The current corruption scandal dates back to 2010 the year when the Indian Ministry of Defense and Finmeccanica, an Italian holding company, signed a contract to supply AgustaWestland AW-12 helicopters in 101 helicopters in the option for transporting important people. At that time, the Italian company experienced difficult times and fought off various claims, but still managed to promote its products. Finmeccanica was to receive 556 million euros for the execution of the order. Almost three years after signing the contract, in February 2013, the Italian Central Bureau of Investigation published preliminary information, according to which the transaction took place only through a bribe. There is unconfirmed information that even before the announcement of competitive requirements, some Italian merchants and officials held secret negotiations with the Indian military. Allegedly, after that, some items of the technical requirements for the new technology were changed so that the AW-101 helicopters corresponded to them and could take part in the tender.
According to investigators, Indian high-ranking officials for the appropriate choice of equipment received about 50-51 million euros. Just a few days after the publication of these data, investigators from the Central Bureau of Investigation obtained the arrest of the current Finmeccanica CEO Giuseppe Orsi. At the time of signing the contract for the supply of helicopters, he already held one of the key positions in his company. Also placed under house arrest were Bruno Spagnolini’s chief executive officer. Now there is a preliminary investigation of the case. In addition to the arrests of the first persons, Finmeccanica received additional problems in the form of falling stocks. In just a couple of days after the arrest of Orsi and Spagnolini, the paper of the company fell by more than ten percent, after which the Italian National Commission on Companies and Exchanges was forced for some time to prohibit the rapid sale of its shares.
Shortly after the news came from Italy, Indian politicians responded to the situation. Indian MPs from the opposition Bharatiya Janat Party demand the Italian Bureau of Investigation to verify the activities of several leaders of the ruling Indian National Congress (INC) party. According to the opposition, it was the leadership of the ruling party that received money from Italian merchants and then pressed on the Ministry of Defense. It is noteworthy that the preliminary internal investigation of the Ministry of Defense of India has not yielded any results regarding the involvement of the INC leadership in the scandal. Nevertheless, according to a number of analysts, subsequent events around the scandalous contract may lead to the most extensive consequences, including a change of power.
It should be noted, against the background of the main corruption scandal, other unpleasant situations of no smaller scale may appear. For example, due to the fact that the Italian investigation is at a very early stage, the Central Bureau of Investigation is not yet able to provide complete information to Indian colleagues. Firstly, it does not allow Indian law enforcement agencies to take timely measures and prevent the guilty from destroying evidence or escape, and secondly, because of the lack of clear information about the situation, the Defense Ministry does not know what to do next with the contract. If the only motivation for choosing the Italian helicopters was a bribe, then such a choice cannot be considered objective, fair and appropriate in terms of economy or operation. Therefore, if the investigation reveals the facts of bribery, the contract is terminated. To date, AgustaWestland, a structural unit of the Finmeccanica holding, managed to fulfill a quarter of the order and deliver three new AW-101 helicopters in VIP configuration to India.
If the contract is terminated, the Indian military will face a serious question. Probably the three helicopters received will remain in India, and their cost will be taken into account when returning the money paid. However, the Indian Ministry of Defense wants to get a dozen helicopters, not three. Accordingly, another question arises: how to complete the fleet of helicopters for the transportation of command? It is clear that the beginning of the new tender is one of the worst options. On the announcement of the competition, sending invitations, making a list of participants, etc. bureaucratic moments will take too much time. As a result, already now the Indian military is forced to look for a faster and easier way to eliminate the need for VIP-transport.
One of the most likely and convenient options for this is the introduction of additional conditions in the existing agreements between India and Russia. Over the next few years, our country will supply the Indian Air Force with several dozen medium multipurpose Mi-17 helicopters of various modifications. In fact, nothing prevents further agree on the conversion of a certain number of these machines in accordance with the new requirements, or carry out such revision on their own. In financial terms, such a solution to the problem probably will not be significantly different from the existing dubious contract. In helicopters for the transportation of command, a large part of the final cost relates to equipment, such as communication systems, special equipment or the corresponding "interior". Therefore, the creation of a special board on the basis of a slightly cheaper Mi-17 helicopter may ultimately prove to be cheaper than a similar action with the Italian AW-101. In addition, it is necessary to take into account the corruption component. It is unlikely that the Italian merchants - if they really gave bribes - would give, what is called, on kickbacks, about eight to nine percent of the total amount of the contract.
Currently, Italian investigators are completing a preliminary investigation. About ten high-ranking Italian officials and businessmen are already under suspicion. The Indian side is also ready to begin its investigation, but so far it is awaiting the results of the work of the Italian Central Bureau of Investigation. The first results of the investigation can be published as soon as possible and they are likely to be very interesting. It can be assumed that according to the results of the preliminary investigation, the list of suspects will be expanded again, and India will be able to join the investigation.
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