Finmeccanica head arrested over India bribe allegations
By Emilio Parodi and Danilo Masoni
BUSTO ARSIZIO, Italy (Reuters) - Italian police arrested the head of defense group Finmeccanica SpA (SIFI.MI: Quote) on Tuesday on a warrant alleging that he paid bribes to win an Indian contract, adding to a wave of corporate scandals shaking Italy before a general election.
Prosecutors accused Chief Executive and Chairman Giuseppe Orsi in the arrest warrant of paying bribes to intermediaries to secure the sale of 12 helicopters in a 560 million euro ($749 million) deal when he was head of the group's AgustaWestland unit.
"AugustaWestland and its management seem to be used to paying bribes and we have reason to believe that such a corporate philosophy could be repeated in the future if not stopped through an arrest," judge Luca Labianca wrote in the warrant, reviewed by Reuters.
Orsi's lawyer said his client denied distributing any money or pocketing a single euro.
Highlighting the political sensitivity of the case before the parliamentary elections on February 24 and 25, Prime Minister Mario Monti said the government would deal with management issues at Finmeccanica. The state is the largest individual shareholder in the company with more than 30 percent.
"There is a problem with the governance of Finmeccanica at the moment and we will face up to it," Monti told RAI state television.
India, currently the world's largest weapons importer, has a history of corruption in defense deals dating back to the 1980s.
Indian Defense Minister A.K. Antony has ordered an inquiry into the deal to be conducted by the Central Bureau of Investigation, the country's federal police force. In a statement the ministry said Italy had not provided details of its own investigation. Continued...