India probes kickbacks in Finmeccanica deal - source

Italy has not shared details of a corruption probe into the sale of helicopters to the Indian government, the Indian foreign ministry said on Tuesday, after the arrest of Finmeccanica's head Giuseppe Orsi in Italy.

"We had asked the government of Italy through our mission in Rome for details of the investigation but were told that it is a judicial process and the government of Italy is unable to share any information," foreign ministry spokesman Syed Akbaruddin said. "That remains the position even today."

India's defence ministry said it could not immediately comment.
Italian police arrested the head of Italian state-controlled defence group Finmeccanica SpA today in a corruption probe centred on the sale of helicopters to the Indian government, a judicial source said.

Finmeccanica Chief Executive and Chairman Giuseppe Orsi was arrested for alleged bribes paid to secure the sale of 12 AgustaWestland executive aircraft when he was head of the Finmeccanica helicopter unit, the source said.

Police were searching the defence contractor's offices in Italy's financial capital Milan, police sources said.

Highlighting the political sensitivity of the case less than two weeks before elections, Italian Prime Minister Mario Monti said the Italian government would deal with management issues at the company.

"There is a problem with the governance of Finmeccanica at the moment and we will face up to it," Monti told RAI state television.

In a brief statement, Finmeccanica expressed its support for Orsi and said it hoped his legal position could be clarified as soon as possible. Its business was operating as normal in the meantime, the company added.

The Italian business world has been shaken in recent weeks by a series of corruption cases, notably a derivatives scandal at Banca Monte dei Paschi and an alleged bribery case involving oil service group Saipem.

The latest series of scandals have become an issue in Italy's campaign for parliamentary elections to be held on Feb. 24 to 25.

NORTHERN LEAGUE BACKING

Orsi's appointment to lead the defence group in May 2011 was backed by the Northern League party, at the time an ally of then Prime Minister Silvio Berlusconi.

Centre-left politicians had called for Orsi to step down when he was first targeted in the corruption probe. Orsi, a long-serving defence industry executive, has denied wrongdoing.

The first helicopters, for use by India's political leaders, were due to be delivered by December 2012 after a 560 million euro ($749.2 million) contract was awarded in 2010.

The source said three other people had been placed under house arrest as part of the probe, including the chief executive of AgustaWestland, Bruno Spagnolini.

Orsi, CEO at Finmeccanica since 2011, has been steering the loss-making company through a restructuring. Finmeccanica, around 30 percent owned by the Italian state, has said it has always done business in India through official channels.