Govt initiates process to scrap chopper deal, sends Italian firm showcause notice

Even as India made a fresh request to Italy for information on alleged kickbacks in the supply of 12 AgustaWestland's VVIP helicopters, the defence ministry on Friday issued a showcause notice to the Italian firm demanding a reply in seven days and has initiated the process to scrap the deal.

"A new request has been sent out to Rome seeking more details about the VVIP helicopters," sources told FE. Also, the MoD has issued a formal showcause notice to the company seeking cancellation of contract and taking other actions as per the terms of the contract and the integrity pact.

The ministry had already put on hold further payments to the company on Wednesday. "With today's notice, the operation of the contract has been put on hold. The company has been asked to reply to the notice in seven days," ministry said in a statement.

On Thursday, India warned Italian firm Finmeccanica of legal action, including blacklisting, over corruption allegations in the VVIP chopper deal and asked them whether any slush money had been paid to fix the deal, which has led to a political uproar.

The MoD issued a detailed statement on the sequence of the $750-million deal for 12 AgustaWestland helicopters by the Italian firm's subsidiary, two days after a Central Bureau of Investigation (CBI) probe was ordered into the bribery charges.

The statement noted that the mandatory technical requirements of the helicopter were changed in the tender during the Vajpayee government in 2003, with the then national security adviser Brajesh Mishra playing a key role.

The MoD has asked the chief of AgustaWestland to "categorically state the clear position in view of the current developments indicating specifically if any financial transaction has taken place with any Indian individual/entity which would be violative of the integrity pact or any other terms and conditions of the contract".

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