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Aerospace / Defense / Security
Farnborough, Hampshire, United Kingdom
Nationality of Foreign Officials: Algeria
Summary of Allegations:
Between 2009 and 2011, AgustaWestland allegedly engaged in corruptive activities in the process of securing a public tender of supplying helicopters to Algeria government.
Approximate Alleged Payments to Foreign Officials: Unspecified.
Business Advantage Allegedly Obtained: Government contract
Nationality of Foreign Officials: India
Summary of Allegations:
AgustaWestland was formed in July 2000 when Finmeccanica and GKN Aerospace ("GKN") merged their respective helicopter subsidiaries (Agusta and Westland Helicopters) to form AgustaWestland, with each holding a 50% share. Finmeccanica acquired GKN's stake in AgustaWestland in 2004.
On 2 April 2013, Reuters reported that Italian investigators uncovered allegations of bribery surrounding AgustaWestland and a tender for 197 light reconnaissance helicopters in India. The allegations are that an Indian army brigadier requested USD 5 million in exchange for helping AgustaWestland win the tender. The Indian government has delayed a final decision on the tender due to the allegations, and AgustaWestland did not succeed in making the short list for the tender. The article stated that it is unknown whether any bribes were paid.
Separately, a former Indian Air Force chief, SP Tyagi, allegedly received a bribe from AgustaWestland as part of a USD 581.9 million deal for 12 AW-101 helicopters. Indian authorities suspect that the bribe money was transferred to RK Nanda then paid by a UAE middleman Christian Michel to Gautam Khaitan and Sanjeev Tyagi, who provided the funds to SP Tyagi. Altogether, approximately USD 63.9 million allegedly was paid in bribes by AgustaWestland to Indian officials.
Christian Michel allegedly received about $35 million for his role as the middleman of the above deal, and was requested to be extradited from the UAE to India.
Approximate Alleged Payments to Foreign Officials: request by Indian army brigadier for USD 5 million
Business Advantage Allegedly Obtained: Contract for 197 light reconnaissance helicopters
Nationality of Foreign Officials: South Korea
Summary of Allegations:
In 2012, AugustaWestland participated in South Korea's naval chopper purchase program, worth about 1.3 trillion won (USD 1.1. billion). AgustaWestland hired Kim Yang, former head of South Korea's Ministry of Patriots and Veterans Affairs, allegedly to peddle influence to decision makers so that the purchase decision would be made in a way favorable to AugustaWestland.
In 2013, AugustaWestland won the bid and South Korea placed orders for eight AgustaWestland's AW159 Lynx Wildcats, a search and rescue, anti-surface warfare and anti-submarine helicopter. The deal between the Korean Navy and AgustaWestland was arranged by Ham, Tae-heon, a Korean-American arms dealer.
A senior South Korean Navy official, in charge of the Navy's budget and acquisition during this time, identified only by his surname park allegedly pressed his subordinates to doctor a report on the operational capability of the AgustaWestland AW 159 Wildcat. The evaluation was allegedly made before the helicopter had even been produced. During Park's interrogation, Park alleged that he was following orders from the retired Admiral Choi, Yoon-hee, former chairman of the Joint Chiefs of Staff. Choi allegedly knowingly approved the forged documents about the helicopters' operational capabilities. Choi, his wife and son allegedly took bribes from Ham, including receipt of 20 million won, 15 million won of which was later returned, from Ham by Choi's son.
Approximate Alleged Payments to Foreign Officials: 60 million won (15 million won returned)
Business Advantage Allegedly Obtained: won bidding for 1.3 trillion won (USD 1.1 billion) deal in 2012 for eight AugustaWestland's AW159 Lynx Wildcats (maritime helicopters) providing favorable review of weapons components manufactured by AugustaWestland
Agencies: Algeria: unspecified
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
Algeria authorities were probing AgustaWestland's contract of supplying helicopters to Algeria gov between 2009 and 2011.
Agencies: India: Central Bureau of Investigation
Results: Suspension/Debarment
Year Resolved: 2014
Compliance Monitor: N/A
Ongoing: No
Details:
In October 2013, India suspended the contract to supply 12 luxury VVIP choppers after Italian investigators began looking into allegations that AgustaWestland paid bribes to win the contract. India issued a final show cause notice to AgustaWestland, demanding reasons that action should not be taken against it for violating the terms of the mandatory integrity pact that was signed by all defense suppliers to India. On 20 November 2013, AgustaWestland met with Indian defense officials to discuss the suspension of its EU 556 million (approximately USD 754 million) deal to supply helicopters in light of the corruption charges.
On 1 January 2014, India canceled the USD 754 million contract to buy helicopters from AgustaWestland reasoning that the company violated the pre-contract integrity pact that prevented the company from engaging middlemen or any corrupt practice to obtain the tender. AgustaWestland agreed on a 7.5 million-euro settlement with the court in 2014.
Agencies: India: Central Bureau of Investigation, India: Enforcement Directorate
Results: Prosecution of Individuals, Prosecution of Public Officials
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
A money laundering investigation into the AgustaWestland VVIP chopper deal has been commenced by the Enforcement Directorate ("ED"), India's financial probe agency. In November 2014, the ED charged Delhi-based businessman Gautam Khaitan under the Prevention of Money Laundering Act ("PMLA"). In the charge sheet, the ED alleged that Khaitan was instrumental in setting up shell companies on behalf of Italian middlemen for the deal, Guido Hashke and Carlo Gerosa.
In tracing the Rs 160 crore AgustaWestland allegedly paid to Guido Haschke, the ED found that although some were used for a contract to develop software, a major part of the funds were repatriated to India after passing through shell companies based in Mauritius and Tunisia as foreign direct investment.
On 2 May 2016, the CBI begin their questioning of the former IAF Chief S P Tyagi and Guido Khaitan. Khaitan reportedly admitted to his part in setting up the shell companies to route bribe payments. S P Tyagi also reportedly has denied allegations that he reduced flying ceiling of the helicopter from 6,000m to 4,500m (15,000ft), allowing AgustaWestland to qualify for submission of bids, and indicated that the change of specifications was a collective decision by the senior officers of Indian Air Force, and other involved parties. The ED has also reportedly questioned Tyagi's cousins and realty firm Emaar MGF's boss Shravan Gupta in the matter.
In addition, the ED is also investigating into 30 millions euros paid by AgustaWestland to Christian Michel James allegedly to win the deal.
In April 2016, the CBI approached External Affairs Ministry seeking help of diplomatic channels to get a copy of the order issued by Milan Courts of Appeal in the Finmeccanica case. The CBI reportedly completed its domestic investigation but pending judicial requests sent to eight countries, including the United Kingdom. The government of India has approached the government of the United Kingdom for extradition of Christian Mitchel James, British consultant alleged to be a key intermediary who managed political parties and players in Italy and India as part of the deal.
In May 2016, Christian Mitchel's driver, Narayan Bahadur, was questioned over multiple days by the ED.
On 3 June 2016, ED conducted searches on the premises of a Delhi-based businessman, alleged to be a contact of Christian Mitchel, in connection with the money laundering probe in the VVIP chopper deal. The businessman had failed to comply with summons issued to him to present himself before ED investigators in the previous week regarding his involvement in creating an overseas firm with Christian Mitchel along with his daughter and others.
On 15 June 2016, ED filed a fresh chargesheet detailing the role of Christian Mitchel in the deal, his multiple visits to India and his transactions. The chargesheet against Christian Mitchel was reportedly filed to support request for his extradition from the UK.
In July 2016, a two-member team of CBI's Special Investigation Team ("SIT") visited Italy for four days to meet the Italian prosecutors and the police officers who were involved in the investigations for further details. At the same time, another two-member team of the SIT met with the Swiss authorities on the issue of expeditious execution. In September 2016, SIT members also met with the authorities in Mauritius to probe the alleged bribe trail.
On 9 December 2016, the CBI arrested former Indian Air Force chief S P Tyagi and two other individuals, Gautam Khaitan and Sanjeev Tyagi, in connection with the allegations that they had accepted the illegal gratification for exercising influence through corrupt or illegal means. The Tyagi brothers are accused receiving bribes in exchange for reducing the height of the VVIP helicopters, and otherwise tweaking the technical requirements of the tender, so that AgustaWestland could get included in the bids. Khaitan is accused of being the key middleman in the money laundering scheme that facilitated the bribe money through a maze of companies. Following the arrest, S P Tyagi stated that the procurement of chopper deal was a collective decision and denied any wrongdoing.
On 15 December 2016, the CBI, while requesting for seven-days custody of S P Tyagi, Gautam Khaitan and Sanjeev Tyagi, informed the court in Delhi that Letters Rogatory were sent to Tunisia, Italy, Dubai, the UK and Mauritius. In addition, the CBI has already received evidences from Italy, Mauritius, the UK and Switzerland to date. As part of the evidence received, the CBI disclosed some details on alleged involvement in the bribery scheme by the Tyagi brothers and payment methods. The court of Special CBI Judge Arvind Kumar granted the agency three more days custody of the three individuals, extending the custody until 17 December 2016.
On 10 January 2017, the Delhi High Court issued notice to Sanjeev Tyagi on CBI's plea challenging the bail granted to him. The court is scheduled to hear plea against is scheduled for 18 January 2017.
On 1 September 2017, the CBI filed corruption charges against S P Tyagi and nine others including Finmeccanica and AgustaWestland officials.
08 Jan 2018: India CBI said that Italy's acquittal of Orsi and Spagnolini will have no bearing on the case in India.
19 November 2018, the CBI's request to extradite Christian Michel was confirmed and upheld by a Dubai court.
4 December 2018, the CBI extradited Christian Michel from the UAE to face prosecutions in India.
Agencies: Italy: Public Prosecutor's Office of L'Aqulia, Italy: Public Prosecutor's Office of Naples, Italy: Public Prosecutor's Office of Rome, Italy: Milan Public Prosecutor's Office
Results: Acquittal/Dismissal
Year Resolved: 2014
Compliance Monitor:
Ongoing: No
Details:
As of 19 December 2013, two former AgustaWestland chief executives were on trial in Italy following investigations there and in India into the alleged use of bribes to win the contract of VVIP choppers with the Indian defense ministry.
In 2014, the 2 officials were cleared on charges of committing international corruption but were convicted of false invoicing in relation to bribes exchanged for the contract with India. Each was sentenced to jail time (Giuseppe Orsi to 4.5 years and Bruno Spagnolini for 4 years). Both Orsi and Spagnolini appealed the conviction and the prosecution appealed against the acquittal on the corruption charge. The public prosecutor dismissed all ongoing process against AgustaWestland. AgustaWestland entered into a settlement with the Italian Court of Busto Arsizio.
Dec. 2016: Italian Supreme Court of Cassation ordered a repeat of the appeals trial.
08 January 2018: Milan's third court of appeal acquitted the officials -- Giuseppe Orsi and Bruno Spagnolini - of charges related to alleged bribes to sell helicopters to India.
Agencies: Korea: Prosecution Service
Results: Conviction, Prosecution of Individuals
Year Resolved: 2016
Compliance Monitor:
Ongoing: No
Details:
On 5 June 2015, Park was arrested following South Korean military court's issuance of his arrest warrant on charge of pressing his subordinates to doctor a report on the operational capability of the AgustaWestland AW159 Wildcat, a multi-mission maritime helicopter, in 2012.
On 24 November 2015, retired admiral Choi was questioned about the allegations that he and members of his family took bribes from Ham in relation to the 2012 AgustaWestland deal. Choi's wife and son were separately questioned, in which Choi's wife denied the allegations entirely and his son maintained that the money had nothing to do with Choi but he had borrowed it for his own business.
Early November 2015, South Korean prosecution reportedly asked the U.S. Department of Justice ("DOJ") and the Federal Bureau of Investigation ("FBI") to provide bank records of Ham, a Korean-American. In addition, the prosecution reportedly plans to seek an arrest warrant for Ham for the second time as the initial attempt to do so was rejected by the local court due to lack of evidence.
On 11 January 2016, the Seoul Central District Court convicted Kim Yang of lobbying senior military officers to pick the Anglo-Italian AW159 Wildcat as the country's new multi-mission maritime helicopter, while receiving some 1.4 billion won (USD 1.15 million) from the helicopter manufacturer from 2011 and 2014. The court ordered Kim to forfeit 1.38 billion won and sentenced him to four years in prison. Kim had argued that the money he received was legitimate wages according to the contract as the company's adviser.
Agencies: Panama: Unspecified
Results: Declination
Year Resolved: 2017
Compliance Monitor:
Ongoing: No
Details:
On 21 September 2017, a Panama court decided not to prosecute Agustawestland and closed the case.
Discovery Method: Unspecified
Details:
Country: