Is the Defence Ministry in Sleep MoDe?

Heading wasteland? Defence Minister AK Antony faces a bumpy ride in the Budget Session
Heading wasteland? Defence Minister AK Antony faces a bumpy ride in the Budget Session
Photo: AP

THE GHOST of kickbacks in botched armed deals, which the Ministry of Defence (MoD) was wishing away for the past one year, has come back to haunt the UPA 2 in a big way. In the ongoing Budget Session of Parliament, the UPA government faces a barrage of accusations from the Opposition — the still unravelling AugustaWestland chopper deal and the role of Deputy Chairman of Rajya Sabha PJ Kurien in the infamous Suryanelli rape case, being just two of them.

Already, the BJP and other opposition parties have likened the multi-crore helicopter deal to the Bofors scandal and new facts emerging every day put the defence ministry in the dock for its lackadaisical attitude. Pushed into a corner, the government has virtually agreed to everything — from a discussion in Parliament to a joint parliamentary probe — to ensure that the Parliament session is conducted without any ruckus.

As soon as the news of arrest of Giuseppe Orsi, CEO of Finmeccanica, the manufacturer of the choppers, by the Italian authorities broke on 12 February, Defence Minister AK Antony was the first off the blocks to react to the news. The minister denounced the deal, immediately promising that if the kickback allegations were proved, then the 3,546 crore deal would stand cancelled, thereby effectively putting the brakes on the delivery of the remaining nine helicopters. Three of the contracted 12 have already been delivered.

A day after the minister’s announcement, various news channels and national dailies went into overdrive, quoting from the 64-page prosecution report filed by the Italian authorities, which details how Italian nationals Guido Haschke and Carlo Gerosa and UK-based consultant Christian Michel connived to push the deal through nefarious means. Bribes amounting to 51 million euros were paid and fictitious orders were raised through IT companies in Chandigarh. Junk helicopters were bought in order to mask the money trail. The bombshell in the report was the part where it said that middleman Haschke admitted that he had met former Indian Air Force chief SP Tyagi six-seven times and that Tyagi’s three cousins were instrumental in swinging the deal.

An embarrassed MoD sent a letter to the CBI requesting the agency to probe the matter. The letter stated that the ministry had received information of irregularities in the AgustaWestland deal, which they wanted the investigating agency to verify. Press clipping were attached to the complaints. Sources in the CBI say that when their team went to meet MoD officials, all they had to show were press clippings. This is one of the primary reasons why the CBI has not filed a preliminary enquiry report as of now.

Under a cloud Finmeccanica CEO Guiseppe Orsi (top) has been arrested by the Italian authorities; Former IAF chief SP Tyagi
Under a cloud Finmeccanica CEO Guiseppe Orsi (top) has been arrested by the Italian authorities; Former IAF chief SP Tyagi

While the details of how smoothly the defence middlemen functioned and how effectively they managed the whole deal had all come out, it was also pretty apparent that the MoD had bungled big time by refusing to act until the scam had blown on their faces.

Sources in the army call this typical of Defence Minister Antony. “Remember the time when Lt Gen (retd) Tejinder Singh allegedly offered bribe to the then army General VK Singh and how he went to tell the Rakhsa Mantri about it?” says an officer on condition of anonymity. “What did he do? The Raksha Mantri held his head, was in deep anguish but didn’t do anything till the issue became public, embarrassed the government and then, as if on cue, a CBI inquiry was ordered. But only after the issue became public. The same thing happened here.”

Another senior government functionary says: “What is surprising is that despite putting such premium on honesty and integrity, information about impropriety in the AgustaWestland deal was in the air for a long time, but unfortunately, nothing was done. What the defence minister has done today, he should have done at least a year ago. The way it was going, you have to thank god for the arrest of the Italian CEO, otherwise there would have been no action on the Indian front. Not even the pretence of a probe.”

But the ministry had initiated an inquiiry much earlier. On being first brought to notice in early 2012 that an irregularity had occurred in the procurement of the helicopters, the MoD ordered an internal probe headed by Senior Joint Secretary AK Bal, who checked the whole process and found nothing wrong in the process. Perhaps the investigators found comfort in the fact that the VVIP chopper deal was protected by the integrity pact, which clearly mentions that the company cannot pay bribe or influence officials.

However, journalists were not the only ones blowing the bugle. In a factsheet put up on the PIB website, the defence ministry admitted that in “November 2012, a letter was received in MoD from the director, income tax investigations, regarding allegations against Indians possibly involved in the deal as middlemen and seeking information about them”. After sitting on this information for two months, the MoD wrote to the Income Tax (IT) department that “it had no such details and if the IT has any such credible information, it should share with them”.

The MoD is trying to take refuge in the fact that they had tried to contact the Italian and UK authorities through MEA also without much success, but it is not cutting much ice with the Opposition parties.

ACCORDING TO senior Supreme Court advocate Prashant Bhushan, “They can’t; they won’t. Italy is itself doing investigations, then why would they refuse the Indian government? In fact, there is a UN convention against transnational organised crimes, which both India and Italy have ratified.” Under this convention that Bhushan refers to, both governments are obliged to share any information, including bank details, and even enable searches and seizures by the investigating agency of the other country. It also obliges both countries to have joint investigations. “Therefore, for anybody to say that they are not providing information, is utter nonsense. It is just like Madhavsinh Solanki going to Switzerland and telling the authorities to not provide information. If Salman Khurshid says so, why should we believe him?”

Adds Bhushan: “They have not registered an FIR in the case. Without registering an FIR, you cannot even start an investigation. There are so many people mentioned in the Italian report who are sitting in India. All the Aeromatrix directors, for instance, are here in India. Why are they not being interrogated?” Chandigarh-based Aeromatrix has emerged as the front company that Haschke and Gerosa used for their dubious deals.

This episode has raised several embarrassing questions for AK Antony:

1. Why did the MoD not take any action on the basis of the report appearing in the Indian and Italian media way back in 2012?

2. Why wasn’t AgustaWestland threatened with cancellation of contract if they didn’t come clean in 2012, as is being done now, after the arrest of the Finmeccanica CEO?

3. The prosecution report prepared by Italy details the whole transaction and how the money was moved. Despite that, why were no steps taken to initiate an inquiry on Indian soil?

4. Despite the name of Air Chief Marshal (retd) SP Tyagi, his three cousins and others living in India figuring in the testimony given by middleman Haschke, why was no inquiry constituted to probe their alleged role in the VVIP chopper deal?

5. What happened to the internal inquiry done by the MoD?

6. Why was the ministry sitting on the information, which was otherwise available to the media? Why did it react only after it blew in its face?

According to BJP spokesperson Prakash Javadekar, the AgustaWestland deal is a typical case of corruption, which is being relentlessly pursued by a foreign country that is going to benefit immensely from its successful conclusion, whereas the country that is losing money has shown no interest.

“The government chose to remain a mute spectator, finding one excuse after another to postpone the inquiry,” says Javadekar. “The bribe factor is established. The transaction has been traced. Quantum is determined. The bribe givers have been arrested. The methodology of the bribery is also known. The only missing link is India’s refusal to track the beneficiaries.”

The chopper deal also seems to have led to an internal conflict within the Congress. Much to the chagrin of his colleagues, Antony unilaterally announced his intention of cancelling the deal. External Affairs Minister Salman Khurshid was quick to tell a newspaper that “we don’t want to overreact because we don’t want to let this affect our defence preparedness”. What assumes significance is that both Khurshid and Antony are members of the Cabinet Committee on Security (CCS). Later on, both ministers tried to downplay their utterances.

But Khurshid is not the only one who has reservations against the cancellation of the deal. According to Air Vice Marshal (retd) Kapil Kak: “Antony’s credibility and integrity cannot be questioned, but taking a decision in haste doesn’t go with his image. If the government takes a decision to scrap the deal right away, it will be a damaging move. It will hurt the armed forces, especially at a time when the two neighbouring countries Pakistan and China are upgrading with the latest technologies.”

Defence preparedness apart, both the MoD and the government will be hardpressed to answer the difficult questions they are bound to face in Parliament. Now much will depend on what the CBI is able to get from its probes in Italy. And if that means some heads will have to roll, will the defence minister act like he has promised? Another question only Antony can answer.


  1. Can some of you intelligent morons explain to the PUBLIC as to how on earth will the cancellation of the deal (announced by Defense Minister Anthony) will hurt the armed forces and will be a “damaging move” when this procurement deal is about buying Choppers for “VVIP transportation”. Those scambags should be made to ride on Donkeys & 1960 ambassador cars instead.. for their movements. “Kisko ullu bana rahe hai UPA and its paid Media??????”. What bluudy ridiculous non-sense justification, which is a sheer mockery of the Indian Public. SHAME ON YOU WHO PRINT THIS !! If you have the guts “highlight the facts” !!

  2. This is one of the utter stupid article i have ever read. You have asked some questions in this and the answers are already provided here. When you say that italy should share information with india, i have another example to give you. When headly sentenced to 35 yrs of jail term by the us court,all the politicians and media were crying by saying, that was a little punishment for him and he should be handed over to india. Let me ask you a simple question, what the hell india will give him. If he was in india and this punishment was given by our court,he will surely out of prison after 13 yrs. Since it is in us 35 yrs in prison means 35 yrs not like our lifeterm of 13 yrs. So change has to be made in the judicial system and that has to be implemented by our parliament which consist of our politicians. If they try to make changes in the current laws,they are very much aware that they vil be the first to in to jail. So no wonder,we have to rely oñ the laws that made some 60 yrs back.

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