What is the AgustaWestland Case?

After years of complex technical evaluation and commercial negotiations, India decided to place an order in 2010 with AgustaWestland, an Italian company that was a joint venture between the Italian company Agusta and Westland of UK, to procure 12 (3-engine) AW101 specially configured choppers for use by the President of India, Prime Minister and other senior dignitaries.

The total value of the deal was around Rs 3,600 crore and was confirmed with a 30% advance payment. Three AW101s were delivered by the time the corruption and bribery allegations took centre stage, with the government suspending further deliveries and holding back any additional payment to the company.

In 2013, the Milan Court of Appeals, while investigating cases of corruption involving the mafia, government officials and corporate executives, stumbled upon the AgustaWestland VVIP chopper deal with India where it came to light that over Rs. 330 crore had been paid in bribes through middlemen to various officials in India to swing the deal in favour of Agusta. CEO of Finmeccanica Giuseppe Orsi and CEO of AgustaWestland Bruno Spagnolini were subsequently arrested for their involvement.

This had a direct impact on India with the opposition raking up the matter in Parliament. Just before the UPA regime was to move out of office in 2014, the government cancelled the deal and ordered an investigation.

The recent judgement by the Italian court this year confirming that bribes were indeed paid and that middlemen involved in the deal had mentioned Mrs Sonia Gandhi and her political secretary Ahmed Patel as the ‘driving force’ behind the deal, has raised a political storm in India.

The judgement in Italy has once again brought the case to the forefront of the Indian political battleground with the BJP, already on the back foot in Parliament, finding fresh ammunition to counter Congress.

Allegations of bribery and corruption

Unfortunately, almost all international defence deals signed by India have had whispers of corruption and bribery at the highest levels, with some cases coming into sharp media focus. The infamous Bofors case is a fitting example.

Despite voices getting louder in India regarding corruption pertaining to the Augusta Westland deal, the then UPA regime initially dismissed allegations of any wrongdoing. It took an Italian prosecution team to raid offices of the then AgustaWestland and its parent company, Finmeccanica, for allegations of bribery in this deal that finally drew political and media attention in India.

The opposition was quick to seize the opportunity and raised a furore in Parliament in early 2013 that ultimately led to the then Defence Minister AK Anthony ordering a Parliament-monitored investigation into the entire affair.

Caught in the web

1. Former Air Force Chief SP Tyagi:  Before SP Tyagi took office as Chief, the IAF was opposing any change to the original RFQ that required choppers to be able to fly at an altitude of 6000 metres.

Later, the SPG, which is responsible for protecting VVIPs, raised an objection to the cabin height saying it required the cabin height to allow for security personnel to stand straight up.

Furthermore, the choppers were not tested in India under Indian conditions as the Air Force said that the deal would get further delayed by nine months and therefore, the trials were held overseas.

Once SP Tyagi took office, the technical requirements were relaxed to allow AW to bid for the deal. Although S.P. Tyagi denies any wrongdoing, he has a lot of explaining to do on how his cousins were involved and whether he met any of the middlemen including Christian Michel.

2. Docsa, Julie and Sandeep Tyagi: The three brothers and cousins of SP Tyagi were direct recipients of the bribe money that was routed through Christian Michel’s company Gufic Trading, as also Chandigarh-based companies — IDS India and Aeromatrix.

3. Advocate Gautam Khaitan: He was on Board of Directors at Aeromatrix along with his assistant Arihant Jain. Aeromatrix was an Indian firm providing design and engineering services to Finmeccanica. Gautam Khaitan has been identified as one of the principle players involved in routing the bribe money into India and for subsequent payouts to those involved.

4. Praveen Bakshi – CEO Aeromatrix: Since payments were routed through Aeromatrix for work that never existed, Praveen Bakshi now stands exposed for his role in the VVIP chopper scam.

5. Satish Bagrodia – Chairman of IDS Infotech: IDS Infotech India and IDS Tunisia were established to provide engineering and design services to AgustaWestland. Satish Bagrodia happens to be the brother of former Union Minister Santosh Bagrodia. IDS India and its subsidiary, IDS Tunisia, were used to receive money for design work that did not exist, leading to a strong suspicion that the company was established as front for routing bribe money. The court in Milan has mentioned names of Indian firms that were recipients of the bribe money and included IDS and Aeromatrix.

6. Christian Michel: It was the Milan Court of Appeals that first came out with the disclosure in 2010 that Agusta had paid €18 million to Global Services FZE,  a company owned by Britain born Christian Michel. Michel came up with a plan of routing in money from Agusta. In May 2010, signed an agreement with AW to sell 14 junk Westland helicopters – WG-30 to AW, which had been purchased earlier by Pawan Hans but were barely used on account of technical failures, for a massive €18.5 million.

He then signed a deal with Pawan Hans to buy back these junk choppers for a throwaway price. The differential was official money with Michel’s company, Global Services, which then transferred the money to another company. Michel then used this money to bribe officials to swing the VVIP chopper deal in favour of AW.

The ED and CBI are now hunting him for further questioning.

7. Guido Haschke and Carlo Gerosa

Meanwhile, the investigations in Italy were driving the plot to uncover the truth and they came up with names of middle-men Christian Michel, Guido Haschke and Carlo Gerosa, the latter two being on Board of Directors in Aeromatrix, along with Gautam Khaitan and his assistant Arihant Jain. Jain later resigned from the Board.

Both were direct recipients of money from AW and were closely interacting with Tyagi brothers on the chopper deal.

8. AK Anthony

It was under his watch that the VVIP Chopper deal was signed in 2010. After initial denials of any impropriety in the deal, AK Anthony was forced to admit in early 2013 that there was indeed a case of corruption and money did change hands. He, now, has a lot of explaining to do on why the technical specifications were relaxed and how the government broke the rule by placing an order on AW, a company that was officially not a manufacturer but a trading agency.

9. Sonia Gandhi and Ahmed Patel

In its judgement, the Italian court has mentioned that the name of Sonia Gandhi and her political secretary Ahmed Patel have been mentioned by one of the middlemen as being the ‘driving force’ behind the deal, alluding to the fact that they, too, were involved.

The BJP has been leading the charge against the UPA leadership for its role in the deal but it is only when investigations in India are complete will the full story unfold along with its dubious participants. Till then, the country will have to wait and watch the political mudslinging from both sides.