Finmeccanica appoints CEO after India suspends deal
By Paolo Biondi and Manoj Kumar
ROME/NEW DELHI (Reuters) - Italy's Finmeccanica (SIFI.MI: Quote) promoted company insider Alessandro Pansa to run the defense group as CEO after the arrest of its head for alleged bribery led India to suspend a $750-million deal to buy helicopters.
After a hastily convened board meeting in Rome, Finmeccanica said Pansa, the chief operating officer, would step up to ensure management continuity following the arrest in northern Italy on Tuesday of chairman and chief executive Giuseppe Orsi.
Orsi, who is being held in jail but has not been charged, faces allegations he paid bribes to win a 560-million euro ($750-million) contract for the company's AgustaWestland unit to supply 12 helicopters for use by senior Indian officials.
Orsi denies any wrongdoing; but the company in its statement said Pansa, 50, would take on "the powers and duties previously held by" him. Pansa will have the titles of COO and CEO and ensure "comprehensive management of the company and the group".
The case is having a political impact in both Rome and New Delhi. It is the latest in a series of scandals to shake the Italian business community ahead of an election in 10 days.
In India, national elections are not due until next year but the opposition Bharatiya Janata Party (BJP) has attacked the Congress-led government for not acting sooner over allegations of bribery.
The case risks hurting Finmeccanica's attempt to expand business with India, the world's largest weapons importer.
India will make no more payments nor take delivery of the remaining nine helicopters until a probe by its Central Bureau of Investigation (CBI) is complete, two officials at India's Defence Ministry told Reuters on Wednesday. Continued...