* Finmeccanica promotes insider Pansa after CEO arrested
* India suspends $750 million deal over bribe claims
* Corruption taint could hurt Finmeccanica's overseas sales
By Keith Weir
MILAN, Feb 14 (Reuters) - The new head of Italian defence
group Finmeccanica has inherited a corruption crisis
over a $750 million helicopter deal with India that risks
hurting the company's business in other foreign markets.
Italy's second largest corporate employer moved chief
operating officer Alessandro Pansa into the top job after police
arrested CEO and Chairman Giuseppe Orsi on Tuesday.
Orsi, who is being held in jail but has not been charged,
faces allegations of paying bribes to win a 560-million-euro
($750-million) contract for the company's AgustaWestland unit to
supply 12 helicopters for use by senior Indian politicians.
He denies any wrongdoing.
Finmeccanica shares fell 1.75 percent on Thursday and have
lost 12 percent in the aftermath of Orsi's arrest.
Concerns over the potential long-term damage to sales from
the taint of corruption claims outweighed relief at swift action
to fill the management vacuum.
"The speed at which the company tried to fix the corporate
governance issues is a positive," Italian bank Mediobanca said.
"We still see reputational risk and we wonder if some other
countries may try to cancel orders," it said.
India will make no more payments and will not take delivery
of the remaining nine helicopters until a probe by its Central
Bureau of Investigation (CBI) is complete, two officials at
India's Defence Ministry told Reuters on Wednesday.
The bribery case is having political repercussions in both
India and Italy.
In India, where national elections are due next year, the
opposition Bharatiya Janata Party (BJP) lambasted the
Congress-led government for not acting sooner over the
In Italy, elections are only just over a week away and all
sides are trying to make political capital from the latest in a
series of corruption cases to shake the Italian business world.
Former Prime Minister Silvio Berlusconi, who has fought a
series of legal battles himself over his business empire and
private life, said on Wednesday that overzealous prosecutors
risked harming Italian business.
The Italian state remains the largest shareholder in
Finmeccanica with a stake of about 30 percent.
Centre-left leader Pier Luigi Bersani, whose group was ahead
in the last opinion polls published before the Feb. 24-25
election, said on Thursday it was the wrong moment to consider
"In this moment it would be crazy... I am talking about Eni,
Enel, about Finmeccanica," Bersani said when asked about
potential privatisations in a television interview, referring to
state-controlled oil giant Eni and utilities group Enel
Ratings agency Moody's confirmed its rating of Finmeccanica
debt after Pansa's appointment but cut the outlook to negative
"The negative outlook reflects heightened challenges in
achieving a stronger operating and financial profile that is
consistent with expectations for the Baa3 rating," it said.
Moody's cited a soft outlook for defence spending and the
need for Finmeccanica to sell off more assets.
Pansa, who joined the company in 2001 as chief financial
officer, will be supported by Guido Venturoni, 78, a former
admiral who becomes vice chairman and who was the senior
independent director on the Finmeccanica board.
Shareholder meetings will be held in April to finalise the
new board which is when a new chairman could be appointed to
work alongside Pansa.
The heavily indebted group is trying to sell units including
its AnsaldoEnergia power engineering business to focus on its
core aerospace and defence activities.
The 50-year-old Pansa, a graduate of Italy's prestigious
Bocconi University where Italian prime minister Mario Monti also
studied, was involved in disposal talks alongside Orsi.
Aerospace analyst Nick Cunningham of London-based Agency
Partners said Pansa could benefit from the restructuring started
by Orsi in his two years in charge.
"If Alessandro Pansa is really lucky he could end up being
at the helm of Finmeccanica when all the benefits of all that
hard work comes through in the numbers."
(Reporting by Danilo Masoni and Antonella Ciancio in Milan;
Editing by Louise Ireland)