In Feb 2010, the Congress-led UPA government signed a contract with UK-based AgustaWestland to buy 12 AW101 helicopters for the Indian Air Force for Rs 3,600 crore. The choppers were to fly VVIPs, including the president, prime minister among others.
However, the government cancelled the deal later, after Bruno Spagnolin, CEO of AgustaWestland and Guiseppe Orsi, chairman of the Italian parent company Finmeccanica, were arrested on charges of bribing middlemen to acquire the deal with IAF. Then defense minister AK Anthony had ordered a probe into the matter. “Yes, corruption has taken place on the helicopter deal and bribes have been taken. The CBI is pursuing the case very vigorously,” Anthony had said in March 2013.
Early in 2014, the Italian court investigating the chopper scam had named former chief of the IAF, SP Tyagi in the scam, saying he was bribed by Finmeccanica to sign the deal with AgustaWestland. In 201, however Tyagi was acquitted by the Italian court, which said there was no corruption by Indian officials.
The IAF had urged the defense ministry to purchase helicopters capable of flying in high-altitude areas like Siachen and Tiger Hill. After careful evaluation of the AW101, it was ascertained that it was not capable of flying at 6,000 meters above sea level. The alleged middleman in the deal, Guido Haschke, revealed that while AW101 did not meet the technical requirement of the IAF, the deal was signed after Haschke tweaked the contract with the help of his Indian contracts.
AgustaWestland allegedly paid € 30 million in bribes, of which €20 million was routed Haschke and Carlo Gerosa. A CBI report that came in later said that prior to Tyagi’s appointment as Air Force Chief, the IAF had “vehemently opposed” lowering of the altitude requirement. This changed after Tyagi came into the picture and the IAF conceded to reduce altitude requirements, allowing AgustaWestland to re-enter the bidding process.
The Milan Court of Appeals again mentioned Tyagi’s name while pronouncing its judgement. “In the absence of contrary indications, it must be concluded that the reward bestowed to Tyagi’s family for their work in support of AW in relation to the race of the Government of India for military helicopters amount of €10,500,000.”