India puts controversial $ 750 m Italian helicopter deal on hold

Updated 15 February 2013
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India puts controversial $ 750 m Italian helicopter deal on hold

NEW DELHI: India’s Defense Ministry said yesterday that it has put a $ 750 million contract to purchase helicopters from Italian company Finmeccanica on hold amid allegations that bribes were paid to obtain it.
The ministry said 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 notice.
“With today’s show cause notice, the operation of the contract has been put on hold. The company has been asked to reply to the notice in seven days,” the ministry said in a statement.
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 obtain the contract.
Giuseppe Orsi, CEO of Finmeccanica, and Bruno Spagnolini, chief of AgustaWestland, are being investigated on corruption charges involving business done in India.
Orsi yesterday formally submitted his resignation as CEO of the company. In his letter to the Finmeccanica board, Orsi denied wrongdoing, saying he always worked “for the exclusive interest of Finmeccanica and its subsidiaries.”
The Finmeccanica board named its chief operating and financial officer, Alessandro Pansa, as interim CEO until a board meeting can be held in April. It also named a new vice chairman.
Indian Defense Ministry officials have said the contract 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.
The Defense Ministry had already put on hold the delivery of the remaining nine helicopters.
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.
This is not the first time that a defense deal in India has been mired in allegations that a company paid millions of dollars in kickbacks to Indian officials.
In the 1980s, then-Prime Minister Rajiv Gandhi’s government collapsed over charges that the Swedish gun manufacturer Bofors AB paid bribes to supply Howitzer field guns to the Indian army.
Following the Bofors scandal, India banned middlemen in all defense deals.
From 2007 to 2011, Finmeccanica won an average of 250 million euros ($ 334 million) per year in orders from the Indian government, and aimed to double that by 2015. Analysts say that ambition could be jeopardized if the current allegations prove to be true.
Orsi took over the post of CEO in May 2011 from Pier Francesco Guarguaglini, who in December of that year also ceded the chairmanship to Orsi under government pressure due to allegations of a slush fund. That investigation has since been closed without charges.
Orsi, who was jailed on Tuesday, was being questioned by prosecutors north of Milan. The CEO of AgustaWestland is under house arrest.


I could have done a lot more for Pakistan but was prevented by Musharraf, says Dr. A.Q. Khan

Updated 24 min 35 sec ago
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I could have done a lot more for Pakistan but was prevented by Musharraf, says Dr. A.Q. Khan

  • India and Pakistan could live together in peace and harmony 'if the Kashmir problem is solved amicably,' says Pakistan's top nuclear scientist
  • The safety and security system put in place by Pakistan’s Strategic Plans Division is 'failsafe'

DUBAI: “All the Western countries are against any Muslim country having a nuclear capacity,” said Pakistan’s former nuclear scientist — popularly known as the ‘father’ of Pakistan’s atomic bomb — in an exclusive interview with Arab News.
“Never do you hear a word said about Israel’s nuclear program,” he said.
International community keeps raising concerns over the safety of the country’s nuclear arsenal.
“The safety and security system which has been put in place by the SPD (Strategic Plans Division) is failsafe,” said Dr. Khan, in a reply to questions sent to him by email.
Dr. Khan stressed that Pakistan has “no evil designs against any country” and that the country’s nukes are purely for “self-defense” and deterrence, adding that in case of an aggression “there will be no concessions from Pakistan.”
Advocating Pakistan’s nuclear ambition, Dr. Khan said, “It has definitely protected Pakistan, not only from an aggressive India, but also from (foreign) adventurists.”
“We all know what happened to non-nuclear Pakistan in 1971. Since the early 1980s the world was aware that we had a nuclear program and neither India nor any other country has dared to touch us ... I gave Pakistan the capability of hitting back if it was attacked making any misadventure on the part of India fatal for both countries,” he said.
The two countries could live together in peace and harmony “if the Kashmir problem is solved amicably,” he said.
As Pakistan heads toward the general election next month (July 25), Dr. Khan said that he has no political plans.
Dr. Khan dissolved his political party, Tahreek-e-Tahaffuz-e-Pakistan (Movement for the Protection of Pakistan), after the 2013 election. “The formation of that party was at the insistence of many people and I gave them the opportunity to try. However, there were no good results.”
“Politics in Pakistan requires rolling banknotes,” he said.
On Wednesday, the Election Commission of Pakistan made public the assets of main electoral candidates in the 2018 elections, figures that have shown rich political leaders living lavish lifestyle.
Pakistan problems are caused by the “corrupt system and political inabilities” where leaders had most of their wealth stashed abroad and “little interest in safeguarding national interests,” Dr. Khan said.
“See how Gen. Musharraf, a military dictator, sold this country’s sovereignty to the West at a simple phone call from the US. For that, we have paid, and are still paying, a very heavy price.”
Dr. Khan alleged that he was sacked by Musharraf on a US whim at a time when he could have done much more for Pakistan.
“… Read what Chaudhry Shujaat Husain has said about that episode in his autobiography.” He said Musharraf “neutralized” him (Dr. A.Q. Khan) because President Bush wanted him to do so. “The country suffered because of it.”
In January 2004, Dr. Khan was summoned by the government for a debriefing on his alleged role in nuclear weapons technology proliferation after the US shared evidence with Pakistan. He confessed to the charges a month later and was put under official house arrest. He was released as a free man on Feb. 6, 2009, by the Islamabad High Court (IHC).
“I could have done a lot more for Pakistan in the years after my retirement but was prevented from doing so by him (Musharraf). Now he himself is in disgrace while the nation still honors me,” said the 83-year old former nuclear physicist, recalling his sacking.
Dr. Khan, who visited North Korea before under a missile program mission by Pakistan, believes that the recent Trump-Kim summit in Singapore will not definitely lead to Pyongyang’s denuclearization. “North Koreans are very pragmatic,” he said.
“As long as US troops are in Japan and South Korea, North Korea will not freeze or abandon its nuclear program.”
Both the US and North Korea are trying to get the best out of the situation — President Trump looking for a Nobel Prize for Peace and the North Korean President recognition as a world leader, he said.