AgustaWestland Deal Cancelled By India
India says it has pulled the plug on a £466m order to buy 12 British-made helicopters following allegations that bribes were paid to secure the deal.
The contract, agreed in 2010, has been cancelled with Yeovil-based AgustaWestland "with immediate effect... on grounds of breach of the pre-contract integrity pact", according to a statement from the Indian Defence Ministry.
India had already put the deal for the AW101 helicopters on ice, amid accusations that middlemen were paid to swing the sale.
The corruption claims threatened to overshadow David Cameron's trade visit to the country last February, when the Indian Prime Minister Manmohan Singh raised his "very serious concerns" about the case.
India's Defence Minister AK Anthony said at the time he did not believe AgustaWestland's denial of paying bribes.
And India's Central Bureau of Investigation said it had evidence which allegedly showed alterations were made in the helicopter specifications to favour the company.
The helicopter manufacturer denies any wrongdoing.
Giuseppe Orsi, the former boss of AgustaWestland's parent company, Finmeccanica, is on trial in Italy on fraud and corruption charges over his alleged role in securing the contract.
Bruno Spagnolini, the former chief executive of AgustaWestland, is also on trial.
The former Indian air force chief SP Tyagi, and three of his relatives are among those facing charges in India.
India has named a judge to arbitrate over the cancelled deal, which AgustaWestland is understood to be challenging.
Finmeccanica has said it will defend its position.
A spokesman for UK Trade & Investment said: "We are awaiting formal confirmation from the Indian Government."
United Technologies Corp's Sikorsky Aircraft, EADS' Eurocopter and Lockheed Martin may now be in line to provide helicopters for India's defence forces.
The country has become the world's biggest arms and defence equipment buyer in recent years, and is expected to spend £48bn over the next decade to upgrade its military.
However, arms deals in India have often become mired in controversy, with allegations that companies have paid millions of dollars in kickbacks to Indian officials.
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