In 145 pages, a three judge panel based out of Busto Arsizio, has busted the so-called scam in India’s procurement of 12 AW101 helicopters for VVIP travel. This detailed judgement which has been accessed for the first time, by INDIA TODAY, not only acquits the main accused, top officials of the manufacturing firm AgustaWestland and Finmeccanica but also former IAF chief Air Chief Marshal SP Tyagi. The only case, as argued by the prosecution, which the judges were convinced about concerned tax evasion.
The trial which was wrapped up in 16 months, between June 2013 and October 2014, has squarely ended in an embarrassment for the Italian prosecutors as well as the Indian Ministry of Defence as it was based on the actions of the former that the MoD decided to scrap the entire contract. This decision was taken despite the Central Bureau of Investigation which was tasked for the job not even filing a chargesheet. Further, the actions of the then Defence Minister AK Antony ensured that the Indian Air Force (IAF), whose responsibility it is to ensure safe and secure VVIP travel, had to divert its operational Mi17V5 helicopters for the task. In an email response, the IAF admitted that it is diverting and modifying its helicopters for the VVIP travel role. When asked, Antony offered no comment and only said, “I will have to study the facts.”
Meanwhile, defence minister Manohar Parrikar has said that till the contract was called off, India had paid to AgustaWestland a total of Rs 1586 cr. It was also revealed that India had recovered the sum paid to the firm.
Excerpts from the judgement:
- Prosecution could not establish that there existed a corruptive agreement between ACM Tyagi and the accused
- Individual letters brought before us by the prosecution do no establish corruption by ACM Tyagi
- Prosecution failed to construct, in fact and in law, a case of international corruption
- Documents with notings like ‘AP’, ‘FM’, ‘POL’ can not be read as indicative of accusation of corruption
- Proven that close business links existed between Carlo Gerosa and ACM Tyagi’s brother Juli Tyagi in different sectors like oil, railways
- Haschke Guido Ralph did manage to make Finmeccanica General Manager Zappa meet ACM Tyagi when the latter was IAF chief
- ORSI GUISEPPE (Arrested on March 12, 2013 when he was the Chairman and Managing Director of Finmeccanica)
- SPAGNOLINI BRUNO (Arrested on March 12, 2013 when he was the CEO of AgustaWestland)
Two main accused joined hands with other collaborators including ex-IAF boss ACM SP Tyagi to tweak tender conditions. Prosecution said through the Air Chief Marshal the ‘service ceiling’ (the maximum altitude at which an aircraft can fly) was lowered from 18000 feet to 15000 feet SO THAT AGUSTAWESTLAND could participate. In addition, a phenomenon called as DRIFT DOWN ALTITUDE was introduced (if there is an engine failure, the minimum rate of descent i.e it will decelerate the downfall to manageable levels in common man’s parlance).
In this fashion, the prosecution said, AgustaWestland won the contract.
Prosecution alleged that GUISEPPE & SPAGNOLINI to EVADE TAXES joined hands with
- FACONDO ALESSIO, MD of AGUSTAWESTLAND SPA
- BOTTARINI GIANFRANCO, Director of IDS
To generate FALSI RECEIPTS OF EUR 21,425,647 FROM 2007 TO 2011 as payment to IDS (which the prosecution felt was an alibi)
- GROUND A – INTERNATIONAL CORRUPTION DID NOT EXIST
- GROUND B – TAX EVASION LIMITED ONLY TO THE PERIOD MAYS 2009 TO JUNE 2010
ACM Tyagi: ‘UPA knew all was in order, yet panicked’
In an interview to INDIA TODAY’s Jugal R Purohit, former Indian Air Force (IAF) chief Air Chief Marshal Shashi Tyagi reacts to the judgement delivered by the Italian court.
Q. What are your first thoughts on this judgment from the Italian court?
A. We always and all along knew that our procedures were correct. So it does not surprise me. The government of the day went to the floor of the house to say that there were no violations yet their actions did not match with their words. Why should we have waited for an Italian court to tell us what we knew?
Q. The UPA could have handled it better. Would you agree?
A. Sorry to say but the then government lacked conviction. We said we knew all was fine and yet believed an Italian crook and began inquiring and hounding our own men, questioning our own procedures. The government simply panicked. As elected representatives, you need to have a resolve. Just because opposition and media make noise you will panic! That is not the way to go about it in mature democracies. Unique to this case was the fact that two Prime Ministers’ Offices (PMOs), two National Security Advisers (NSAs), Defence Ministers and several air chiefs were involved and all probity was maintained. But still.
Q. What, in your opinion, could have been done?
A. Since there were allegations, an inquiry was definitely required. But there are ways to do it. For example, a discrete one would have established. I know for a fact that such an internal exercise was done by the MoD and the IAF HQs. Yet we acted in a totally opposite fashion. This was to maintain a clean image of sorts perhaps. Do we realise that the whole world is watching us? For a country like ours, it does not augur well to behave in the manner we did.
Q. How was the journey for you since the day your name was mentioned in the scam?
A. I am a victim of circumstances. After all there is an Italian crook who claimed somewhere that he got some work done from me. So I am facing the music. Even today, notwithstanding what has happened in Italy, in our country, I am an accused. The CBI is still investigating. My biggest worry is about our men at the lowest level. Imagine the kind of impact such allegations make on them. They will start thinking whether or not they can believe their leadership and in the armed forces, this is a very serious matter.
Q. Do we or do we not require a VVIP fleet?
A. We absolutely do. Where is the doubt? India is growing in stature, our interests are growing and if you ask me, as a citizen would I not want to see my President, Vice President, Prime Minister and visiting dignitaries travel in a safe and secure plane, I will say yes. And we can afford it so why not!
TIMELINE OF THE VVIP SAGA
- 1999: IAF raised the issue of purchase of VVIP choppers since existing Mi8 were to exhaust their service limits
- 2003: Following a global hunt initiated in the previous year, service parameters for purchase of choppers were changed
- 2006: Fresh proposals from global manufacturers were sought
- February 2010: Ministry of Defence signed contract with AgustaWestland for supply of 12 VVIP helicopters for EURO 556.262 million
- February 2012: First reports began circulating, speaking about a scam in the procurement
- February 2013: MoD asked the CBI to investigate the deal following the arrest in Italy of top officials from AgustaWestland and Finmeccanica
- January 2014: MoD terminates the contract for the choppers
AgustaWestland reacts to INDIA TODAY report
“Following the suspension of the contract to supply AW101 VVIP helicopters to India – a sanction not provided for the under contract – a request was made to India’s Ministry of Defence by AgustaWestland in April 2013 invoking the contractual provision for bilateral discussions. Since then there have been a series of further requests for discussions. Regrettably, to date, there has been no response from India’s MoD.
The company’s earnest desire is to have a dialogue with the Indian authorities. AgustaWestland remains totally committed to working with the Government of India to resolve the issues confronting us and to allow the Indian armed forces to receive the equipment they need. However, we do not see how we can achieve this if a dialogue is not established. The ongoing need to resolve this issue has left AgustaWestland with no other option but to invoke arbitration through Counsel; the next step prescribed by the contract. This is not a step we take lightly.
While the arbitration proceedings themselves are confidential, the issues in question relate to the unilateral suspension of the contract. Neither the contract nor the associated Integrity Pact confers such rights on the Indian MoD.
AgustaWestland is justly proud to have served the Government of India for more than 40 years. We want our relationship with India to continue and flourish and consequently we remain deeply concerned at the current situation.”