UPDATE 1-Finmeccanica boss to stay and fight to clear name-lawyer

Last Updated: Mon, Oct 15, 2012 16:30 hrs

By Danilo Masoni

MILAN, Oct 15 (Reuters) - Finmeccanica SpA Chairman and CEO Giuseppe Orsi, subject of an anti-corruption probe over an Indian helicopter deal, has pledged to stay in his post to clear his name after weekend reports said he may quit.

Orsi is under investigation in a probe centering on a 560 million euro ($724.4 million) Indian helicopter contract won by Finmeccanica, which is controlled by the Italian government.

He denies any wrongdoing but in recent days two centre-left parties have raised questions about whether he should remain at the helm of the country's second-biggest private group, and local media have said he is increasingly isolated.

Orsi's lawyer, Ennio Amodio, told reporters in Milan the Finmeccanica boss would quit if the government told him to do so, but added there was no indication that this was the case.

"His personal intention is to stay on, defend himself and demonstrate that accusations against him are groundless," Amodio said on Monday, acknowledging that pressure on Orsi to quit was mounting.

The lawyer blamed a conspiracy "by various groups to eliminate him from the Italian scene," without elaborating on who might be behind such a plot.

Orsi, who was appointed CEO in May 2011, took on responsibility as chairman in December last year after his predecessor, Pier Francesco Guarguaglini, was forced to resign over a separate corruption investigation.

He has since been steering the loss-making company through a tough restructuring, but has been weakened by news that he was under investigation in the Indian probe, which first broke in February.


The investigation was triggered by allegations of an ex-Finmeccanica employee, himself under investigation. The probe focuses on alleged kickbacks that were paid to secure an order of 12 helicopters India awarded in 2010.

A meeting between Finmeccanica's top executives and the government due on Tuesday to discuss alliance prospects for Europe's No. 3 defence group was canceled, ostensibly because this was no longer seen as urgent after the planned tie-up between EADS and BAE Systems Plc fell apart.

However, Italian media said at the weekend that the meeting had been canceled because Prime Minister Mario Monti was taking time to evaluate Orsi's position. Some reports said possible replacements for Orsi included Telecom Italia SpA Chairman Franco Bernabe.

There were also political calls for change.

"The government ... cannot remain passive," the Italy of Values party said in a statement on Sunday, reiterating its call for the whole Finmeccanica board to be revoked.

The centre-left biggest political force, the Democratic Party, also questioned whether the group's current management was still capable of leading the company.

The government owns about 32 percent of Finmeccanica, Italy's biggest private employer after Fiat SpA.

Orsi's relationship with Monti's government has been further complicated by a wiretapped conversation, leaked to Italian media, in which Orsi suggests that the former wife of Economy Minister Vittorio Grilli had been hired for false consultancy services by Finmeccanica.

Orsi, Grilli and Grilli's former wife have denied there was a consultancy deal.

When the Indian corruption scandal mounted in April, Orsi faced similar calls to resign.

At that time, however, he received the support of Industry Minister Corrado Passera.

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