(This was originally posted in Times Of India by Rajat Pandit)
India has lifted the ban on business dealings with defence major Leonardo SpA, the erstwhile Italian conglomerate Finmeccanica enmeshed in the infamous Rs 3,546 crore VVIP helicopter scam along with its UK-based subsidiary AgustaWestland International since 2013-2014. The defence ministry’s decision to resume business with Leonardo SpA is “subject to certain conditions imposed on the company”, top government sources told TOI on Saturday.
Under the conditions, Leonardo SpA cannot make any commercial claims or file any civil suit against the Indian government for any previous deal. Moreover, new business dealings will take place “without any prejudice” to the ongoing investigations into the alleged VVIP helicopter scam by the CBI and Enforcement Directorate, which will continue, the sources added.
The MoD decision to lift the ban was taken after a high-level committee examined the matter on a request made by Leonardo SpA and submitted its recommendations after consultations with the law ministry. Italy has repeatedly been asking India for the ban to be lifted in bilateral talks. Prime Minister Narendra Modi also held the first in-person meeting with his Italian counterpart Mario Draghi on the sidelines of the G-20 summit in Rome on October 29. Sources said the ban on Leonardo SpA and its subsidiaries had “limited India’s options” in the international arms market because the conglomerate produces a wide array of weapon systems ranging from torpedoes and 127mm naval guns to radars and short-range surface-to-air missiles.
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One of the earliest casualties of the scandal, in fact, was the cancellation of India’s proposed Rs 1,200 crore deal to buy Black Shark heavy-weight torpedoes from a Finmeccanica subsidiary for the six French-origin Scorpene submarines being constructed at Mazagon Docks. It was in early-2012 that allegations of Rs 360 crore being paid as bribes to Indian politicians, bureaucrats and IAF officers to swing the Rs 3,546 crore deal to supply 12 AW-101 VVIP helicopters had first surfaced in a probe by prosecutors in Italy. The deal had been inked in 2010.
With the MoD first freezing all payments to AgustaWestland and then finally scrapping the contract in 2013-2014, the CBI had registered a case against former IAF chief Air Chief Marshal S P Tyagi, Finmeccanica CEO Giuseppe Orsi, AgustaWestland chief Bruno Spagnolini and alleged middleman Christian Michel James, among others.
The probe is yet to be concluded, with the CBI recently telling the court that its investigation is pending for “want of complete execution of letters rogatory” sent to nine countries and other reasons. Leonardo was among the 15 arms companies on the “put on hold/suspended” list of the defence ministry till September this year. At the top are six companies, including Singapore Technologies Kinetics, Israel Military Industries, Rheinmetall Air Defence (Zurich) and Corporation Defence (Russia), which are “debarred” completely. Engine manufacturer Rolls Royce and Tatra truck manufacturer (Czech Republic), in turn, are the four companies with whom “restricted procurements” are allowed on the basis of operational urgency, national security and non-availability of other alternatives.