Finmeccanica helicopter corruption trial starts in Italy

BUSTO ARSIZIO, Italy, June 19 Wed Jun 19, 2013 7:09am EDT

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BUSTO ARSIZIO, Italy, June 19 (Reuters) - The trial of the former head of Italian defence group Finmeccanica began on Wednesday, with Giuseppe Orsi facing corruption charges over a deal to sell 12 helicopters to the Indian government.

Bruno Spagnolini, the former chief executive of AgustaWestland - the division of Finmeccanica that sold the helicopters - is being tried alongside Orsi on the same charges.

The scandal has raised the prospect that Finmeccanica could be blacklisted in India, the world's largest arms importer and an important growth market for the state-controlled company.

Prosecutors have accused Orsi of paying bribes to intermediaries to secure the sale of the helicopters in a 560 million euro ($749 million) deal in 2010 when he was head of AgustaWestland.

The arrest warrant for Orsi and Spagnolini, seen by Reuters, said that the Indian tender was changed to deliberately favour the Italian firm.

Finmeccanica and Orsi, who left the company a few days after his arrest on Feb. 12, deny any wrongdoing. Spagnolini, who also stepped down, also denies any responsibility in the matter.

During a break in the hearing on Wednesday Orsi's lawyer Ennio Amodio said: "We will demonstrate that the tender in India was regularly carried out and nothing illegal was done in that country."

Neither Orsi nor Spagnolini were in court.

The court, which decided to let India's Ministry of Defence and Italy's tax agency seek damages, said the next hearing will be held on July 11.

Spagnolini's lawyer, Massimo Bassi, asked that Indian Defence Minister A.K. Antony be called as a witness.

A legal source told Reuters he expected a long trial.

India has frozen payments for the helicopters pending an inquiry by the country's Central Bureau of Investigation into AgustaWestland and has said it is seeking to cancel the deal.

Last week India launched a second corruption probe into AgustaWestland regarding a deal to sell 197 army helicopters, potentially dealing another blow to a company that India might blacklist. ($1 = 0.7467 euros) (Additional reporting by Danilo Masoni; Writing by Lisa Jucca; Editing by Erica Billingham)

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