The Indian government has initiated the process to scrap the deal to acquire 12 VVIP helicopters with Italian firm AgustaWestland, and sent a show cause notice to the firm over allegations that kickbacks were paid to Indian officials, including former Air Force chief SP Tyagi.
The government, which has already instituted a probe by the CBI to probe the allegations, has sent a notice to AgustaWestland and has given the firm seven days to reply to the notice.
Kickbacks are alleged to have been paid by middlemen hired by Italian firm Finmeccanica to secure the Indian contract and they were allegedly in touch with former IAF Chief Air Chief Marshal S P Tyagi and three of his cousins for this purpose.
The Italian government probe alleges that the middlemen used three relatives of the former Air Chief Marshal SP Tyagi for influencing the deal by changing the key parameters for procuring 12 VVIP choppers.
The issue of bribery in the defence deal resurfaced after the arrest of Finmeccanica CEO Giuseppe Orsi and AgustaWestland CEO Bruno Spagnolini in Italy for paying kickbacks.
The investigation report suggests that the former IAF chief SP Tyagi had met the middlemen more than six to seven times and allegedly briefed them about the developments in the contract.
The government has already warned of legal action including the blacklisting of Finmeccanica if corruption allegations against it are proved.
The Ministry of Defence also decided to put on hold the receipt of the remaining nine of the 12 helicopters for which the Rs 3600 crore deal was struck in 2010.
With inputs from PTI