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09:42 AM, August 26, 2014
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Finmeccanica Group Will Not Face Ban From Indian MoD: Reports

Finmeccanica and its subsidiaries will be allowed to continue doing business in India and will not face blacklisting, according to a report published by India Today magazine.

The Indian government has placed conditions, which will disallow the company from getting any new order where there is another vendor option, the report said. The government had previously put all deals with the Finmeccanica group, its affiliates and subsidiaries on hold. The Defence Ministry decision, for which orders have been issued, will allow the group to continue with ongoing business and compete in other deals, it added.

The MoD, last March, cancelled the $770 million deal with AgustaWestland to acquire 12 helicopters for VVIP use after the CBI lodged a first information report, following a preliminary enquiry and claims of Italian prosecutors that the company paid kickbacks to clinch the deal.

According to the report, the terms, which has been cleared by the Attorney General, state: all ongoing contracts will continue unhindered; all contracts related to spares will continue; contracts with Russian manufacturers, where Finmeccanica group is involved in the back-end, will continue; Finmeccanica will be allowed to participate in all tenders but if there are multiple options, the group will not be considered regardless of the competitiveness of the offer.

The decision is a significant departure from the previous government which chose to bar every firm that came under investigations. As a result, some of the top suppliers to the Indian Armed Forces, were affected, crippling many ongoing programmes, the report concluded.

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