Finmeccanica, Agusta JVs yet to take off in India

Last Updated: Fri, Feb 15, 2013 20:30 hrs

Apart from a joint venture with the Tatas, the Italian defence and aerospace giant, Finmeccanica, at the centre of a military procurement bribery scandal in India, has six legal entities registered in this country.

None of these companies, including the joint venture with the Tatas to assemble helicopters in India, have started operations in a big way.

The entities are AgustaWestland India Pvt Ltd, WIN Bluewater Services Pte Ltd, Fata Hunter India Pvt Ltd, Asia Power Projects Pvt Ltd, Ansaldo STS Transportation Systems Pvt Ltd and defence and security electronics provider Selex Galileo India Pvt Ltd. The Italian company first started business with India in 1971, when it supplied 41 Sea King helicopters to the navy.

Of Finmeccanica’s India businesses, the joint venture with the Tatas and AgustaWestland was to assemble helicopters in Hyderabad. Apart from buying land at the GMR Special Economic Zone adjoining the airport, no work has begun on the ground. With the Italian partner at the centre of the corruption scandal, insiders say the project will be further delayed.

The former chief executive of Finmeccanica, Giuseppe Orsi, and the former head of its helicopter division, Bruno Spagnolini, are facing charges of international corruption and tax fraud in Italian courts. Bribes amounting to ¤20 million ($27 million) were allegedly paid through two Switzerland-based intermediaries, Guido Haschke and Carlo Gerosa, who are officially fugitives, say Italian prosecutors.

A spokesperson of Indian Rotorcraft Ltd said the company was a proposed joint venture with AgustaWestland, the business of which is to assemble AW119Ke helicopters for export to AgustaWestland or for sales in the domestic civil market for civilian usage. The JV had for clearance from the Indian government's Foreign Investment Promotion Board.

The spokesperson said IRL had no connection with the Indian Air Force’s purchase of the helicopters, at the centre of the scandal. “IRL's business is to assemble helicopters, which in any case is only slated to begin in April 2014, subject to various statutory approvals. IRL will assemble the AW119Ke, a very different product from the one purchased by the IAF,” the spokesperson said.

On the other hand, Selex Galileo, an unit of Finmeccanica SpA, was planning to form a joint venture with Chennai-based Data Patterns (India) Pvt. Ltd, to develop defence electronics products. While an in-principle agreement was signed through a memorandum of understanding between the two companies, the joint venture has not been formed so far.

While Data Patterns’ managing director, S Rangarajan, was not available for comment, a senior official from the company, on condition of anonymity, said the partners were waiting for government approvals. Since the JV was not formed, no investments were made till now.

On the impact of Rs 3,600-crore helicopter purchase scandal in which Finmeccanica is involved, the official said, “it would be premature to speak about the impact and step to be taken in future, at this point of time”.

Data Patterns has been focusing on the requirements of products in the domain areas of avionics, radar, control, fire control, and, ATE (Automatic Test Equipment) for major government defence and space programmes.

In March 2012, Selex Galileo stated the JV would be located in Chennai and focus on a broad range of defence electronic products and technology developments. The two companies would leverage their strong development and manufacturing capabilities and their advanced product ranges.

Rangarajan had earlier said the JV would bring a technology value to India’s growing defence programmes and the synergy would strengthen “our capabilities to address our defence requirements with today’s technology solutions”.

Italian execs face arraignment

Two top Italian defence executives arrested in a bribery scandal over the sale of 12 helicopters to India faced arraignment on Friday, as leaks revealed the alleged payments went to India via Tunisia. The former chief executive of Italian defence and aerospace giant Finmeccanica, Giuseppe Orsi, and the former head of its helicopter division, AgustaWestland, Bruno Spagnolini, were due to appear before a judge.

Bribes amounting to Euro 20 million ($27 million) were paid through two Switzerland-based intermediaries, Guido Haschke and Carlo Gerosa, who are officially fugitives, Italian media said citing investigative documents. Total bribes paid for the Euro 556-million deal were Euro 30 million, investigators believe. (AFP)

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