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India to cancel VVIP chopper deal with Finmeccanica?

India Infoline News Service | Mumbai |

According to the Defence ministry statement, action has been initiated to cancel Finmeccanica contract

Defence Ministry issued a show cause notice to Defence manufacturer Finmeccanica and gave a time period of seven days to the Italian company to explain the corruption charges. The notice seeks to cancel the $750 mn order. "(Defence Ministry) today issued a formal show cause notice to AgustaWestland of UK seeking cancellation of contract and taking other action as per the terms of the contract and the integrity pact," the ministry said in a statement.

Earlier, Defence Minister, AK Anthony warned on Wednesday that India would blacklist the Italy based defence contractor Finmeccanica SpA and cancel the deal to buy 12 helicopters from the group if corruption charges are proven against the company. Anthony declared that those involved would pay for the lapses and nobody will be spared if the recently ordered Central Bureau of Investigation (CBI) investigation into the matter finds someone guilty. Antony ordered a CBI investigation into the 2010 sale of VVIP chopper deal on Tuesday.

Italian police arrested the Finmeccanica CEO, Giuseppe Orsi as part of bribery charges. Orsi was under the lens since spring of 2011 since he left the charge of Augusta Westland, the chopper arm of Finmeccanica to become the CEO of the parent company. Investigation into whether AugustaWestland paid bribes to secure $751mn deal to supply 12 helicopters to the Indian government is underway. Anthony said that he had no information on former Air Chief SP Tyagi’s role in the deal, who also came under the scanner for same, said the reports. He also said that under the integrity pact of Defence Procurement Procedure (DPP), which governs all defence deals by foreign vendors, Indian government could get the entire money paid to the said vendor. India entered into a deal with AugustaWestland for delivery of 12 three-engine AW-101 helicopters for Indian Air Force’s communication squadron which protects VVIPs, in 2010. The total scam, which first came into light after the Italian police arrested the CEO, is pegged at 3600 crore. Reports suggest that delivery of the remaining 9 choppers is to be put on hold



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