'Software deal’ used as front for helicopter bribes

Chopper scam: Govt suspends payments for Italian company

NEW DELHI: AgustaWestland, the British helicopter manufacturer, took cover behind India's software exports to route funds it allegedly paid as kickbacks in the Rs, 3,546 croreVVIP chopper deal.

The British company, a subsidiary of Italian

defence and aerospace firm Finmeccanica, routed up to 20 million euro (around Rs 144 crore) in the deal signed in 2010 via Tunisia. The remittances were shown as payments for software developed in India, perhaps because the company reckoned that transfers would not attract suspicion, given the large volume of exports. Software exports are expected to cross $75 billion this year.

The payments started sometime in 2007, or earlier, and went on until last year, when investigators began trailing the kickbacks. Of these payments, at least 100,000 euros was paid in cash to the three Tyagi brothers -- Juli, Docsa and Sandeep -- cousins of former IAF chief SP Tyagi when he was in office.

According to the documents filed in an Italian court, AgustaWestland CEO Bruno Spagnoli and Guido Ralph Haschke, one of the key middlemen and a former director of real estate firm Emaar MGF, signed a consulting contract between the UK-based helicopter company and a firm called 'Gordian Services Sari' worth 400,000 euro. Of this, 100,000 euro was paid to the Tyagi brothers in cash.

Later, engineering contracts were signed involving IDS Tunisia and IDS India - two firms that figure prominently in the probe -- to pay "sums of money in order to pay public officials" in India, the documents show. In 2007, 640,000 euro was paid into IDS India "using invoices issued by IDS India, for non-existent operations," say the court documents.

In 2008, this amount was 1.3 million euro. In the same year, there may have been another payment of 977,263 euro. In the declarations for 2009, there is an entry of 508,000 euro payment to IDS India. In 2011, a payment of almost 6.4 million euro was detected.

The documents establish that the average monthly payment being routed into India was 510,000 euro without any taxes.

According to these documents, the AgustaWestland CEO Spagnoli also corresponded with Michel Christian, a UK-based middleman with deep political connections in India, for a payment of 30 million euro "to support the corrupt activities aimed at the acquisition of the contract". Christian is the owner of Global Service Trade Commerce, headquartered in London and Global Service FZE based in Dubai.

The report accuses the Tyagi brothers of influencing their cousin - IAF chief Tyagi -- for modifying the tender in favour of AgustaWestland, reducing the operating height from 18,000 feet to 15,000 feet and introducing a comparative flight with an engine failure. AgustaWestland's three-engine helicopter benefited from this particular trial procedure, the court filings show.

The documents also detail several meetings attended by representatives of the European firm with Tyagi brothers and the former air chief. One of them also talks about a marriage they attended, and how at least one of the cousins would touch the feet of the former air chief to show him respect.