| BUSTO ARSIZIO, Italy
BUSTO ARSIZIO, Italy Feb 12 Three brothers with
family ties to a former head of the Indian air force helped to
twist rules in a helicopter tender won by Italy's
AgustaWestland, prosecutors alleged in an arrest warrant for a
top Italian businessman.
Italian prosecutors said in the warrant reviewed by Reuters
on Tuesday that two managers at AgustaWestland, a unit of
defence group Finmeccanica, paid go-betweens to help
it win the 2010 contract to supply 12 helicopters to India.
Part of these payments ended up with the three Indian
brothers, Juli, Docsa and Sandeep Tyagi, whose cousin Sashi
Tyagi was former Indian air force chief. None of the Tyagis has
been accused of wrongdoing by officials in India.
In a growing corruption scandal, police arrested on Tuesday
AgustaWestland's former chief executive Giuseppe Orsi, who now
heads Finmeccanica. Orsi denies any wrongdoing over the
The case, which is still in its preliminary investigation
phase, has rocked Italy before parliamentary elections on Feb.
24-25, and also in India, the world's largest weapon importer.
Prosecutors in the northern town of Busto Arsizio, near
AgustaWestland's headquarters, said Orsi hired U.S.-born Guido
Ralph Haschke, who was then a consultant for the Finmeccanica
group, to lead dealings in India to secure the contract.
Haschke and his partner Carlo Gerosa, prosecutors said, had
close ties with the Tyagi brothers.
Prosecutors allege that Orsi, along with the current chief
executive of AgustaWestland Bruno Spagnolini, paid 400,000 euros
in consultancy fees to Haschke and Gerosa. "Of this, 100,000
euros in cash were given to the Tyagi brothers," they said in
the 65-page warrant.
The money went to the brothers to pressure Indian officials
and help doctor the tender terms to favour the specification of
AgustaWestland's helicopters, the prosecutors alleged.
The tender was changed to accommodate AgustaWestland by,
among other things, lowering required altitudes where the
helicopters could operate to 15,000 feet from 18,000 feet, "thus
allowing AgustaWestland, which otherwise would not even have
been able to present an offer, to take part in the tender", the
The tender terms were also changed to introduce an engine
failure flying test. This favoured AgustaWestland as its
helicopters were the only ones in the tender operating with
Orsi's lawyer said his client denied distributing any money
or pocketing a single euro, adding that the investigation did
not provide any evidence of illicit payments. AgustaWestland
said on Tuesday it supported Spagnolini who was placed under
The warrant also covered Haschke and Gerosa. Neither has
been arrested as they are in Switzerland. A lawyer for Haschke,
contacted by reporters, declined to comment on the case while
Gerosa could not be reached for comment.
Reuters was not immediately able to locate the Tyagi
brothers, nor Sashi Tyagi.
Sashi Tyagi, head of India's air force from 2004-2007, in
November told the India Today news weekly he had no memory of
the issue. The warrant did not explain how Tyagi might have been
involved in a deal completed after he had left his post.
The investigation into Finmeccanica, which started more than
a year ago, is one of a series of corruption scandals in defence
dealmaking in India. Defence Minister A.K. Antony has ordered an
inquiry into the deal to be conducted by the Central Bureau of
Investigation, the country's federal police force.
The arrests over Indian bribery allegations come as
Finmeccanica unit Alenia Aermacchi hopes to compete for a
contract to supply over 50 military transport aircraft to India
in competition with European aerospace group EADS.
According to specialist defence publication IHS Jane's,
Alenia would build 40 of the 56 C-27J Spartan airlifters in
India and use the same assembly line to meet future regional
demand for tactical air transport.
The military arm of EADS subsidiary Airbus told Reuters last
week it would offer its C295 military transport plane as an
alternative, adding that manufacturers were waiting for a formal
competition document from the Indian government.