News Column

Italy Defense Firm Chief Held for India Graft Allegations

Feb 12, 2013

Giuseppe Orsi, the chairman and executive director of Italy's state-controlled defence group Finmeccanica was arrested Tuesday on charges of international corruption, local media said.

Prosecutors suspect that the 51 million euros (68 million dollars) that Finmeccanica paid to Swiss-based intermediaries in 2010 to win a contract for the sale of 12 helicopters to India was, in fact, bribe money, some of which ended up in the hands of Italian politicians.

Orsi, who was leading Agusta Westland at the time, had been under investigation in relation to the allegations since April, and has denied all the charges.

His successor at the helicopter firm, Bruno Spagnolini, was placed under house arrest on Tuesday. Magistrates also asked Swiss authorities to extradite the two intermediaries involved in the affair.

In New Delhi, Indian Defence Minister AK Antony ordered an investigation into the alleged bribery regarding the sale of the helicopters, Defence Ministry spokesman Sitanshu Kar said.

New Delhi also said Italy had not shared details of the corruption probe.

"We had asked the government of Italy to provide us information that they may have in connection with the allegations, but we have not received any response from them so far," Foreign Ministry spokesman Syed Akbaruddin told reporters.

"The argument being that this is, in Italy, a judicial process ... because the prosecutors are perhaps working under judicial supervision, and therefore the executive is not able to share information with us."

The helicopter deal is estimated at around 750 million dollars. India began taking delivery of the choppers in December 2012, a process that is to be completed by July.

Meanwhile, in a statement, Finmeccanica expressed its "solidarity" towards Orsi and Spagnolini. It called on magistrates to conclude their investigations as soon as possible and assured the "orderly continuation" of its business.

Orsi was promoted to Finmeccanica's top position in December 2011 after his predecessor, Pierfrancesco Guarguaglini, resigned due to allegations that, under his management, the company had created slush funds to bribe public officials.

Magistrates are basing their investigations on testimonies from Lorenzo Borgognoni, a former aide to Guarguaglini. He alleges that part of the bribe money connected to the Indian contract was meant for the Northern League, the party which backed Orsi's appointment.

The Northern League, a key member of the conservative coalition led by former premier Silvio Berlusconi ahead of February 24-25 elections, strongly denies the claims.

On its website, Finmeccanica describes itself as "Europe's leading defence systems company," with "significant production assets" in Italy, Poland, Britain and the United States.

Last week, another major Italian company was tainted by scandal when prosecutors said the chief executive of energy firm ENI, Paolo Scaroni, had been placed under investigation because of a suspected bribe to win business in Algeria.

Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH

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