The chief executive officers of AgustaWestland and parent company Finmeccanica have been arrested as part of an investigation into alleged international corruption.
On Tuesday, Italian police arrested Finmeccanica CEO Guiseppe Orsi in connection with suspected bribes paid to secure the sale of 12 AgustaWestland AW101 helicopters to the Indian government in 2010. Authorities ordered searches of Orsis home, and of AgustaWestland offices, and placed current AgustaWestland CEO Bruno Spagnolini under house arrest.
In a statement, Finmeccanica referred to the arrests as precautionary measures and said, 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.
Orsi was informed last year that he was under suspicion of money laundering and bribery in connection with the 2010 sale to the Indian Air Force, which occurred during his tenure as CEO of AgustaWestland. The contract, valued at around 560 million euros ($752 million US in todays dollars), included a dozen AW101 helicopters for government transport duties, plus a five-year logistic support service and initial aircrew and technician training.
According to Reuters, authorities believe that Indian officials were paid kickbacks worth 40 million rupees ($742,000) to facilitate the deal. Additional money may have been paid to intermediaries in the process: the Financial Times reported that, last April, authorities searched the offices of Guido Ralph Haschke, a Swiss businessman reported to be under suspicion of receiving 51 million euros ($68.6 million) for his role in the deal. Orsi, however, has repeatedly denied all allegations of wrongdoing.
Meanwhile, the Indian government said on Tuesday that it will pursue its own investigation into the allegations. A source in the Indian defense ministry told Reuters, We will go to the root of the problem. If charges of bribery are proved, suitable action will be taken, potentially including blacklisting or fines. Exclusion from Indias defense sector would be a blow for AgustaWestland: at the time of the 2010 sale to the Indian Air Force, Orsi said that the company had identified India as one of the pillars of our expansion strategy, from both the market and the industrial points of view. Most recently, AgustaWestland was at Aero India 2013 to market a naval variant of the NH90 to the Indian Navy, in addition to promoting other models for Indias military and commercial sectors.
This is not the only allegation of corruption to have plagued AgustaWestland in recent years. The company was accused of paying up to $4.7 million in kickbacks, disguised as marketing contracts, to former Ornge CEO Chris Mazza in connection with the $144 million sale of 12 new AW139 helicopters for the Ontario air ambulance service. AgustaWestland aggressively denied those allegations, issuing a statement last year that said, It is our belief that the propriety of our actions, soundness of the selection of the AW139 and its fitness for the mission it performs on behalf of the citizens of Ontario cannot be questioned.
