Business
5:37 am
Tue February 19, 2013

India, Italy Accused Of Kickbacks In Defense Deal

Originally published on Tue February 19, 2013 11:33 am

Transcript

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NPR's business news starts with begins with a corruption case in India.

India has dispatched investigators to Italy to examine allegations of kickbacks, kickbacks involving a $700 million defense deal. The case involves the sale of a dozen helicopters to India from one of Italy's largest industrial groups.

From New Delhi, NPR's Julie McCarthy has more on a case that's rattling the Indian government.

JULIE MCCARTHY, BYLINE: With a robust self-defense system, the AW 101 helicopters are designed to protect VIP's on board. India ordered 12 of the choppers to ferry, among others, its prime minister and president.

Finmeccanica's British subsidiary, AgustaWestland, sold the helicopters to India. But the deal is now the subject of a criminal investigation. Italian prosecutors have accused the former CEO of Finmeccanica of arranging at least $65 million in alleged bribes to swing the helicopter deal with India.

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Italian investigators are reportedly focusing on a shadowy network of fixers and middlemen. According to an Italian investigation report published in the Indian Express, Finmeccanica routed money to players in India, Italy and Switzerland through dubious consultancies and invoices disguised as engineering contracts.

MCCARTHY: No Indian has been formally accused, but a former Indian air chief and his relatives were reportedly among those named as receiving bribes. Three of the 12 helicopters have been delivered. And in an effort to control damage, India has put on hold any further payments.

India's defense minister A.K. Antony has reportedly begun the process of terminating the contract and has ordered an investigation into all aspects of the helicopter deal that was inked in 2010. India's Central Bureau of Investigation has asked the Defense Ministry for files on the sale.

The opposition meanwhile, is preparing to grill the government over the aircraft deal in a crucial budget session in parliament this week. The bribery allegations unfold as Britain's Prime Minister David Cameron is in India holding talks today with his counterpart Manmohan Singh. The brewing scandal has cast a shadow on the trip billed as the largest trade mission ever led by a British prime minister.

India is expected to press Cameron for assistance in learning more about the accusations. Italian authorities have rejected India's requests for evidence claiming the privilege of secrecy.

Julie McCarthy NPR News New Delhi. Transcript provided by NPR, Copyright NPR.