India vows to scrap chopper deal if graft proved

India threatened Wednesday to cancel a deal to purchase 12 helicopters from the Italian firm Finmeccanica if an official inquiry proved the contract worth nearly $750 million was secured through kickbacks.

"If we find any evidence of corruption then we will blacklist the company and even cancel the deal," Defence Minister A. K. Antony told reporters in New Delhi.

"We don't want to jump the gun... (but) we can get our money back at any stage," Antony added.

India's government announced on Tuesday that it had ordered the Central Bureau of Investigation to investigate reports of alleged bribery of government officials by Finmeccanica, after the head of the Italian aerospace giant's reported arrest.

Italian media reports said the company's chairman and chief executive Giuseppe Orsi had been detained as part of investigation into alleged kickbacks paid to Indian government officials.

Italian prosecutors were reported to suspect that bribes worth around 10 percent of the deal were paid to ensure Finmeccanica's AgustaWestland helicopter unit won the contract.

Under the terms of a deal signed in 2010 and valued at $748-million, the helicopters should be delivered between January and July this year.

Antony said that his ministry's "integrity is foolproof" while promising that the inquiry would "examine every stage of the contract" process.

An Indian foreign ministry spokesman said on Tuesday that India had received no information on the Italian probe.

India's main opposition Bharatiya Janata Party said "many Indian names" were allegedly involved in the sale and accused the Congress-led government of dragging its heels in seeking to identify them.

In the 1980s a previous Congress government, led by then-prime minister Rajiv Gandhi, collapsed over charges of kickbacks paid to Indian officials by the Swedish group Bofors to clinch a $1.3-billion artillery deal.

India banned middlemen in defence deals following the Bofors scandal.

Finmeccanica said in an emailed statement on Tuesday that its operations "will continue as usual".

It said it was issuing the statement "with reference to the precautionary measures issued today towards the chairman and CEO of Finmeccanica and the CEO of the controlled company AgustaWestland".

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