Shyam Bhatia in London
British Prime Minister David Cameron’s forthcoming visit to India is in danger of being overshadowed by allegations of an unfolding commercial scandal. Cameron and his entourage of businessmen, including defence and aerospace executives, are due to touch down in India next Monday, but the timing of their arrival is embarrassing as it comes in the wake of corruption allegations involving the sale of AgustaWestland helicopters to the IAF.
Although the helicopters are manufactured in the UK, AgustaWestland is owned by Milan-based Finmeccanica, Italy’s biggest defence company.
Finmeccanica’s chairman Guiseppe Orsi and AgustaWestland’s chief executive Bruno Spagnolini have been arrested by the Italian police.
Both men and state-controlled Finmeccanica, the head office of which in Milan was searched this week, deny any wrongdoing.
The company has sold some 50 helicopters to India and recently secured a 560 million euro contract to sell another 12 luxury models for use by the President, Prime Minister and other VIPs.
At the heart of the scandal are allegations that Finmeccanica paid 51 million euros in bribes to Indian contacts to secure the latest contract against competition from French, US and Russian competitors.
So far, three out of the nine helicopters have been delivered, but the delivery of the remaining nine has been put on hold pending the outcome of an inquiry by the CBI.
A Defence Ministry spokesman said earlier this week that the CBI inquiry was ordered after no information was received from the Italian and British Governments about the allegations concerning the deal.
“Since no specific input has been received so far from the two governments, the Ministry of Defence has decided to refer the case to the CBI for inquiry,” the Defence Ministry statement said.
The importance of the Indian market for AgustaWestland was underlined six days ago by the company’s Managing Director for International Business, former British Defence Minister Geoff Hoon.
Speaking on the eve of the Aero India air show in Bangalore, Hoon said, “India is an important and growing market for AgustaWestland, so at Aero India, we are promoting the most modern and capable rotorcraft available today, confident that we can build on our past successes and fulfil the future requirements of both the Indian armed forces and commercial customers.
“We will also be using Aero India to help pursue our strategy to expand and develop our relationships with Indian companies to ensure we are a part of India’s growing aerospace industry.
“Indian Rotorcraft Limited, our joint venture with Tata Sons, is a prime example of this strategy and our long-term commitment to India.”
In London, India’s High Commissioner to the UK said on Tuesday night that Cameron’s visit to India is expected to boost bilateral ties. “There will be significant advancement in India-UK relations with the forthcoming visit of the British Prime Minister to India in the near future,” Dr Jaimini Bhagwati was quoted as saying.