UK considers corruption probe into helicopter deal with India

Philip Hammond ‘not aware’ of request for UK help with India’s ‘bribery’ investigation

By David Pallister and David Hencke | 9 June 2014

“I am not aware of any request from the Indian Ministry of Defence for help about this”
– Philip Hammond, defence secretary

Helicopter maker AgustaWestland faces the prospect of a criminal investigation in the UK over a huge contract with India.

UK officials say that they are monitoring a corruption trial in Italy “carefully” to see whether any evidence warrants a British investigation.

Meanwhile, Philip Hammond, defence secretary, revealed to Exaro that he was unaware of a formal request by the Indian authorities to the UK government for help over a criminal investigation into the contract.

Two former chief executives of AgustaWestland, the Anglo-Italian helicopter company, are on trial in Italy over bribery claims.

They and the company deny wrongdoing.

AgustaWestland, a subsidiary of Italian-based Finmeccanica, won a €560 million deal in 2010 to supply 12 AW101 helicopters to the Indian Air Force. The helicopters were being made at the site of Westland Helicopters, a predecessor company to AgustaWestland, in Yeovil, Somerset.

The Indian government cancelled the contract in January amid the bribery allegations.

In April, Italian prosecutors agreed a ‘plea bargain’ with a middleman, Guido Haschke, who they accused of bribing Indian officials to help secure the contract.

In addition, transcripts of bugged telephone conversations shed light on the role of a British businessman, Christian Michel, as a middleman in the contract.

A spokesman for the Foreign Office told Exaro that officials were actively studying the evidence from the trial in the industrial city of Buston Arsizio, near Milan in the light of the UK’s anti-bribery law.

The spokesman said: “The UK has not launched an investigation, but, as AgustaWestland is subject to the UK Bribery Act, the UK government is monitoring proceedings in Italy carefully. Until that trial has completed, it would be inappropriate to speculate further.”

The Serious Fraud Office (SFO) can prosecute cases under the Bribery Act.

An SFO spokesman said: “While the SFO is aware of the Indian government’s investigation into AgustaWestland, it would be inappropriate to comment further until it is concluded.”

Exaro revealed in March that the UK government helped AgustaWestland win the helicopter contract.

The disclosure undermined efforts by David Cameron, prime minister, to distance the UK from the corruption allegations. Exaro revealed last year that the UK was failing to help India with its investigation, despite promises by Cameron.

And a key UK diplomat who helped secure the deal went on to become chief executive and managing director of AgustaWestland India.

Asked about the contract by Exaro at a Press Gallery lunch last month, Hammond said: “I am not aware of any request from the Indian Ministry of Defence for help about this, but I will check to see whether this is correct.”

He added: “As I understand, the court case is about recovering money [by AgustaWestland] after the contract was cancelled by the Indian government.”

In fact, India’s Ministry of External Affairs (MEA) made the formal request for assistance from the UK government in 2012.

India’s then defence minister, AK Anthony, reported to the country’s parliament that his government made the request because AgustaWestland is a UK-based company. In addition, he said, an alleged middleman is British.

In a parliamentary written answer, Anthony continued: “MEA has also been requested to take up the matter with the government of the UK, as well as requesting its co-operation in verifying the allegations, and helping us by providing relevant information relating to the alleged involvement of a middleman and/or of any Indian individual/entity.”

In comments to Exaro last May, a spokesman for the Foreign Office accepted that it had received a request for help from India over the case. The spokesman also reiterated Cameron’s commitment to co-operate with Indian investigations.

A spokesman for Hammond said that he had nothing to add to his previous response.

Related Story : Bribery claims, ‘Sangcom’ and ‘Al Yamamah’: Exaro story thread

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