“Subject to certain conditions imposed on the company,” as described by top government sources, the Union Government has decided to resume business with Leonardo SPA, the erstwhile Italian firm Finmeccanica.
Finmeccanica and its UK-based subsidiary AgustaWestland’s names cropped up in 2013-14 when allegations of kickback surfaced during the UPA Government providing valuable fodder to the then opposition and in power since 2014 – political alliance NDA. Defence Minister at the time AK Antony had cancelled the Rs 3,546 crore deal which came to be known as the VVIP helicopter scam.
The decision is seen as an effort to sustain the momentum of modernisation of the armed forces and enlarge India’s option to include extensive weapons systems ranging from torpedoes and 127mm naval guns to radar and short-range surface-to-air missiles, the firm has developed.
The removal of the ban will help India access much-required technology for its projects like Black Shark torpedo for the Scorpene submarines, at present under construction at the Mazagaon Docks Limited. The navy would need these torpedoes, manufactured by one of the subsidiaries of the Leonardo group, for increased lethality.
The decision comes soon after Prime Minister Modi’s first private meeting with his Italian counterpart Mario Draghi on the sidelines of the G-20 summit in Rome on October 29. However, the high-level committee had examined the matter at the request of Leonardo SPA and submitted its recommendations after consultation with the law ministry. Italy has been repeatedly asking India to lift sanctions.
Under the terms, Leonardo SPA cannot make any commercial claim or file any civil suit against the Government of India for any prior agreement. During an investigation by prosecutors in Italy, allegations of paying Rs 360 crore as bribes to Indian politicians, bureaucrats and IAF officers first surfaced in 2012. The agreement to buy 2 AW-101 VVIP helicopters was signed in 2010. The CBI had filed cases against former IAF chief Air Chief Marshal SP Tyagi, Finmeccanica CEO Giuseppe Orsi, Augusta Westland chief Bruno Spagnolini and alleged mediator Christian Michelle James.