Author: Vaishnavi G Nair, a student at the National University of Advanced Legal Studies
Introduction
A widespread and troubling issue that continues to haunt modern society is that of scams. From identity theft to financial fraud, these deceptive schemes cause significant losses, along with emotional distress and erosion of trust. The advancement and evolution of technology has refined the methods used by scammers.
There have been instances of high profile individuals, like businessmen, politicians and bureaucrats exploiting their positions for personal gain – resulting in corruption scandals that impede the nation’s development and progress. As far as India is concerned, the country has witnessed such scandals across various sectors – from public infrastructure to defence procurement. Such instances are testimony to the systemic weakness of regulatory mechanisms within the country, leading to public outrage and financial losses amounting to billions of dollars.
One such corruption scandal is that of the AgustaWestland VVIP scam. Its origin can be traced back to a 2010 deal for the purchase of 12 AW101 helicopters intended for VVIP transport. Fingers were pointed at the integrity of the procurement process, along with allegations of bribery being raised against politicians and high-ranking officials. As the events unfolded, serious questions were raised about the governance and accountability in defence contracts. The scam came into light in 2013, as a million-dollar corruption case relating to the purchase of 12 AugustaWestland AW101 helicopters by the Indian government for 3.6 billion.
Background
AgustaWestland came into existence in 2001 as a result of the joint venture agreement between Finmeccanica and GKN in July 2000. It was formed through a merger between Agusta (subsidiary of Finmeccanica) and Westland (subsidiary of GKN). The company was later renamed as FNM Helicopters in January 2016 and later as Leonardo in April 2016 (with effect from 2017).
The AW101 helicopters are one of the most flexible, advanced and capable multi-role helicopters with an advanced design, coupled with long range and endurance. The helicopter can be used for a wide range of purposes like SAR, Maritime, Battlefield/Personnel Recovery. This helicopter also ensures the highest standards of safety through its three-engine configuration, sophisticated Health and Usage Monitoring System and 30-minute run-dry transmission.
The United Progressive Alliance (UPA) government, in February 2010, signed a contract for the purchase of 12 AgustaWestland AW101 helicopters, built by Italian defence manufacturing giant Finmeccanica, at 3,600 crore rupees. These helicopters were to be purchased to be used for the Communication Squadron of the Indian Air Force, which ferries the President, the Prime Minister and other VVIPs.
There were allegations that Giuseppe Orsi, Finmeccanica’s then-chief executive, had paid bribes to secure the deal. The scam came to light in 2012 after the discovery that several politicians and bureaucrats had allegedly accepted bribes to swing the deal. After the arrest of Giuseppe Orsi on suspicion of paying bribes, India froze payments for the 12 AW101 helicopters. By this time, 3 choppers had already arrived in India. The delivery of the remaining 9 choppers, out of the total 12 choppers, were put on hold.
The deal for the helicopters was suspended by India after the Italian investigators began to investigate the accusations regarding the payment of bribes by AgustaWestland to win the contract. The deal was scrapped “on grounds of breach of a pre-contract integrity pact”, according to a statement issued by the then defence ministry, headed by AK Antony.
The CBI Investigation
The then defence minister, AK Antony ordered a CBI probe into the VVIP chopper deal after the arrest of the then CEO of Finmeccanica, Giuseppe Orsi, was arrested by the Italian authorities in relation to a probe into international corruption. Initially, the Central Bureau of Investigation registered a preliminary enquiry against eleven people including the former Indian Air Force Chief and the then Air Chief Marshal S.P. Tyagi. After it had found sufficient evidence, the CBI registered the FIR which had 13 names – the then Air Chief Marshal S.P. Tyagi and his three brothers – Sandeep, Dosca and Juli, former Indian Air Force Chief, Pratap Aggarwal (Chairman and Managing Director of IDS Infotech) and Satish Bagrodia. The names of four companies were also mentioned in the FIR – UK-based AgustaWestland, Italy-based Finmeccanica and Chandigarh-based IDS Infotech and Aeromtrix.
The investigation of CBI focussed on the alleged payment of bribes to Indian officials for the manipulation of technical specifications in the tender, in favour of AgustaWestland. According to the statements given by the then federal auditor, the defence ministry had initially prescribed that the helicopters should have the ability to fly an altitude of 6,000 metres. But the AW101 helicopters were certified to fly only 4,572 metres. The CBI had alleged that a suggestion to reduce the altitude limit of the helicopter from 6,000 metres to 4500 metres was given by S.P.Tyagi. He was arrested in 2016. The three brothers of S.P.Tyagi – Sandeep, Dosca and Julie were also directly involved with the bribe money. The money was channelled through 3 companies – Gufic Trading, IDS India and Aeromatrix.
Gufic Trading is the company of Christain Michel, who is one of the three middlemen allegedly hired by AgustaWestland to swing the deal by influencing officials, the other two being Carlos Gerosa and Guido Haschke. The CBI had alleged that Michel had received more than 30 million Euros for this purpose. In 2018, Michel was extradited to India from the UAE. He was working there as a consultant for a subsidiary of AgustaWestland. According to the CBI, he had arranged kickbacks to Indian officials to secure the chopper deal for AgustaWestland in 2010. Ever since he was handed over to the Indian government by the UAE authorities through a special plane from Dubai, he has been in jail.
IDS Infotech and its subsidiary IDS Tunisia were established to provide AgustaWestland with services relating to design and engineering. Satish Bagrodia, brother of former Union Minister Santosh Bagrodia was the chairman of IDS Infotech. Since IDS India and IDS Tunisia were receiving money for the work that it had never done, suspicions arose that the company was established for the purpose of routing bribe money. IDS along with Aeronatrix were named by the Milan court under the list of Indian firms that used to receive bribe money.
Aeromatrix is a Chandigarh-based Indian firm that provides services relating to design and engineering to Finmeccanica. This firm was also receiving money for the work that it had never done, leading to major suspicions that Praveen Bakshi, the CEO of Aeromatrix had a major role in the scam. Another important player in the scam was Advocate Gautam Khaitan, a part of the Board of Directors at Aeromatrix. He had a significant role in bringing the bribe money to India. Carlo Gerosa and Guido Haschke, the 2 middlemen other than Michel, were also part of the Board of Directors at Aeromatrix. Both of them directly received the bribe money.
In 2016, the CBI formed a Special Investigation Team (SIT) to streamline the probe of some high-profile cases such as that of the VVIP Chopper scam. A Special Investigation Team headed by an additional director Asthana was formed for the investigation of the VVIP chopper scam.
The CBI and the Enforcement Directorate had sent letters rogatory to 8 countries including Mauritius, Switzerland, Italy, Singapore, UK, UAE, Tunisia and the British Virgin Islands. The CBI filed the charge sheet against ten people including S.P. Tyagi in 2017.
The VVIP chopper case is still ongoing in India. In a recent development, the defence ministry has ordered the suspension of all dealings with Defsys Solutions Private Limited, stating its involvement in the scandal. Defsys Solutions Private Limited is a Gurgaon-based company which specialises in the making of fighter aircraft pylons, defence electronics and fuel tanks.
Conclusion
The VVIP Chopper case is a stark reminder of the challenges of corruption that India is facing. The vulnerabilities in the defence procurement process is made apparent through this case. The ongoing nature of the case, coupled with the recent developments demonstrates that the repercussions of such scandals are long-lasting.
The scam remains a cautionary tale about the damaging effects of corruption on public trust in the integrity of democratic institutions. It emphasises on the persistent need for transparency, ethical governance and administrative reform.
FAQs :
Certainly. Here are some FAQs based on the information provided in the text:
1. What is the AgustaWestland VVIP chopper scam?
A: It’s a corruption scandal involving the 2010 deal for the purchase of 12 AW101 helicopters by the Indian government for VVIP transport, worth 3,600 crore rupees (about $530 million).
2. Who were the key players involved in the scam?
A: Key figures included Giuseppe Orsi (Finmeccanica’s then-chief executive), S.P. Tyagi (former Indian Air Force Chief), and Christian Michel (alleged middleman).
3. What was the main allegation in the scam?
A: The main allegation was that bribes were paid to Indian officials to manipulate technical specifications in the tender to favour AgustaWestland.
4. What specific change in specifications was allegedly made to favour AgustaWestland?
A: The altitude requirement for the helicopters was allegedly reduced from 6,000 metres to 4,500 metres, which favoured AgustaWestland’s AW101 helicopters.
5. What action did India take regarding the deal after the scandal came to light?
A: India suspended and then scrapped the deal, citing breach of the pre-contract integrity pact.
