VVIP chopper scam: India cancels Rs 3,600-crore deal with AgustaWestland

New Delhi –  India has cancelled the Rs. 3,600 crore VVIP chopper deal with British manufacturer AgustaWestland over allegations that it was riddled with kickbacks, sources in the Defence Ministry have told NDTV.

The cancellation came after a meeting between Defence Minister A K Antony with Prime Minister Manmohan Singh early this morning.

The 12-chopper deal was reportedly cancelled because of “violation of the pre-contract integrity pact,” sources in the Defence Ministry have said. The case may turn into a legal tangle for the government as three of the 12 helicopters have already been delivered to India and nearly one-third of the payment has been made.

In February 2013, India froze the deal with Agusta, which is owned by Italian defence manufacturer Finmeccanica. AgustaWestland has denied any wrongdoing but top executives of Finmeccanica are being investigated for paying bribes at home and abroad.

The Italian inquiry forced India to investigate the deal that was signed in 2010. As part of its probe, the Central Bureau of Investigation or CBI has alleged that former Air Force Chief SP Tyagi was among those who accepted bribes from Finmeccanica which used a maze of companies in counties like Mauritius to route payments to officers.

Air Chief Marshall Tyagi has rejected the allegations against him.