India's blacklist warning after Italian CEO arrest
Wednesday, February 13, 2013 - 01:40
Feb.13 - India has said it might blacklist Finmeccanica SpA and cancel a deal to buy 12 helicopters from the Italian defence group if allegations of bribery are proven against the company. Joanna Partridge reports
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It's already rocking Italy's business world now a corruption scandal involving its defence contractor Finmeccanica is making headlines in India.
The country's defence minister is on the attack - and has ordered an immediate inquiry.
(SOUNDBITE) (English) INDIA'S DEFENCE MINISTER, ARACKAPARAMBIL KURIEN ANTONY, SAYING:
"I can assure you the moment we get a report from CBI, we will take earliest and strongest action provided in the integrity pact. That includes cancellation of the contract, blacklisting the companies and criminal action will follow."
That's not good news for Italy's state-controlled defence contractor.
Its CEO Guiseppe Orsi was arrested on Tuesday by police investigating bribery allegations.
The case relates to the sale of 12 executive helicopters to India's Air Force.
They were to be to used to transport leading politicians.
India's former Chief of the Air Staff is shocked.
(SOUNDBITE) (Hindi) FORMER CHIEF OF THE AIR STAFF, AIR CHIEF MARSHAL (RETD) SHASHINDRA PAL TYAGI, SAYING:
"My name and my relatives' names have been dragged into this issue but I am confident there were no irregularities here, as far as I know, so I welcome an inquiry."
India is the world's largest weapons importer and it has a long history of corruption in defence deals.
A multi-million dollar scandal in the 1980s over the purchase of Swedish Bofors artillery guns contributed to the election defeat of the then Prime Minister Rajiv Gandhi.
The current government has also been buffeted by similar scandals.
The Finmeccanica investigation may have political impact in Italy - where elections are less than two weeks away.
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