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Augusta Westland Scam (Analysed and Compiled from various sources, Relevant for Mains GS Paper II, Corruption in defence acquisition; GS Paper III, Internal Security)

What was the deal..?

In February 2010, then Central Govt. led by Congress party signed a contract to purchase 12 Augusta Westland AW101 helicopters for the Indian Air Force for Rs 3,600-crore, to carry the president, PM and other VVIPs. It is alleged that AugustaWestland was finalised because it offered bribe to Indian officials.

 

Start of Controversy…

Controversy over the contract came to light on 12 February 2013, with the arrest of Giuseppe Orsi, the CEO of Finmeccanica, AgustaWestland's parent company by Italian authorities. 

 

Deal on hold & probe in pipeline..

Subsequently the Indian authorities decided to put on hold the deal & to probe the deal, just to find out whether there is some kind of corruption involved or not?

The following day Indian Defence Minister ordered a probe into the contract. 

 

Pressure on Congress Party & the Govt of India…

As Congress Party was under tremendous pressure (before 2014), courtesy to numerous Scams & Scandals took place during their regime.

There was complete disorder & chaos in the Parliament & National Media was showing Congress in the bad lights.

Thus, pressure was building on Congress to act & to take some substantial steps.

 

Cancellation of Deal..

Resulting in Cancellation of Deal.  

In 2014, the Congress-led UPA government cancelled the VVIP chopper deal with AgustaWestland on grounds that the integrity pact was violated. 

 

Recovery of Money.

Indian government has recovered a total amount of ₹2068 crore and has recovered the entire amount of around ₹1620 (45% of total contract value ₹3600 crore) it had paid to AgustaWestland. 

Investigation.

On 25 February 2013, CBI registered a Preliminary Enquiry (PE) against 11 persons, including the former IAF Chief, Air Chief Marshal S.P. Tyagi and his cousins, besides four companies. 

After carrying out the preliminary enquiry, the CBI found sufficient evidence and registered an FIR on 13 March.

Enforcement Directorate (ED) is investigating money laundering allegations.

CBI & ED ares still probing the case; till now many evidences has been found against many people.

 

Role of Ex-Indian Ari Force Chief (SP Tayagi).

IAF wanted to buy helicopters for a high altitude flying helicopter. IAF wanted Helicopters which can fly up to 6000 feet & above.

Agusta Westland's A-101 failed to make the list after flight evaluation–because it could not fly at 6,000 feet and above. It could fly lower to around 3,000 feet of the requirement.

After Tyagi took over, the Air Force conceded to reduce the height requirement, allowing AgustaWestland to re-enter the bidding process, & thus making them strong contenders for the bid. 

Convictions by Italian Court.

Italian court covicted the former chief executive Giuseppe Orsi for corruption  on 7th April,2016 and sentenced to four and a half years in prison.

Former head of AgustaWestland, Bruno Spagnolini, was also sentenced to four years in jail.

The court also ordered the two executives to pay 7.5 million euros ($8.5 million), a sum related to the amounts deemed to have been allegedly paid in bribes. 



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