We will scrap the chopper deal if any wrongdoing is found: Antony

Grappling with yet another scandal involving bribery in the acquisition of expensive helicopters for use by VVIPs, the government today promised that the guilty would not be spared, even as former Air Chief S P Tyagi, whose name figures in the allegations, pleaded innocence.

A day after ordering the CBI probe, Defence Minister A K Antony told reporters that strong action will be taken against those found guilty. "Nobody will be spared whatever may be the consequences," he told reporters on the alleged Italian chopper scam.

The name of Tyagi has reportedly figured in the alleged scam, but he has stoutly refuted the bribery charge against him. Media reports have suggested that Tyagi was allegedly beneficiary in the kickbacks to the tune of 10 per cent of the Rs 3600 crore deal.

"I am innocent. These allegations are totally baseless and I am denying them categorically," he told reporters, while welcoming a probe into the "scandal", Tyagi said.

The former Air Chief, however, admitted that he had met Carlo, purportedly named as middleman in the Italian probe report, at his cousin's place. "But when you say you have contact with him, the answer is no. What connection could I have with him. The entire process of evaluation, trials, contracts etc took place in 2010," he said.

Another scam has unfolded with the arrest of the head of a state-controlled Italian aerospace company yesterday. The company is suspected of paying bribes of about Rs 362 crore in India to get orders for helicopters to ferry Indian VVIPs, prompting the government to order a CBI probe.

Antony said CBI has been asked to give an early report on its probe into alleged kickbacks in the AgustaWestland helicopter deal. "Once we get the preliminary inquiry report from CBI, strongest action will be taken against those found guilty," he said.

Asked about reports of the alleged role of Tyagi in the deal, the Minister said, "I have no information."

The Ministry of Defence also decided to put on hold the receipt of the remaining nine of the 12 helicopters. Giuseppe Orsi, the head of Italian defence and aerospace giant Finmeccanica, was arrested on Monday in relation to a probe into international corruption.

He is suspected of involvement in the payment of bribes regarding the sale to the Indian government of 12 helicopters produced by Finmeccanica's subsidiary AgustaWestland. The Defence Minister said, "After the CBI report, we will take serious action that may include cancelling the deal."

"We don't want to jump the gun. We can get our money back even at this stage," he said on the Rs 3600 crore deal. Asked whether the money paid to the Italian firm so far can be claimed back by the Indian government, Antony said, "If the Indian government paid any amount of the money, as per the provisions of the integrity pact, we can get back the entire money we paid to the vendor."

He mentioned that the Defence Procurement Procedure (DPP) governing all defence deals takes care of the integrity pact by the foreign vendors. "Not a single pie from the Indian government we will lose. As per the DPP, any contract beyond Rs 300 crores, before finalising the contract the vendor will have to sign an integrity pact with the Government of India, agreeing to our conditions. If they violate that condition, they are liable to criminal action," he said.

The Defence Minister said companies are liable to be prosecuted and blacklisted for their lapses. He referred to the actions taken by the government in such cases, where six foreign defence firms were blacklisted.

"I told you earlier that a CBI inquiry... after their first report, they recommended certain actions against companies. The moment we received the complaint, we did not hesitate, we blacklisted six companies. Out of that four are most powerful international companies," he said.

Antony stressed that tough action will be taken against the guilty, despite their stature. "We are not bothered about who the companies are, how strong they are and how influential they are. But everything depends on the CBI inquiry. The moment we get a report from the CBI, whoever is found guilty, Indian or foreigners, we will take strongest action against them. They will have to pay the price for their lapses," he said.