India said to ease ban on Italian firm Leonardo, but with strict riders

Photo: Agusta Westland’s AW-101 helicopter.

New Delhi: India has removed restrictions to do defence business on Italian arms major Leonardo S. p. A., but with riders including the company not making any financial claims over past deals.

India had barred Leonardo in its earlier avatar as Finmeccanica in early 2014, even before Narendra Modi was elected as prime minister, over reported kickbacks in a Rs 3,546-crore contract with the Italian major’s United Kingdom-based subsidiary Agusta Westland for supplying 12 helicopters for travel by very important persons.

The ban was lifted, apparently, to widen the market for India’s arms needs, as Leonardo offers wide-ranging solutions including naval torpedoes, 127mm naval guns and short-range surface-to-air missiles, the Times of India reported today.

The Indian Ministry of Defence’s decision to resume business with Leonardo is “subject to certain conditions imposed on the company”, it reported without stating from whom it got this information in the Government of India.

Under the conditions, Leonardo cannot make any commercial claims or file any civil suit against the Indian government for any deal, which would mean it cannot revive the now cancelled deal for the 12 helicopters for VIP travel.

The lifting of restrictions for business would not mean the current investigation and court cases withh regard to the VIP chopper case would stop. Rather, the probe by the Central Bureau of Investigation that deal with serious crimes and the Enforcement Directorate that deal with financial frauds would continue “without any prejudice”.

A high-level committee which had examined repeated requests from both Leonardo and the Italian government during bilateral meets, had recommended after consultations with the Ministry of Law, that the restrictions could be eased.

Prime Minister Narendra Modi had held the first in-person meeting with his Italian counterpart Mario Draghi on the sidelines of the G-20 Summit in Rome on Oct. 29.

The ban on Leonardo had reportedly “limited options” for India’s quest to buy quality military equipment and weapons from the global market, other media reports too said.

It was in early-2012 that allegations of Rs 360 crore being paid as bribes to Indian politicians, bureaucrats and Indian Air Force (IAF) officers to swing deal to supply 12 AW-101 VIP helicopters had first surfaced in a probe by prosecutors in Italy.

The deal had been inked in 2010 when Indian National CongressManmohan Singh was prime minister. The CBI had registered a case against retired IAF chief Air Chief Marshal S P Tyagi, Finmeccanica chief executive officer Giuseppe Orsi, Agusta Westland’s Bruno Spagnolini and alleged middleman Christian Michel James, among others.

India had received three of the VIP choppers after the deal had been signed, but these assets are currently mothballed at the VIP squadron based at the Palam air base in Delhi.

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