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Feb 13, 2013 at 11:34am IST

Ex-IAF Chief SP Tyagi denies involvement in Italian chopper deal, says is ready for inquiry

New Delhi: Former Air Chief Marshal Sashi P Tyagi, who is facing corruption allegations in the Rs 3,546 crore chopper deal with Italy's AgustaWestland, on Wednesday denied having any involvement in the case and said changes in the helicopter tender were made before his tenure started. He, however, said he is ready for an inquiry into the bribery case that led on Tuesday to the arrest of Giuseppe Orsi, CEO of Finmeccanica, which owns AgustaWestland.

Tyagi, whose family members allegedly received part payments amounting to 100,000 euros from two AgustaWestland managers, said he was "shocked" at the allegations. "I asked my relatives about this, they told me they have nothing to do with this," he added.

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"In my knowledge, nothing was done that I could doubt on. If so much is in the news then I am sure there is something. I am ready for the inquiry and I want it to happen," Tyagi added.

Meanwhile, Defence Minister AK Antony warned of action against those involved in the deal and said, "Whoever is found guilty in the Italian chopper deal will have to pay the price and nobody will be spared."

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The deal and the corruption taint

The three cousins of SP Tyagi - Juli, Docsa and Sandeep Tyagi - received part payments amounting to 100,000 euros from two AgustaWestland managers. Reuters reported that the review of Orsi's arrest warrant shows that two managers paid the cousins, among others, to swing the 2010 contract for supplying 12 helicopters to India. Italian prosecutors alleged that Orsi hired US-born Guido Ralph Haschke, who had close ties with the Tyagi brothers, to lead dealings in India to secure the contract.

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In February 2010, India had inked the deal to acquire the 12 three-engine AW-101 helicopters from AgustaWestland for IAF's elite Communication Squadron, which ferries around the President, PM and other VVIPs.

Despite initial objections by the finance ministry, the Cabinet Committee on Security had cleared the deal in 2010. Antony had then said, "IAF and SPG repeatedly told us the helicopters were required because of the changing security scenario... the finance ministry also agreed later. The CCS then took a considered decision."

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The case, which is still in its preliminary investigation phase, has rocked Italy before parliamentary elections on February 24-25, and also in India, the world's largest weapon importer. Prosecutors in the northern town of Busto Arsizio, near AgustaWestland's headquarters, said Orsi hired US-born Guido Ralph Haschke, who was then a consultant for the Finmeccanica group, to lead dealings in India to secure the contract.

Haschke and his partner Carlo Gerosa, prosecutors said, had close ties with the Tyagi brothers. Prosecutors allege that Orsi, along with the current chief executive of AgustaWestland Bruno Spagnolini, paid 400,000 euros in consultancy fees to Haschke and Gerosa. "Of this, 100,000 euros in cash were given to the Tyagi brothers," they said in the 65-page warrant.

The money went to the brothers to pressure Indian officials and help doctor the tender terms to favour the specification of AgustaWestland's helicopters, the prosecutors alleged. The tender was changed to accommodate AgustaWestland by, among other things, lowering required altitudes where the helicopters could operate to 15,000 feet from 18,000 feet, "thus allowing AgustaWestland, which otherwise would not even have been able to present an offer, to take part in the tender", the warrant said.

The tender terms were also changed to introduce an engine failure flying test. This favoured AgustaWestland as its helicopters were the only ones in the tender operating with three engines.

Orsi's lawyer said his client denied distributing any money or pocketing a single euro, adding that the investigation did not provide any evidence of illicit payments. AgustaWestland said on Tuesday it supported Spagnolini who was placed under house arrest.

The warrant also covered Haschke and Gerosa. Neither has been arrested as they are in Switzerland. A lawyer for Haschke, contacted by reporters, declined to comment on the case while Gerosa could not be reached for comment.

Sashi Tyagi, head of India's air force from 2004-2007, in November had claimed he had no memory of the issue. The warrant did not explain how Tyagi might have been involved in a deal completed after he had left his post.

(With Additional Inputs From Reuters and PTI)

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