Finmeccanica head arrested over India bribe allegations

Tue Feb 12, 2013 4:37pm EST
 

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.

"AgustaWestland 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.

In a statement, Italy's economy ministry said it was working to provide management continuity, the protection of shareholders' interests and transparency in decision-making at the group.

Finmeccanica convened a meeting of its board for Wednesday at 1700 GMT to consider the next steps. In a statement, it said activities would continue as usual "in order to limit the impact from today's judicial activities on, amongst other things, the disposals process under way."   Continued...

 
Finmeccanica Chairman and Chief Executive Officer Giuseppe Orsi poses for photographers during a convention in Rome in this December 18, 2012 file photo. Italian police on February 12, 2013, arrested Orsi in a corruption probe centred on the sale of helicopters to the Indian government. REUTERS/Remo Casilli