Italian helicopter company in bribe probe says it is clean

ROME (AFP) - AgustaWestland, a unit of Italian aerospace group Finmeccanica, said on Saturday that it was complying with India's request for clarifications over a bribery scandal and had fully respected the law.

"AgustaWestland is confident that the full compliance with the relevant laws as well as the good conduct of its past and present senior executives and managers will be demonstrated as soon as practicable," it said in a note.

India on Friday said it had taken steps to cancel a US$748 million (S$925 million) contract for 12 helicopters from AustaWestland amid allegations that the deal was won through bribes of up to 50 million euros (S$82.7 million).

The ministry of defence said it had "initiated action for cancellation" of the contract and asked the Italian firm to "reply within seven days" if the terms of the contract and an "integrity pact" it signed in 2010 had been violated.

AgustaWestland confirmed that the ministry had "given notice requesting information within seven days", and said it was compling with the request.

The scandal toppled the head of the defence company, Giuseppe Orsi, who resigned from behind prison bars in Italy on Friday.

The former head of AgustaWestland, Bruno Spagnolini, is also behind bars.

India, which has put payments to the company on hold, has already received three of the choppers. The rest were to be delivered by the end of 2014.

The purchase came under scrutiny from Italian investigators probing allegations that the group had broken the law by paying bribes to foreign officials.

Italian prosecutors suspect that kickbacks worth up to 10 per cent of the deal were paid to Indian officials to ensure AgustaWestland won the contract.

Cash was allegedly handed to a cousin of former Indian air force chief S.P. Tyagi, who denies wrongdoing, with more money funnelled via a web of middlemen and companies in London, Switzerland, Tunisia and Mauritius, press reports say.

Orsi denies any wrongdoing and his lawyer has called the allegations against him "inconsistent" and his arrest "unjustified".