New Delhi Moves to Cancel AW101 Acquisition

India's ministry of defence has initiated steps to cancel its acquisition of 12 AgustaWestland AW101 helicopters, as it sends a senior representative to Rome to investigate bribery allegations surrounding the deal.

"[The ministry of defence] issued a formal show cause notice to AgustaWestland of the UK seeking cancellation of contract and taking other actions per the terms of the contract and integrity pact," the ministry said in a brief statement.

The company has until 22 February to respond, it adds. New Delhi suspended payments to the manufacturer on 13 February.

It also announced that a senior joint secretary, Shri Bal, has been dispatched to Rome to investigate the case, in which Finmeccanica chief executive Giuseppe Orsi was detained by Italian police on 12 February, and AgustaWestland chief executive Bruno Spagnolini was placed under house arrest. No charges have been brought and both deny any wrongdoing.

Orsi headed AgustaWestland at the time when the €560 million ($746 million) deal was signed in February 2010.

So far, three of the AW101s with VIP roles have been delivered to India, with the balance to be handed over by the end of 2013.

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