India says it will not cancel Finmeccanica copter deal without evidence of wrongdoing

Published February 19, 2013

| Associated Press

India's defense minister said Tuesday that it was too early to cancel a multimillion-dollar deal with Italian company Finmeccanica over charges it paid bribes to clinch the sale of 12 helicopters to India.

The government would not go by media reports but would wait for evidence of any wrongdoing before acting to scrap the deal, A.K. Antony told reporters.

India placed the $750 million contract on hold last week after the Italian defense group's chief executive was arrested in Milan on charges he paid bribes to obtain the contract. Giuseppe Orsi denies wrongdoing.

The Defense Ministry last week ordered the CBI, India's equivalent of the United States' FBI, to investigate the deal and a team of officials was in Italy to get details of the contract.

Antony said the government would place all facts before Parliament.

"The government has nothing to hide. We will find the truth and punish the guilty," he said.

India signed the contract with the company's helicopter division, AgustaWestland, in 2010. Three of the 12 helicopters were delivered in December.

Antony said the agreement with Finmeccanica includes an integrity clause against bribery or the use of undue influence. Under the terms of the clause, if any person or the company is found to have bribed officials or made any kind of payoff, the agreement can be scrapped and the firm blacklisted.

"But we cannot act unless we have some evidence. If we get any evidence of wrongdoing, we will go to any extent to take action," Antony said.

India is expected to spend $80 billion over the next 10 years to upgrade its antiquated military.

The country has become the world's top arms and defense equipment buyer in recent years as it tries to keep up with China's growing power in the region and with longtime rival and neighbor Pakistan.

India accounted for 9 percent of all international arms imports from 2006 to 2010, and is expected to keep the top spot for the foreseeable future as it upgrades its air force, army and navy.

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