Money came through bogus engineering contracts, says Italian probe

AgustaWestland
The Italian investigative report into the Rs 3,546 crore VVIP chopper scandal claims that middlemen were paid at least Euro 400,000 upfront by Finmecannica for bribing officials in India and that the rest of the kickbacks came thorough inflated bills and invoices that were in the guise of engineering contracts.

In the 64-page report that details the manner in which money was routed to India for distrubution to influence the deal, there is a mention that while Euro 100,000 was paid in cash by Switzerland based middleman Guido Hascke to the New Delhi based Tyagi brothers, the rest came thorugh an engineering contract with IDS, a Tunisia based engineering consultancy.

VVIP chopper deal: See enlarged document

The report says that Finmecannica CEO Giuseppe Orsi, who is currently under arrest, agreed first for a 5 percent contract with the middlemen to swing the contract.

''The amounts agreed between Agusta Westland representatives, Giuseppe Orsi and SPAGNOLINI Bruno, with the mediators HASCHKE Guido Ralph, GEROSA Carlo and also CHRISTIAN Mitchell were also inclusive of bribes to be paid to Indian public officials to perform deeds which were against their office duties and in particular to manipulate the tender regarding the acquisition of the above mentioned helicopters," the report specifically states.

Rough transcript of cover documents

ORSI Giuseppe, SPAGNOLINI Bruno, HASCHKE Guido, GEROSA Carlo

aiming at embezzling funds in international economic operations.

Their positions:

ORSI Giuseppe, CEO and president of Finmeccanica from 04.05.2011, previously CEO of AgustaWestland Holdings N.V. from 2005 till May 2011, and ?

SPAGNOLINI Bruno, CEO from May 2011 of AgustaWestland Holdings N.V. based in Holland and already CEO of AgustaWestland spa from 23.12.2004 till 13.06.2011

HASCHKE Guido Ralph, chief and partner of GADIT S.A. of Lugano and GORDIAN SERVICES S.A.R.L. based in Tunis

GEROSA Carlo, Haschke's partner in the above companies

MICHEL Christian, owner of Global Service Trade Commerce based in London and of Global Service FZE based in Dubai, consultant for Agusta Westland Spa

They promised and managed to pay, through brothers Juli TYAGI, Docsa TYAGI and Sandeep TYAGI, a certain amount of money, not yet quantified, to Marshall TYAGI Sashi, Chief of Staff in the Indian Air Force from 2004 to 2007 a public officer or anyway in charge of functions and activities equivalent to those of a public officer in India - to perform and to have performed a deed against his office duties.

In particular:

HASCHKE, already consultant for other Finmeccanica companies, came to know from his partner Gerosa who was in close relations with the brothers Juli, Docsa and Sandeep TYAGI that the Indian Ministry of Defence was interested in buying helicopters to transport very important government people, and informed ORSI and SPAGNOLINI that he had good chances of success in the tender that would have been shortly issued.

ORSI, as a representative of Agusta Westland spa, designated HASCHKE to manage negotiations in India, placing by his (Haschke's) side his (Orsi's) trusted collaborator in the Indian market MICHEL

HASCHKE and GEROSA, through the TYAGI brothers, in turn through their cousin TYAGI Sashi, managed first to change the tender details, in a favourable way to AgustaWestland spa, modifying the "operational ceiling" from 18 thousand to 15 thousand feet of altitude, thus allowing AgustaWestland spa (which otherwise could not have even submitted an offer) to take part in the tender; then, they managed to introduce a comparative flight trial with non-functional engine, thus facilitating AgustaWestland helicopters, the only ones which had three engines. In this way they managed to get the contract to AgustaWestland. The contract was inked between AgustaWestland International Ltd and the Indian Government on the 8th of February 2010, for the supply of 12 AW101 helicopters at the agreed price of 556 million euros;

ORSI and SPAGNOLINI, first, paid HASCHKE and GEROSA, through a consultancy contract between AW spa and Gordian Services Sarl (a company which is attributable to them), an amount of 400.000 euros, of which 100.000 were paid cash to the TYAGI brothers; later, they signed engineering contracts with companies IDS India and IDS Tunisia, to cover up the payment (still underway) of money to pay Indian public officials and the mediators HASCHKE and GEROSA, in an economic operation in which compensations for mediations were not allowed.

ORSI and SPAGNOLINI, moreover, paid MICHEL Christian a total amount of about 30 million, partly destined to support the corruptive activity meant to bag the order and partly to implement the contract.

The Italian police has said several Indians, including former Air Chief S P Tyagi, as facing allegations of corruption in the Rs 3,546 crore VVIP chopper deal.

Allegations made are that Tyagi tweaked certain requirements to enable Italian helicopter firm AugustaWestland procure the deal to sell 12 helicopters for the travel of VVIPs in India. The other contender had quoted a price almost third the value of the AugustaWestland deal.

AugustaWestland chief Guiseppe Orsi and two middlemen were arrested yesterday in Italy on charges of accepting bribes to swing the deal in India. Allegations are that part of the 51-million dollar pay-off went to S P Tyagi.

The Indian Express had reported earlier that Tyagi's relative Sanjeev Kumar (Julie) Tyagi was named by Itlian prosecutors as involved in the deal whose tender was floated in December 2006. Tyagi was then heading the Air Force.

S P Tyagi is a first cousin of Julie, a Delhi-based businessman. He is one of three Indians being

probed for suspected corruption in the Rs 3,546 crore deal.

The retired officer had confirmed to the paper that he was related to Julie but said they had no business links.

Read our eBook on the deal.

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