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Leonardo Responds to the allegation of illegal payments

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Leonardo Responds to Allegations of Illegal Payments
(Source: Defense-Aerospace.com; posted June 11, 2018)
 
PARIS --- Italy’s Leonardo has, for the first time, provided a response to allegations that it made illegal payments to win helicopter contracts in Panama, India and South Korea.

The statement below is excerpted from a statement provided to an NGO, Corruption Watch UK, for inclusion into its investigation into potential irregularities by AgustaWestland International in the sale of Wildcat naval helicopters to South Korea.

Corruption Watch UK published its report on June 6. It contains an 8-page response from people and companies named in the report. We have excerpted below a statement from Leonardo, which includes its first official response to the India’s “VVIP scandal.”

India abruptly canceled a €566 million contract for 11 AW101 VIP helicopters for its government flight, alleging that bribes were paid by AgustaWestland (now Leonardo Helicopters) and its agents.

Judicial proceedings continue in India, although no evidence of payments has ever been made public or otherwise presented.

Italy prosecuted Finmeccanica (now Leonardo), AgustaWestland and their chief executives, but after an initial conviction was referred to the country’s supreme court, the Corte di Cassazione, all charges were dropped because prosecutors could not prove that any crime was committed. Click here for our April 2015 report on the Indian contract.

In addition to Leonardo, the CWUK report also contains a response from Christian Michel, an AW agent who stands accused by India of having paid bribes to support the AW101 sale. This is also the first time he has publicly presented his defense.

Leonardo: Comments on the Cases Regarding Panama, India and South Korea

-- Panama:
In relation to the proceedings conducted against Leonardo Spa, on 21st September 2017, the competent Judge declared the decision not to prosecute against the Company for violations charged to it. The case is closed.

-- India:
With reference to the Indian CBI charges against Leonardo group companies, it is a matter of Leonardo policy not to comment on any matters that are presently the subject of ongoing investigations or proceedings.

To note that proceedings relating to the same subject matter in Italy have not resulted in any convictions on grounds of corruption against any member of the Leonardo group, nor any of its officers or employees (past or present).

In one, the Italian public prosecutor acknowledged the adequacy of Leonardo’s Organisational, Management and Control Model (in place since 2003 and subject to regular currency reviews) not only in the prevention of corruption offences but also in respect of the compliance processes adopted to guarantee adequate standards of fairness and ethical conduct.

Those proceedings are a matter of public record, but in summary:

-- On 25 July 2014, following the conclusion of its investigations, the public prosecutor in Italy dismissed all proceedings against Finmeccanica SpA (now Leonardo Spa);

-- On 28 August 2014 AgustaWestland SpA and AgustaWestland Limited took the commercial decision to request from the Italian Court of Busto Arsizio a “patteggiamento”, thereby accepting, without admission or finding of any wrongdoing, administrative penalties in order to bring a swift conclusion to proceedings;

-- On 8 January 2018, two former CEOs of AgustaWestland (in Italy) were found not guilty of charges of international bribery by the appellate criminal court in Milan.

-- South Korea:
In accordance with Leonardo’s adviser appointment procedures (see above), due diligence was most recently undertaken on Mr Yang Kim and his company in August 2014 which did not reveal any relevant risks that would prevent the renewal of that appointment.

Leonardo took appropriate action to suspend the appointment that it had with Mr Kim and his company shortly after learning of Mr Kim’s indictment. Following a further review that appointment was terminated, notwithstanding that Mr Kim had yet to make a final appeal to the Korean Supreme Court. Leonardo is satisfied that it acted promptly and decisively in relation to this matter.

No Leonardo Group company is or has been charged with any offence or subject to any formal investigation in connection with the above South Korean matters.


   
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https://www.reuters.com/article/india-leonardo-helicopters-trial/update-1-italy-court-acquits-two-ex-leonardo-bosses-in-india-corruption-case-idUSL5N22Y5WJ

UPDATE 1-Italy court acquits two ex-Leonardo bosses in India corruption case

 

 

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(Adds lawyer comment)

MILAN, May 22 (Reuters) - Italy’s supreme court on Wednesday acquitted two former executives of defence company Leonardo in a bribery case related to a 2010 helicopter contract with the Indian government. Giuseppe Orsi, former chief executive of the Italian state-controlled defence group previously known as Finmeccanica, and Bruno Spagnolini, former head of its helicopter business AgustaWestland, were both cleared of corruption charges.

The state prosecutor in the case had asked for the pair to be acquitted citing a lack of sufficient proof.

An appeals court in 2016 had found the two former executives of the Rome-based group guilty on corruption charges related to a 560 million euro ($672 million) contract to supply a dozen helicopters, giving them prison sentences of four and 4-1/2 years.

However, Italy’s highest court ordered a retrial of the case, and in 2018 another appeals court acquitted the two. No further appeal is possible after Wednesday’s Supreme Court ruling.

A separate trial into suspected corruption and money laundering is still open in India.

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Ennio Amodio, a lawyer representing Orsi, said the Supreme Court decision would inevitably have repercussions on the trial in India.

“Clearly the Indian authorities will have to take note of the fact that at the end of a very detailed probe it was found there had never been any corruption...,” he said.

The case was a big political issue in Italy and India when it opened in 2012 and tarnished the company’s reputation at a time when India had established itself as one the world’s biggest arms buyers.

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The Italian group has always said the case was against individuals rather than the company itself.

Prosecutors dropped charges against Leonardo in July 2014. Its helicopter business AgustaWestland, which was treated separately, agreed a 7.5 million euro settlement with the court a month later.

India cancelled the helicopter contract in 2013 after Orsi was arrested, but AgustaWestland opposed India’s decision. The contract remains suspended and the subject of international arbitration in Paris. (Reporitng by Domenico Lusi, writing by Emilio Parodi. Editing by Jane Merriman and Kirsten Donovan)


   
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https://economictimes.indiatimes.com/news/defence/vvip-chopper-deal-scam-defence-ministry-extends-ban-leonardo-units-by-6-months/articleshow/70047563.cms

NEW DELHI: The defence ministry has extended suspension of business with Italian firm Leonardo – previously named Finmeccanica – which is being investigated on charges of corruption by the Central Bureau of Investigation (CBI) in the VVIP helicopter deal scam.

The firm, which has a product list that ranges from helicopters to guns and unmanned systems, has been barred from business dealings with all departments and wings of the defence ministry for another six months, after its case was reviewed as part of the ministry’s blacklisting policy. In a notice issued last week, the defence ministry said “strict compliance of the decision may be ensured by all wings of this ministry and service headquarters”.

The company and its affiliates have been banned since July 3, 2014, after the VVIP helicopter deal was cancelled by the government and senior former executives and former Air Chief Marshal SP Tyagi booked on corruption charges. Since then, the ban has been reviewed a few times as part of a new blacklisting policy that considers cases of all banned companies but has been upheld, with the latest suspension in effect from November 2018.

The Italian company, which first came under the scanner when the helicopter scandal broke out in 2012, has since changed its name to Leonardo as part of a global rebranding process. The ban means that it is missing out on several
big orders from the Indian market where it had compatible products to offer, the latest being the Indian Navy’s requirement for 111 naval utility helicopters under the strategic partnership model.

The ban on the company is unlikely to be reviewed any time soon, according to people aware of the matter, given the criminal proceedings underway in the case that has turned the spotlight on big names in the political and military establishment who were allegedly involved in a conspiracy to award the Rs 36,000 crore contract to AgustaWestland in 2010.

The ministry has in recent months lifted the ban on South African manufacturer Denel, which had been barred after corruption charges, but this was done only after a thorough process that involved the company withdrawing all legal cases. The Denel case was easier to handle as the company had already been cleared by the CBI as well as the courts on charges of corruption.

 


   
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