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Defense Ministry says India puts $750 million Italian helicopter deal on hold, may cancel it

India's Defense Ministry says it has put a $750 million contract to purchase helicopters from Italian company Finmeccanica on hold amid allegations that bribes were paid.

The ministry said in a statement Friday that a formal notice has been sent to Finmeccanica's AgustaWestland helicopter division seeking cancellation of the contract. The company has a week to respond to the Indian notice.

India signed the contract with AgustaWestland for the purchase of 12 helicopters in February 2010. Three of the helicopters were delivered in December.

India has launched its own investigation into the 560 million euro ($750 million) deal after the Italian defense and aerospace giant's chief executive was arrested in Milan on Tuesday on charges he paid bribes to win the Indian contract.