Former Indian Air Force Chief Formally Charged in AgustaWestland Chopper Bribery Case

India’s Central Bureau of Investigation (CBI) on Friday filed charges against former Indian Air Force chief SP Tyagi and nine others in the AgustaWestland VVIP helicopter bribery case.

He was earlier arrested in connection with this case last year and granted bail.

Besides 71-year-old Tyagi, the CBI has named nine others, including his cousin Sanjeev, retired Vice-Chief of Air Staff Air Marshal JS Gujral, advocate Gautam Khaitan and Michel James, the alleged UK based middleman in the Rs 3,600-crore (US$550 million) deal for 12 VVIP helicopters signed in 2010.

The scandal broke out in Italy in 2013 and a CBI probe was ordered here following allegations that more than Rs 360 crore ($55 million) were paid as bribe to Indian officials and international middlemen, Pioneer newspaper reported. 

The contract was later cancelled for breach of pre-contract integrity pact which bars commissions, bribes or middlemen. The helicopters are manufactured by AgustaWestland, a UK-based subsidiary of Italian conglomerate Finmeccanica.  AgustaWestland had delivered three helicopters to the IAF before the contract was cancelled which are lying unused in Delhi.

The Indian Government recovered more than Rs 2,000 crore which was the entire amount paid as per the contract terms if the integrity pact was breached. 

The chargesheet on Friday was filed before Special CBI Judge Arvind Kumar in Delhi and the court fixed September 6 for arguments, when the CBI is likely to file more documents and annexures.

The CBI has booked all the accused under the provisions of the IPC relating to cheating and criminal conspiracy and the Prevention of Corruption Act. Others named in the chargesheet include alleged European middlemen in the deal, Carlo Gerosa and Guido Haschke. The FIR also names former AgustaWestland CEO Bruno Spagnolini, former Finmeccanica Chairman Giuseppe Orsi and the Anglo-Italian company, AgustaWestland, as accused in the case.

The investigating agency alleged that during his tenure as IAF chief from 2004 to 2007, Tyagi and, with his approval the IAF, conceded to reduce the service ceiling for VVIP helicopters from 6,000 metres to 4,500 metres as mandatory. Security agencies and the IAF had earlier opposed lowering the ceiling on the grounds of security constraints and other reasons.

The CBI has claimed that the reduction of the service ceiling, or the maximum height at which a helicopter can perform normally, allowed AgustaWestland to come into the fray as, otherwise, its helicopters were not qualified for submission of the bids.

It also alleged that AgustaWestland had managed to introduce a comparative flight trial with non-functional engines and eventually succeeded in getting the contract for supply of 12 AW-101 VVIP helicopters from the Defence Ministry, mainly due to softening of the IAF on the service ceiling issue after Tyagi took over as its chief. The agency has alleged that there was an estimated loss of Euros 398.21 million (approximately Rs 2,666 crore) to the exchequer in the deal for supply of VVIP helicopters worth Euros 556.262 million.

The CBI, in its chargesheet, has informed the court that it has been able to establish a money trail worth Euro 62 million (Rs 415.40 crore) from countries like Mauritius, Singapore, the UAE, Tunisia, the UK and the British Virgin Island.

It has alleged that the illegal gratification was brought into India under the guise of several consultant contracts of the European company with a group of shell companies created by Khaitan. The contracts were only “subterfuge” and a mere mode to transfer the illegal gratification for payment to the public servants, the CBI claimed in its chargesheet.