India has already received three of the helicopters, but Defence Minister A.K. Antony halted deliveries of the remaining nine in February.

India's auditor general said in an August report the defense 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 that Finmeccanica had broken the law by paying bribes to foreign officials.

The Italian boss of Finmeccanica was arrested in February over the case and put on trial touching off a firestorm in India, where the Congress-led government has been battling a string of graft scandals ahead of elections next year.

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