VVIP chopper scam: Govt had approved FDI proposal of AgustaWestland subsidiary, reveal Finance Ministry documents

NEW DELHI,AZAAN JAVAID : Italian company Finmeccanica and its subsidiary AgustaWestland, who are facing a multi-agency probe in the Rs 3,726-crore VVIP helicopter deal, it seems, have not completely gone out of business in India. Not only did Finmeccanica participate in India’s largest defence and aerospace show, Aero India, in February 2015, in Bengaluru, the finance ministry documents reveal that the ruling dispensation had approved an FDI proposal of an AgustaWestland subsidiary in September last year.

Indian Rotorcraft Ltd (IRL), a joint venture of Tata Sons and AgustaWestland NV, Netherlands, was among the 11 companies whose proposal for foreign direct investment (FDI) were approved by the government last year based on the recommendations of the Foreign Investment Promotion Board. The government had approved 11 such proposals, including that of Indian Rotocraft. The total FDI approved amounted to Rs 1,567.91 crore.

“Indian Rotocraft Ltd, Mumbai, has sought approval to incorporate the helicopter model as AW 119Kx in place of Aw119Ke,” reads the statement by the ministry of finance, released in October 2015.

Approval to change the foreign investor from AgustaWestland Netherlands to AgustaWestlands Italy had also been made by the Indian Rotocraft, which the government seemed to have accepted as well. The approval was sought by the Indian Rotocraft as, according to official documents, AgustaWestland Netherlands in January 2014 had merged with AgustaWestland Italy, “pursuant to an internal reorganisation through merger within the AgustaWestland group”. Under the section which mentions the amount of proposed FDIs by the companies, IRL’s proposed amount is shown as ‘NIL’.

The ministry of defence, in its October 2014 order, had banned AgustaWestland and Finmeccanica, along with IDS Tunisia, which is also an accused in the chopper scam. Interestingly, the sections ‘Period of Banning’, ‘Banning extended to’ and ‘Remarks’ have been left blank in the order.

The Congress party had earlier this week alleged that under the Modi government, permission by Foreign Investment Promotion Board was given to IRL to invest in India even though their parent company was involved in the massive scam.

Responding to the allegations, the Centre said that in an order dated July 3, 2014 it had put on hold all procurement/acquisition cases in the pipeline of six companies figuring in the FIR registered by the CBI.

Speaking specifically about the IRL, the government said that this proposal was approved on September 2, 2011, based on an application by the said company.

“The factually misinformed have also made a mention regarding clearance of a joint venture involving Agusta Westland by the Foreign Investment Promotion Board. This proposal was approved on 2nd September 2011 based on an application by Indian Rotorcraft Ltd a joint venture of Tata Sons with Agusta Westland NV, Netherlands. This was later changed to Agusta Westland S.p.A Italy due to reorganization within the group. On 7th February 2012, an industrial licence for the manufacture of helicopters was granted by the Department of Industrial Policy and Promotion to Indian Rotorcraft Ltd. However, the validity of licence has since expired,” reads the statement. The government, however, did not elaborate on why was the FDI proposal approved in September 2014.

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Posted by on May 1, 2016. Filed under Nation. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.