AgustaWestland to present case to defence ministry Wednesday

AgustaWestland is expected to present its case to the defence ministry officials Wednesday following show-cause notice to cancel the controversial deal of supplying 12 VVIP helicopters to the Indian Air Force (IAF).

The defence ministry had earlier this month extended by 15 days the deadline set for AgustaWestland, the UK-based subsidiary of Italian conglomerate Finmeccanica, to reply to the final show-cause notice for deal cancellation.

Sources said defence ministry had Oct 21 issued final show-cause notice to AgustaWestland, giving it 21 days to file its reply. The company had asked for some more time and an opportunity to present its case.

They said that AgustaWestland was asked to present its case to the ministry Nov 20 and to give a written reply to the show-cause notice by Nov 26 regarding the Rs.3,727-crore contract.

"There is hearing on this issue tomorrow (Wednesday)," an official said.

He said any decision on cancellation of deal will be taken only after Nov 26.

Defence Minister A.K. Antony has already said the company has violated the contractual obligations.

Sources said the ministry has asked AgustaWestland why actions, including cancellation of contract, should not be invoked for "violation" of the terms of the pre-integrity pact.

The ministry has already frozen the contract after allegations of kickbacks against top officials of the Anglo-Italian firm.

The ministry had concluded a contract with AgustaWestland in February 2010 for supply of 12 AW-101 helicopters at a price of euros 556.262 million (Rs.3,726.96 crore). The helicopters were for the IAF's elite Communication Squadron, which ferries the president, prime minister and other VVIPs.

The Comptroller and Auditor General also slammed the defence ministry and the IAF for deviations from procedures in procurement of the choppers in the AgustaWestland deal.