New Delhi cancels "with immediate effect" a US$ 753 million deal with AgustaWestland, a company owned by the Italian aerospace giant. For more than a year, Finmeccanica, AgustaWestland's parent company, has been involved in a bribery and tax fraud investigation.

New Delhi (AsiaNews) - India cancelled a US$ 753 million deal for 12 luxury helicopters with Italian defence giant Finmeccanica, India's Defence Ministry announced.

The decision had "immediate effect" because AgustaWestland, an Anglo-Italian company owned by Finmeccanica, had breached "the pre-contract integrity pact (PCIP) and the agreement".

The Defence Ministry nominated an arbitrator after AgustaWestland appointed one already, pressing for arbitration.

The Indian government had already stopped payments to Finmeccanica on 14 February 2012 after the arrest of its President Giuseppe Orsi.

According to Italian prosecutors, the company paid bribes to sell 12 AW-101 helicopters, used to transport VIPs.

The Anglo-Italian company has always denied any breach of contract and rejected allegations of corruption. For this reason, it called on India to accept international arbitration to vet the cancellation of the contract.

According to some analysts, New Delhi decided to scrap the deal in order to avoid accusations of corruption ahead of upcoming general elections.

In recent years, the ruling Congress party has come under close scrutiny for a series of scandals involving bribery, which have put a strain on the stability and credibility of the government led by Prime Minister Manmohan Singh.

• india
• italy
• finmeccanica
• agustawesland
• scandal