Latest revision as of 11:41, 10 December 2016

Some details about those linked to Agusta middlemen; Graphic courtesy: The Times of India, June 3, 2016

Agusta Westland, a series of events, in brief; Graphic courtesy: The Times of India, April 29, 2016

Finmeccanica’s position in India with reference to the Agusta controversy ; Graphic courtesy: The Times of India, April 28, 2016

AgustaWestland helicopters and India ; Graphic courtesy: The Times of India, April 27, 2016

The AgustaWestland helicopter deal of 2010, salient points; Graphic courtesy: The Times of India, April 27, 2016

[edit] In a nutshell

[edit] The seven salient points

Here is all you need to know about AgustaWestland case 10 Dec, 2016, The Times of India

In a stunning development [in Dec 2016], the CBI arrested former IAF chief Shashindra Pal Tyagi for allegedly taking bribes in the purchase of 12 helicopters from Anglo-Italian company AgustaWestland at a cost of Rs 3,546 crore in 2010. Here is all you need to know about the case:

1. WHAT THE DEAL WAS

12 AW-101 Agusta Westland choppers for IAF:

Eight to transport the President, PM, VP & other VVIPs.

Four for other duties:

• Choppers were to replace Mi-8 helicopters. IAF’s requirement came in 1999.

• In March 2002, a global tender floated. Four vendors responded but only Eurocopter EC-225 met specification of being able to fly at an operational ceiling of 6,000-metre. This was slashed in second tender in 2006 to 4,500.

• Finmeccanica beat S-92 Superhawk (US) to bag contract: In February 2010, 556 million Euro contract ( Rs 3,546 crore) with AgustaWestland inked.

2. WHAT WAS THE TWEAKING STORY

November-December 2003 | NSA Brajesh Mishra in Vajpayee PMO directed MoD & IAF to change tech specs to avoid “single vendor” situation. Tyagi was IAF chief when tech requirements (flying ceiling brought down to 4,500-metre, cabin height increased to 1.8-metre etc) changed between March 2005 & September 2006.

3. HOW THE SCANDAL BROKE

Feb 24, 2012 | Probe by Italy’s attorney general into shady dealings by Finmeccanica widened to include graft in Rs 3,500 crore chopper deal signed with India by subsidiary AugustaWestland.

• Middleman Guido Ralph Haschke, who allegedly pocketed 51 million euros from AgustaWestland to win contract, arrested.

Feb 2013 | Chief executive & chairman,Finmeccanica SpA, Giuseppe Orsi arrested, accused of paying Rs 360 crore bribe for choppers sale to India when he was AgustaWestland head.

4. HOW ITALIAN COURTS RULED

Oct 2014 | Lower court acquitted Tyagi, Orsi etc on charges of international corruption, but 2-year jail for Orsi & ex-company head for false invoicing.

• April 2016 | Milan’s Court of Appeals overturned verdict.

• Ruled Orsi & ex-head Spagnolini bribed Indian officials.

• Indicted Tyagi for being beneficiary of bribe (Payments made to Tyagi & family in cash and by wire transfer).

• Court said Indian government (UPA-II) did not provide adequate evidence & critical documents to Italian prosecutors in 2013-2014.

5. WHAT ITALIAN PROBE FOUND

• Orsi & others paid bribes through intermediaries (Haschke & co).

• Middlemen paid Tyagi through cousins to alter tender terms to aid AgustaWestland.

• In secret recordings, Haschke reportedly talked of money routed through Mauritius & Tunisia.

• Investigators acted on evidence of a former Finmeccanica executive Lorenzo Borgogni who claimed Haschke was hired as an ‘intermediary’ whose compensation was raised by Euro 10m to Euro 41.

6. HOW INDIA REACTED

• Then Defence Minister A K Antony ordered probe. Froze payments, having already paid Rs 1,620 crore, 45% of the contract value & accepting 3 choppers.

• CBI filed FIR against 13 in March 2013. ED too began probe. ED attached 5 properties of his cousins/ ED claimed bribes worth Rs 7.7 crore paid to Tyagi brothers.

7. DRAMATIS PERSONAE

Air Chief Marshal (retd) S P Tyagi 2004 to 2007 | Indicted in Italy, arrested in India. First ex-service chief to be arrested in India.

Guidi Haschke & Carlo Gerosa | Haschke, one of the two middlemen, arrested; accused of taking commissions from Agusta for him and biz partner.

Sanjeev Kumar (Julie) Tyagi Delhi-based businessman & ex-chief’s cousin, friend of Gerosa.

Giuseppe Orsi | ExFinmeccanica CEO-chairman, sentenced to 4-and-a-half years in jail.

Bruno Spagnolini Agusta Westland ex-CEO, sentenced to 4 years in jail.

Another middleman is CHRISTIAN MICHEL | A British consultant active in the Indian defence sector when scam was exposed, allegedly hired by Agusta to influence.

[edit] The case, in brief

The Times of India, May 8, 2016

FACES OF CONTROVERSY

From defence services chiefs to oily-palmed middlemen and eager lawyers, the drama about the purchase of 12 helicopters for VVIPs had an array of interesting characters

IN THE PILOT'S SEAT

Air Chief Marshal Shashindra Pal Tyagi (retd), popularly known in military circles as “Bundle Tyagi“ after his call-sign as a fighter pilot while flying Gnats, Hunters and Jaguars, finds himself caught right in the middle of the scandal. Though he retired as the IAF chief in March 2007, three years before the Rs 3,546 crore contract for the 12 AW-101 helicopters was actually inked, he is alleged to have played a piv otal role in tweaking the technical pa rameters in 2005 to ensure that it was the AW-101 chopper that bagged the contract in 2010.

It is also true that Tyagi alone could have not influenced or subverted the country's convoluted defence procurement process, which involves a host of officers, bureaucrats and, of course, politicians. However, a school of thought has it that he and his three cousins knew the decision to tweak the parameters had been taken on the file, and allegedly used that information to extract money from the vendor and the middlemen on the pretext that they would get their product selected.

Tyagi, of course, dismisses all such insinuations. “Do you seriously believe a service chief can swing a defence deal in our system?“ he remonstrates. “Two governments (NDA and UPA), two PMOs (A B Vajpayee and Manmohan Singh), two national security advisors (Brajesh Mishra and M K Narayanan) and two defence ministries ordered the IAF to change the technical parameters of the VVIP helicopters to avoid a single-vendor situation. We carried out the orders as per the requirements of the users -VVIPs and Special Protection Group.“

BROTHERS IN ARMS

Sanjeev (Julie), Rajeev (DoscaDoctor Sahib) and Sandeep were allegedly the three Tyagi men who mediated for their cousin S P Tyagi with the three key middlemen in the deal -Guido Haschke, Carlo Gerosa and Christian Michel -and Finmeccanica and AgustaWestland. From a humble beginning in the middle-class Patel Nagar in Delhi in the 1970s, when their father V K Tyagi was an official of the Press Information Bureau, the three brothers became big-time power-brokers and contractors over time, with offices and houses on posh Feroz Shah Road and in Sainik Farms. They also extensively tapped into political circles, both in BJP and Congress, to widen their clout in bagging government contracts.

Sanjeev Kumar `Julie' Tyagi, in particular, lived the high life with swanky cars and major investments in real estate.An old friend of Gerosa, Sanjeev first met Haschke at the wedding of Gerosa's daughter in Lugano in Italy , setting in motion events that eventually led to the scandal-ridden chopper transaction.

KICKED BY KICKBACKS

Earlier a consultant based in Lon don, James Christian Michel, now a Dubai resident, was the key middleman in the helicopter deal. He is alleged to have handled the pay ments of kickbacks of Rs 360 crore, pocketing some himself and using the rest to bribe Indian officials.

Much like his late father Wolfgang Richard Michel, who was known for extensive links in the Indian estab lishment and Congress party in the 1980s and'90s and for brokering deals with several leaders like Saddam Hussein and Muammar Gaddafi, Christian also had political connections in several countries, especially India.

Ever since the Italian court judgment in April 2016, Christian has been busy giving media interviews pleading that he is “a victim of political conspiracy“. Claiming he has never met any “Gandhi in my life“, he says he is ready to be questioned by CBI and ED, but will not come to India since he fears being arrested.

Christian is also the originator of the theory, which has since been strongly rejected by the NDA government, that Prime Minister Narendra Modi wanted to cut a marines-for-evidenceon-Sonia deal with his Italian counterpart, Matteo Renzi, in September 2015.

MORE THAN JUST CONSULTANTS

Guido Haschke, a Switzerlandbased Italian businessman, and his partner Carlo Gerosa worked closely with Italian conglomerate Finmeccanica and its UK-based subsidiary AgustaWestland as con sultants in executing projects in India for years.

Italian prosecutors have recorded conversations between the two, which include references to their friend Julie Tyagi. They are also heard dismissing Indian investigators as “morons“ who would not be able to pin them down since the kickbacks were routed through Mauritius and the transactions consisted mainly of cash payments.

Haschke's hand-written notes and account sheets, seized from his mother's home by Italian investigators in 2012, are crucial to unearthing who were the actual beneficiaries of the kickbacks.

APPROVING THE BRIBE FUND

Guiseppe Orsi, former CEO and chairman of defence manufacturing major Finmeccanica, worked with the company for years and was instrumental in the merger of Finmeccanica's Agusta and the British Westland Helicopters into AgustaWestland in 2001. Over the decades, he managed the chopper company's presence and sales in the international market. Orsi was arrested in Italy in February 2013, and on April 7 this year, he was handed a four-and-half year jail term for corruption. Allegedly on Orsi's directions, Euro 70 million (Rs 360 crore) were released to two sets of middlemen ­ Christian Michel (Euro 42 million) and the duo of Carlo Gerosa and Guido Ralph Haschke (Euro 28 million) ­ to be used to bribe Indian officials.

PRESIDING OVER A SCANDAL

Bruno Spagnolini, CEO of AgustaWest land till 2013, when he was arrested in rela tion to the Indian chopper deal, was charged with corruption by the Italian court on April 7 and sentenced to four years in jail. At the head of AgustaWest land since 2011, Spagnolini handled all the files related to the Indian purchase of 12 VVIP helicopters and allegedly finalised the bribe money in consultation with mid dlemen. He had once described India as one of most “promising markets“ and is known to have travelled to the country several times.

THE LEGAL CHANNEL

Among legal circles there were no raised eyebrows at the allegations lev elled against lawyer Gautam Khaitan. A managing partner in the law firm of O P Khaitan & Co, very few recall Khaitan junior appearing in court corridors. Most point out he is one of those advocates never to be spot ted in a courtroom arguing a case. Even in corporate legalities, Khaitan special ised less in litigation, more in mediat ing strategic mergers, acquisitions, joint ventures, structuring transactions and collaborations among multinational and Indian companies, banks and financial institutions. Old timers label Khaitan as belonging to the “Calcutta Group“ of lawyers who handled big matters emanating from traditionally important business houses of West Bengal such as the Birlas and Goenkas The Khaitans were a powercentre in Bengal three decades ago.P H Pareksh, senior advocate and ex-president of Supreme Court Bar Association, remarked, “I had shifted to the Supreme Court in 1969. At the time, Khaitan and Co was a big company headquartered in Calcutta with a branch in Delhi. They mostly dealt with cases of the Birla group. They were into a lot of litigation. In Delhi, the company mostly dealt with the Company Law Board and commercial tribunals.“

The company later broke up into four groups. O P Khaitan's law firm tried to establish itself as one that facilitated quick and smooth work for foreign firms looking to get a toehold in India. Khaitan stands accused of forming a chain of companies, like IDS Tunisia, along with Carlo Gerosa and Guido Haschke for routing the AgustaWestland bribe money to India. Investigators had recov ered a yellow dairy from his house that contained names in code of those who were paid the bribes. He was arrested in 2014 and chargesheeted.

[edit] The verdict

The Times of India, April 27, 2016

AgustaWestland deal, the deal ; Picture courtesy: The Times of India, April 27, 2016

The judgment of the Milan Court of Appeals in the VVIP chopper deal reveals a big nexus of middlemen and so-called defence consultants who had easy access to politicians, bureaucrats and military brass in India and Italy.

The order also shows that middlemen dropped names of politicians on both sides, suggesting influence up to the top, and their conviction that the right connections were essential in landing the deal.

The judgment lists taped conversations, handwritten notes by accused and statements to Italian prosecutors of European middlemen Christian Michel, Guido Haschke and Peter Hullet, the then India head of AgustaWestland.One handwritten note in particular provides an estimate of expenditure in paying In dian officials for swinging the Rs 3,600 crore deal in favour of AgustaWestland.

The handwritten note of Michel, using abbreviations for names of Indian officials and designations, says the IAF was allotted 6 million euros and the bureaucracy , including defence ministry officials, were to be allotted 8.4 million euros. The note differentiates the designation of bureaucrats like DG (acquisitions), defence secretary (DS) and joint secretary (JS).

Among others whom Mi chel spoke of in terms of making payments for a `share' of kickbacks include a category called `POL' (politicians) -where 3 million euros were earmarked for a person identified as `AP', while 15-16 million euros were shown against `FAM' (allegedly family of a top IAF officer).

The judgment also lists a conversation where Michel discusses Congress members.“As Mrs Gandhi is the driving force behind the VIP , she will not fly any more in the Mi-8 (the Russian-origin helicopters the President, PM and other VVIPs currently use),“ says the note. It identifies her “key advisers“ as “Manmohan Singh, Ahmed Patel, Pranab Mukherjee, M Veerappa Moily , Oscar Fernandes, M K Narayanan and Vinay Singh“.

Even though the trial didn't deal with corruption charge against IAF ex-chief S P Tyagi, it observed that his specific act of allegedly favouring AgustaWestland is contrary to his duty and constituted “wrongfulness of his conduct“ for cooperating with the company . The judgment listed details of meetings and conversations between AgustaWestland officials and Tyagi on several occasions, as produced by Italian prosecutors.

[edit] No proof that any politician took bribe: Italy judge

The Times of India, May 05 2016

No proof to link netas with bribes: Italy judge 

The Italian judge who delivered the verdict in the AgustaWestland chopper deal said on Wednesday that there was no “direct evidence“ linking any Indian politician with alleged kickbacks to swing the deal in favour of the Anglo-Italian firm.

Judge Marco Maria Maiga maintained that his verdict was only against senior officials of the company and middlemen who had paid bribes to some officials in India and that it was up to Indian sleuths to follow the money trail. “Identifying (Indian) individuals was not in for judgement for Italian courts,“ he said, adding that his order was based on documents which showed that the family of former IAF chief S P Tyagi received the money till April 2012.

Guido Haschke, Carlo Gerosa and middleman Christan Michel have been sentenced by the court.

Asked about the cooperation from Indian government as he had mentioned “substantial disinterest on clarification of facts in the case“ on behalf of Indian side, he said “all we had was a copy of the CAG, request for proposal and agreement copy .“

[edit] ACM Tyagi’s role

[edit] Had met middleman at farmhouse

The Times of India, Apr 28 2016

Tyagi had met dalal at Delhi farmhouse

Neeraj Chauhan

Former Indian Air Force Chief S P Tyagi, accused of swinging the Rs 3,600 crore VVIP chopper deal in favour of Anglo-Italian firm AgustaWestland, had admitted during his interrogation by the CBI in 2013 that he had met middleman Guido Ralph Haschke at a farm house party in Delhi. While denying having taken any bribe, Tyagi had told CBI sleuths that he had also met Haschke at least 5-6 more times later. Sources said that the former IAF chief 's cousins -Julie, Docsa and Sanjeev Tyagi -who are al so named in the case, were present at these meetings.

One or two meetings with Haschke had “formally taken place“ with S P Tyagi, said a senior CBI official.

CBI sources said details of the contract, among other aspects of the deal, were discussed at these meetings. Haschke is alleged to have passed on 20 million euros as bribe for the contract to S P Tyagi's cousins. The same details have be en confirmed in the probe of the Enforcement Directorate, which questioned the Tyagi cousins at length in 2014.

Asked about the party ,a senior official said, “We don't know whose party it was but Haschke was present and met S P Tyagi. There were reports that the farmhouse belonged to his cousins but we are yet to confirm that.“

Officials in the CBI and the ED said S P Tyagi was not supposed to meet middlemen for a defence contract but “he held 6-7 meetings for which we have strong evidence“.The Italian court order also talks about Haschke having met the Tyagis. When a CBI team went to Italy in 2013, Haschke confirmed to Indian officials about the meetings.

The CBI and the ED both have also established the “money trail“ in India which was sent through a web of companies and cash as well.

Sources said the CBI has probed the assets and investments of S P Tyagi and his cousins as part of the probe and financial details may figure in its final report.

TOI first reported on April 21 that the CBI had evidence of `corruption' charges in AgustaWestland deal on part of Indian officials on the basis of documents shared by Italy .

The CBI has booked 13 people, including S P Tyagi and Satish Bagrodia (brother of former minister Santosh Bagrodia), in an FIR registered earlier this week. It alleged that during the tenure of Tyagi and “with his approval“, the IAF “conceded to reduce the service ceiling for VVIP helicopters from 6,000 meters to 4,500 meters as mandatory to which it was opposing vehemently on the grounds of security constraints and other related reasons earlier“.

[edit] Christian Michel

The Times of India

Manu Pubby

Apr 27, 2016

VVIP chopper scam: Christian Michel - the man who flew away with Rs 330 crore

A large portion of the money paid by AgustaWestland to Michel is "completely disproportionate" to the work he did for the company — that's how the Milan Court of Appeals describes a man Indian investigators have been seeking. Interpol issued a red corner notice against Michel on India's request in December 2015.

Italian prosecutors had argued that Michel and Guido Hashke, a Swiss-Italian national, worked together to influence Indian officials to pick Agusta's choppers. Michel got plenty of attention in the court judgement, although Italian authorities had not cross-examined him. The court, which has held that the Agusta sale involved corruption, has devoted a full chapter to Michel in its judgement. Italian prosecutors alleged Michel was a key player in the VVIP chopper deal. Michel could not be contacted by ET. He had earlier issued statements on his willingness to cooperate with investigators in return for immunity from prosecution.

The Milan court has noted that Michel was paid over 44 million euros by AgustaWestland for various contracts, which included a deal to supply spare parts for Indian naval helicopters and a post-contract service deal for the VVIP chopper contract.

The judgement said the description of his work for the contracts — which included a 6 million euro post-service contract for VVIP choppers — was "vague" and "completely disproportionate to the large amount of fees paid to him". Michel had a 18.2 million euro contract to buy back discarded WG 30 choppers from India, a 6 million euro deal for servicing VVIP choppers and a 12 million euro contract to supply spares and parts for naval choppers.

The court said the servicing contract awarded by Agusta to Michel cannot be fully explained. "With respect to the 'postcontract award service agreement', the defence tried to enhance its relevance but it is sufficient to mention the results of investigations — even internal — which found that, against the large consideration agreed (euros 6,050,0000 total), it has produced only some periodic 'reports' (moreover, 'of poor quality') while none of the other commitments expected from the contract appears to have been fulfilled..." The court noted that an internal assessment of the group by PwC London had also raised doubts on these contracts. The judgement notes: "The doubts of the external auditors pertained to the opacity of the transaction (to buy back choppers), which it was suspected was hiding prohibited consultancies under the 'Integrity Pact', while about the second they had asked for clarification about its validity, since it was about Michel's companies' assistance in the phase of aircraft delivery, but although the aircraft had not yet been delivered (they would be only at the beginning of 2013) the payments had already begun".