NEW DELHI — A former Indian Air Force chief, Air Chief Marshal Shashindra Pal Tyagi, was arrested on Friday by the Central Bureau of Investigation for alleged corruption in the purchase of 12 AW 101 VVIP helicopters from AgustaWestland, a subsidiary of Italy's Leonardo-Finmeccanica.

Along with Tyagi, Delhi based lawyer Gautam Khaitan and his cousin Sanjeev Tyagi also were arrested, "on the allegations accepting illegal gratification for exercising influence through corrupt and/or illegal means," according to the government.

In January 2014, MoD officials canceled the €546 million helicopter contract inked in 2010 with the Anglo-Italian company on charges of corruption, referring the case to the CBI.

India's Defense Minister Manohar Parrikar, during a debate in Parliament in April this year, said the request for proposals for the deal had been diverted to favor AgustaWestland.

"The technical specifications were changed - especially the altitude of the helicopters from 6000 meters to 4500 meters, and raising the cockpit height of the desired helicopters to 1.8 meters was only meant to favour AW 101 helicopter of AgustaWestland," Parrikar said then.

In April of this year, a civil court in Milan had indicted some senior officials of Leonardo-Finmeccanica, convicting them in the helicopter


Without mentioning names, Parrikar told parliament on April 4 that an "invisible" hand had been behind the VVIP helicopter scam, thereby suggesting that top leadership of the opposition Congress Party (in power in 2010) could be involved.

A MoD official said the CBI continues investigation in the VVIP helicopter case, adding that there is no proposal yet before the government to blacklist either AgustaWestland or the mother company Leonardo-Finmeccanica.

Between 2005 and 2012, defense companies, including Singapore Technologies Kinetics, Israel Military Industries (IMI), Rheinmetall Air Defence AG of Switzerland and Corporation Defence of Russia were banned from doing defense business in India for the next 10 years on charges of alleged corruption. In 2005, Denel of South Africa was blacklisted.

Last month MoD has issued fresh guidelines on blacklisting and has reduced the maximum period of banning from 10 to five years.