NEW DELHI, Feb 15:
Government today sent a show cause notice to AgustaWestland for scrapping the Rs 3,600 crore deal for 12 VVIP helicopters even as a CBI team prepared to leave for Italy to probe charges that kickbacks to the tune of Rs 362 crore were paid to bag the contract.
The Defence Ministry also indicated that it could invoke a clause in the contract for recovery of money already paid as it threatened to take other actions as per terms of the contract. More than 30 per cent of the total sum has already been paid.
“The Defence Ministry issued a formal show cause notice to AgustaWestland seeking cancellation of the contract and taking other actions as per terms of the contract,” Ministry spokesman Sitanshu Kar said.
The company was asked to explain the bribery allegations within seven days and reply why the contract of 2010 should not be cancelled.
India has also written afresh to the Italian Government seeking information in the case which has triggered a major uproar here.
A CBI team is also being sent to Italy where the CEOs of AgustaWestland and its parent company Finmeccanica have been arrested on charges of bribery.
The decision by the CBI came as it virtually drew a blank from Defence Ministry in getting any official inputs in regard to alleged kickbacks in the case, official sources said today. The team is likely to leave soon.
The Defence Ministry’s notice comes a day after the ministry warned of legal action, including invoking integrity pact which provides for cancellation of the contract if bribes are paid and recovery of the money already paid.
The Government action came as it prepares for an onslaught in Parliament beginning on February 21, with parties like BJP and Samajwadi Party saying they would raise the issue and seek answers on the alleged scam.
The Defence Ministry, which is under attack, had said yesterday that the Government is determined to take all possible legal and administrative action against the guilty parties and accordingly has ordered a thorough probe by CBI.
After the arrest of Finmeccanica CEO Giuseppe Orsi in Milan on Tuesday, India had put on hold the receipt of the remaining helicopters as well as rest of the payment.
India has already received three and three more were to be delivered next month.
The Government yesterday asked Finmeccanica to state whether any money was illegally paid to any Indian entity or individual “which would be violative of the Integrity Pact or any other terms and conditions of the contract”.
It noted that the contract with AgustaWestland carried an integrity pact that bars paying of bribes or involvement of middlemen, the Ministry warned of “strict action including cancellation of contract, recovery of payment, blacklisting and penal action can be taken against the vendors.”
The Ministry said the contract signed with AgustaWestland includes “specific contractual provisions against bribery and the use of undue influence. Article 22 of the contract deals with penalty for use of undue influence. This clause entitles the ‘Buyer’ to cancel the contract with the ‘Seller’ and recover from him the amount of any loss arising from such cancellation.”
“Article 23 of the contract entitles the ‘Buyer’ to consider cancellation of the contract without any entitlement or compensation to the ‘Seller’ who shall be liable to refund all payments made by the ‘Buyer’ in terms of the contract along with interest,” it said. (PTI)
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