Defence Ministry to issue showcause notice to AgustaWestland for cancelling deal

NEW DELHI: Defence Ministry is planning to issue a show cause notice soon to Anglo-Italian firm AgustaWestland for cancellation of its over Rs 3,600 crore helicopter deal in view of bribery charges against it.

The Ministry is going to take the step as it has obtained some "important evidence" during investigations going on in the case since February, highly placed government sources told PTI here.

The government has already frozen the contract for supply of 12 AW-101 VVIP choppers to the IAF after allegations that Rs 360 crore were paid as bribe in which two top officials of the company were accused.

IAF has already received three helicopters and delivery of the rest has been put on hold.

The company last week said it has invoked arbitration proceedings against the Defence Ministry for "unilaterally" freezing the deal.

The sources claimed that the government had been preparing to issue the notice for cancellation much before AgustaWestland took the step.

The Defence Ministry had earlier issued a show cause notice to AgustaWestland on February 15 asking it to explain within seven days the bribery allegations against it after the alleged scam was exposed in Italy.

In the notice, the company was asked why the Rs 3,600 crore deal of 2010 should not be scrapped.

In its reply, AgustaWestland had denied the allegations. Former IAF chief S P Tyagi is among those under cloud in connection with the kickback charges.

The CAG also recently highlighted loopholes in the deal. Soon after the arrest of the firm's former CEO, Guiseppe Orsi, in Italy in connection with the case, Defence Minister A K Antony had suspended the payments to be made to it along with the delivery it was due to make to IAF of the remaining nine choppers.