| NEW DELHI
NEW DELHI May 26 India will move to recover
bank guarantees from an aborted 560-million-euro helicopter
deal with Italy's Finmeccanica, the defence ministry
said, after an Italian court lifted a freeze on 228 million
euros held with European banks.
New Delhi scrapped the deal with Finmeccanica's
AgustaWestland unit in January, after graft allegations made
against the company almost a year earlier.
The delay highlights the slow headway the Congress party
then in power was able to make on vital defence contracts.
Congress suffered its worst ever defeat in India's general
election in April and May. Hindu nationalist Narendra Modi,
leader of the Bharatiya Janata Party (BJP), is due to be sworn
in as prime minister on Monday night.
The overall value of the guarantee scheme with Deutsche Bank
SpA, Deutsche Bank AG, Intesa Sanpaolo
and the State Bank of India was around 300
million euros, Reuters reported in January.
India said in February it had cashed in two small bank
guarantees but an Italian judge later blocked its efforts to
recover the remaining 278 million euros. On Friday, an Italian
court revoked the freeze on 228 million euros of that figure.
"[The ministry] is studying the order and will take
immediate steps to recover the amounts fully," India's defence
ministry said in a statement on Sunday.
Details will only emerge after the new defence minister
takes office, a ministry spokesman told Reuters on Monday.
Finmeccanica has said it will seek to protect the guarantees
through an arbitration process launched this year after the
contract for a dozen high-end helicopters was cancelled.
Defence is one of four key portfolios, including finance,
home affairs and foreign affairs, over which speculation is
mounting ahead of the swearing-in of Modi's cabinet, set for
Monday night. Modi is an extremely private figure who has kept
even senior party leaders in the dark about his choices.
India's outgoing defence minister, A. K. Antony, was
nicknamed "St. Antony" for his anti-corruption zeal. Yet his
propensity to cancel deals and blacklist companies has hobbled
India's much-needed push to update its military.
(Reporting by Shyamantha Asokan; Editing by Frank Jack Daniel
and Clarence Fernandez)