India initiates action to scrap VVIP chopper deal

The Defence Ministry on Friday issued a show cause notice to AgustaWestland, asking it to explain within seven days the bribery allegations, Ministry spokesman Sitanshu Kar said.

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

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"The Defence Ministry issued a formal show cause notice to AgustaWestland seeking cancellation of the contract and taking other actions as per terms of the contract," the spokesman said.

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The notice comes a day after the ministry warned of legal action, including invoking integrity pact which provides for cancellation of the contract if bribes are paid and recovery of the money already paid.

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India has already received three of the 12 helicopters and paid upto 30 percent of the amount.

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After the arrest of Finmeccanica CEO Giuseppe Orsi in Milan on Tuesday in connection with the bribery charges, India had put on hold the receipt of the remaining helicopters as well as rest of the payment.

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Former Air Chief S P Tyagi has been accused of being a beneficiary of alleged kickbacks said to have been received by his three cousins but he has denied any wrongdoing.

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The government on Thursday formally asked Finmeccanica, the parent company of AgustaWestland, to state whether any money was illegally paid to any Indian entity or individual "which would be violative of the Integrity Pact or any other terms and conditions of the contract".

Source: http://www.ddinews.gov.in/Homepage/Homepage+-+Headlines/blacklist.htm

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