Italian investigators Tuesday alleged that business conglomerate Finmeccanica bribed S P Tyagi when he was chief of the Indian Air Force to swing the controversial AgustaWestland VVIP chopper deal in favour of the company.
The allegation is made in a preliminary inquiry report of the suspected corruption in the Rs 3,546 crore deal filed by prosecutors in Italy on Tuesday.
The 64-page report, filed in the tribunal of Busto Arsizio city for the arrest of Finmeccanica CEO Giuseppe Orsi, gives details of the case being investigated by Italian prosecutors and alleges that the then air chief, S P Tyagi, was instrumental in swinging the deal and was paid — "certain amount of money, not yet quantified" — through intermediaries.
Several attempts to reach Tyagi for his comment were not successful.
Last October, when The Indian Express had reported that Julie Tyagi, an Indian businessman named by Italian prosecutors in the alleged kickbacks probe, was closely related to S P Tyagi, the former air chief had confirmed to the newspaper that he was related to Julie but had also said they had no business links.
This is the first time that a service chief has been named in a probe into alleged corruption in the procurement of defence systems.
The report, a copy of which is with The Indian Express, alleges that technical requirements for the contract were tweaked by India to allow the AgustaWestland chopper enter the bidding process and that kickbacks of 51 million euros (about Rs 370 crore) were paid in Italy and India.
The Italian report names three brothers — Julie Tyagi, Docsa Tyagi and Sandeep Tyagi — as the Indian intermediaries who allegedly got kickbacks and passed it on to Indian officials. It says Finmeccanica's Orsi and alleged middlemen Guido Haschke, Carlo Gerosa and Christian Michel facilitated the payments to India.
Julie Tyagi is the Indian businessman who had been named in October as a relative of S P Tyagi.
"They promised and managed to pay, through brothers Julie Tyagi, Docsa Tyagi and Sandeep Tyagi, a certain amount of money, not yet quantified, to Air Chief Marshal Shashi Tyagi, Chief of Staff in the Indian Air Force from 2004 to 2007 - a public officer or anyway in charge of functions and activities equivalent to those of a public officer in India - to perform and for having performed a deed against his office duties," the report says.
The report also named Britain-based consultant Christian Michel as the other major middleman in the deal. It alleges that Michel was paid a "total amount of about 30 million euros, partly destined to support the corrupt activity meant to bag the order and partly to implement the contract".
The report discusses the Indian contract in detail and alleges that technical requirements were tweaked to ensure that the Italian chopper qualifies. As first reported by The Indian Express, the service ceiling requirements for the contract were changed by the Defence ministry before the tenders were issued in 2006, giving AgustaWestland a chance to qualify.
"Haschke and Gerosa, through the Tyagi brothers, in turn through their cousin Shashi Tyagi managed first to change the tender details, in a favourable way to AgustaWestland, modifying the 'operational ceiling' from 18,000 ft to 15,000 ft of altitude, thus allowing AgustaWestland (which otherwise could not have even submitted an offer) to take part in the tender," the report says.
It alleges that the flight trials were also tweaked. The trials were conducted after Tyagi retired in 2007.
"Then they managed to introduce a comparative flight trial with non-functional engine, thus facilitating AgustaWestland helicopters, the only ones which had three engines. In this way, they managed to get the contract to AgustaWestland," the report says.