The Indian defence ministry Tuesday ordered a CBI probe into the $750 million deal for 12 VVIP AugustaWestland helicopters following arrest of its Italian manufacturer Finmeccanica's chief on graft charges in the contract.
This is not the first time that the allegations have surfaced and ironically enough, three of the helicopters have already been delivered to the Indian Air Force (IAF), the first of them in December 2010.
Some 30 percent of the contracted amount has already been paid and the remaining would have to paid as and when the remaining nine machines are delivered, as of now, no wrongdoing has been proved, said informed sources.
In fact, a scale model of the helicopter had formed part of the IAF tableaux during the Jan 26 Republic Day parade.
Explaining the rationale for the CBI probe, a defence ministry statement said: "Press reports have appeared from time to time on the subject of Italian prosecutors having initiated a probe into the alleged unethical dealings of M/s. Finmeccanica, Italy. The probe had been widened to include the Indian contract signed with M/s. Augusta Westland.
"In view of the media reports" the defence ministry, through the external affairs ministry, "had sought information from the governments of Italy and UK. No specific inputs were, however, received substantiating the allegations".
"In a recent report, appearing in certain sections of the media, it has been reported that the chairman of M/s. Finmeccanica has been arrested in connection with the investigation into the case of the sale of helicopters to India.
"The contract signed with M/s. AugustaWestland includes specific contractual provisions against bribery and the use of undue influence as well as an Integrity Pact," the ministry statement said.
Since no specific input has been received so far from the two governments, MoD (ministry of defence) has decided to refer the case to CBI for inquiry," the statement added.
On its part, Finmeccanica issued a terse release from Rome on the issue.
"With reference to the precautionary measures issued today towards the Chairman and CEO of Finmeccanica and the CEO of the controlled Company AgustaWestland, Finmeccanica confirms that the operating activities and ongoing projects of the Company will continue as usual.
"In addition, Finmeccanica expresses support for its Chairman and CEO, with the hope that clarity is established quickly, whilst reaffirming its confidence in the Judges," the statement said.
The contract for the helicopters had been signed in February 2010.
The IAF has sought the AugustaWestland choppers as a replacement for its Mi-17 cargo helicopters that have been modified for VVIP deployment. The Comptroller and Auditor General has adversely commented this, saying it was a waste of resources.