Agusta CEO was aware of norms before tender was issued

NEW DELHI: More than a year before the UPA-I government issued tenders for new VVIP choppers in September 2006, the CEO of AgustaWestland informed shareholders that the eligibility norms would be tweaked to allow the company to bid for the contract.

Giuseppe Orsi shared this information at a meeting on April 27, 2005, while then Indian Air Force chief SP Tyagi signed papers on March 14, 2005, approving the lowering of the operating altitude requirement for the helicopters meant to ferry the president, the prime minister and other dignitaries.

AgustaWestland’s half-yearly report prepared in March 2005, documents recovered from the helicopter manufacturer and the testimonies of two officials of the company show that Orsi was well aware of the key developments with regard to the chopper contract, said people with direct knowledge of the matter. The papers Tyagi signed had been marked “confidential” and could not have been made known to outsiders, the people said. Additionally, about a month before the operating altitude requirement was lowered, Tyagi had a meeting with officials of Finmeccanica, the then parent company of AgustaWestland, according to Italian police investigating whether the helicopter manufacturer paid bribes to win the Rs 3,600 crore contract.


The Italian prosecution alleged that the meeting in February 2005 was arranged by alleged middleman Guido Ralph Haschke. However, Finmeccanica claimed the meeting took place in conjunction with an official visit by the Italian head of state to the IAF headquarters.

Giorgi Zappa, the then general manager of AgustaWestland, confirmed in his testimony that the meeting took place. Claiming that the meeting was official, Zappa said, “Then, as is often the case in these missions, one takes advantage of the opportunity to meet potential or likely customers.” His deposition, accessed by ET, reads: “In all missions, in practice there is a document prepared by the office that explains the type of market, its developments, what type of sales were made by Finmeccanica, what kind of potential tenders could be expected in relation to Finmeccanica products.” Stating that the meeting lasted for almost half an hour, Zappa denied allegations of offering a “bribery agreement” with Tyagi to accommodate AgustaWestland helicopters.

Zappa added that the operating altitude issue was discussed with Tyagi. “We talked about operating altitudes, I was surprised by the simple reason that in practice the EH-101 (Agusta’s helicopter) was a helicopter that had been sold almost everywhere in the world and was also competing to become the American presidential helicopter... It seemed strange that this requirement would exclude a helicopter of the same type,” he had said.

When confronted on the altitude issue by the Italian prosecutor who pointed out the Himalayas in India, Zappa responded: “… Now I don’t know if the requirement was to go to the Himalayas.” Another witness, Alberto De Benedictis, who was CEO of Finmeccanica UK, said Orsi had provided “vague indications” regarding the source of his information about the Indian government’s likely decision to issue a tender enabling Agusta-Westland to bid for the contract.

An Italian court acquitted Orsi of corruption charges in January on account of lack of evidence. Tyagi has denied all allegations of corruption and involvement against him.