India issues final show cause notice to AgustaWestland-govt official

Reuters News
Posted: Oct 23, 2013 8:30 AM

NEW DELHI (Reuters) - India's defence ministry has issued a final "show cause" notice to AgustaWestland seeking to cancel a deal to buy a dozen helicopters and has given the company 21 days to reply, a government official said on Wednesday.

The official said the company, a subsidiary of Finmeccania, has been asked to explain why action should not be taken against it for violating the terms of the pre-contract integrity pact.

Earlier this month, AgustaWestland has invoked arbitration over the scandal-tainted deal.

In February, India froze payments on the 560 million euro ($771.32 million) contract after the deal became mired in allegations of bribery and the then-CEO of Finmeccanica was arrested by Italian police for allegedly paying bribes to secure the deal.

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AgustaWestland denies the allegations.

A spokesman for Finmeccanica, which controls AgustaWestland, declined to comment.

(Reporting by Nigam Prusty; Writing by Sanjeev Miglani; editing by Malini Menon)