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Defence Ministry to protest FIPB clearance for Agusta joint venture

Last Updated: Tuesday, November 12, 2013 - 20:18

New Delhi: The Defence Ministry is set to protest the approval by the FIPB to a proposal to assemble military and civilian choppers by AgustaWestland, which is facing the prospect of cancellation for its alleged wrongdoings in the VVIP chopper scam.

The Ministry is unhappy with the approval given to a Tata-AgustaWestland Joint venture to produce and upgrade choppers in the country and is going to oppose it, Government sources said here.

BJP has also attacked the Government on the issue saying, "This company (AgustaWestland) should have been blacklisted and all deals be scrapped till the probe gets over, but the UPA is acting to the contrary. The Tata-AgustaWestland deal not only affects the investigations but legitimises a rogue company."

The Foreign Investment Promotion Board (FIPB) in its meeting on September 19 approved the proposal of Indian Rotorcraft, which is a joint venture between Tata Sons (74 percent) and AugustaWestland (26 percent).

As per the proposal, the Indian Rotorcraft will assemble AW119Kx helicopters, an upgraded version of AW119Ke chopper. The company expects to commence production from March 2014.

The issue of corruption charges on AugustaWestland`s parent company Finmeccanica came up during the FIPB meeting and it was observed that "the issue which was being investigated related to helicopter model AW101 and not this proposal”.

The board, according to sources, observed in its minutes that "law will take its own course and the current FIPB consideration is without prejudice to any existing or future civil or criminal proceedings against the foreign investor or its parent".

The proposal will now be placed before the Finance Minister for a final nod.

The Defence Ministry had issued a final show cause notice to AugustaWestland for violating the terms of the contract on October 21 and asked the Anglo Italian firm to explain why "all or any action as prescribed, including cancellation of the contract, should not be taken against them for violating the terms of the pre-integrity pact and the contract for procurement of 12 VVIP choppers".

The government has already frozen the contract for supply of 12 AW-101 VVIP choppers to the IAF after allegations that Rs 360 crore was paid as bribe in which two top officials of the company were accused.

First Published: Tuesday, November 12, 2013 - 20:18
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