Internal probe gives all-clear

New Delhi, Feb. 20: An internal probe into the Rs 3550-crore VVIP chopper deal ordered by defence minister A.K. Antony after the arrests of Finmeccanica executives in Italy last week has given the ministry a clean chit.

The "informal internal inquiry" has indicated that the Italian conglomerate may have been "fooled" by the alleged middlemen because no evidence of kickbacks being deposited with Indian government functionaries has been found, a defence ministry official said. The inquiry could not establish a money trail.

The judicial inquiry in the Italian court at Busto Arsizio had found evidence that Finmeccanica, the holding company of AgustaWestland, had created a slush fund of Euro 51 million from which bribes were paid through middlemen Guido Haschke, Carlo Gerosa and Christian Michel. The middlemen had funnelled the kickbacks through the cousins of the former IAF chief, S.P. Tyagi, a charge the retired air chief marshal has denied.

The defence ministry's investigation was ordered by Antony after the arrests of Finmeccanica chairman Giuseppe Orsi and AgustaWestland CEO Bruno Spagnolini last week. A team of officials from the CBI and the defence ministry is now in Italy where they were said to have hired lawyers to represent India's case in court.

The inquiry found that the change in specifications leading to the tender for the helicopters was incorporated in the official files in 2005 when Pranab Mukherjee was the defence minister. The proposal was initiated during the regime of his predecessor, George Fernandes, and the Euro 556 million contract was signed on February 8, 2010, by when A.K. Antony had taken over the portfolio.

In effect, the bribe-givers in Italy have admitted they funnelled the slush money to bribe-takers in India but the Indian government has not yet found evidence of where and when the cash was deposited, if at all.

"It could well be possible that some people claiming they will clinch the contract took the money but did not route it," said the defence ministry official. The kickbacks are said to have been paid in several tranches between 2007 and 2011.

"We found that the rules under the defence procurement procedure were strictly adhered to. We are a little surprised how an outsider could get into this deal," the official said.

Antony is preparing to face a tough session in Parliament that convenes for the budget session tomorrow. He ordered the inquiry while preparing for the session.

In a speech at a seminar on Army Air Defence today, the defence minister put down his written speech and spoke extempore.

"We have gone to the maximum extent of cancelling and blacklisting six major defence industries including four foreign vendors. I got an email from abroad about some foul play in defence deals and corruption by one Abhishek Verma. Immediately, we sent that email to CBI and Enforcement Directorate," he said.

"Now that man is in jail. Even after all this there are people who are not learning lessons. So we have to further tighten our mechanism. Whenever allegations are made we have to go to the root and find the truth and punish the guilty. We cannot waste a single penny of Indian taxpayers' money for greedy players."

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