VVIP chopper scam: All you need to know about Christian Michel and the AgustaWestland case

With the Rafale row and fuel price hike compounding troubles of the current dispensation, you are a lot likely to hear more about AgustaWestland case. Here is all you need to know.

FP Staff September 19, 2018 10:34:50 IST
VVIP chopper scam: All you need to know about Christian Michel and the AgustaWestland case

With a UAE court ordering the deportation of Christian Michel, the alleged middleman in the Rs 3,600-crore AgustaWestland VVIP chopper scam, Indian investigating agencies are likely to now focus on the political links to the alleged scam, if any.

The Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) probing the case had alleged that Michel received €30 million (around Rs 225 crore) as kickbacks from AgustaWestland to broker a deal with Indian authorities. Names of around three dozen individuals and companies, including former air chief SP Tyagi and his cousins, have been mentioned in the case. Meanwhile, more recently, names of UPA chairperson Sonia Gandhi, former prime minister Manmohan Singh, and Congress leader Ahmed Patel were also dragged in.

However, Michel later claimed he was forced to take Sonia and Manmohan's name by Indian investigative agencies.

The case, which dates back to the final years of the 10-year-long UPA rule, had become a major embarrassment for the Congress-led government heading into elections under a cloud of corruption scandals.

With the Rafale controversy, falling rupee prices and fuel price hike compounding troubles of the current dispensation, you are likely to hear more about this case, especially in view of Michel's deportation ordered by the Dubai court. Here is all you need to know about the case:

VVIP chopper scam All you need to know about Christian Michel and the AgustaWestland case

What is the AgustaWestland VVIP chopper case?

The scandal relates to a 2010 deal, inked by the then Congress-led UPA government, to supply 12 AW101 helicopters for the Indian Air Force for Rs 3,600 crore. These choppers were supposed to be used for flying the President of India, the Prime Minister, and other such VVIPs.

However, the scent of a scandal was first picked up in Italy in 2013. The Italian authorities were first to allege that kickbacks worth Rs 40 million had been paid to Indian officials to grease contracts favouring debt-laden State-controlled Finmeccanica, through its Britain-based subsidiary AgustaWestland. The country's authorities  arrested Giuseppe Orsi, the head of Finmeccanica and Bruno Spagnolin chief of AgustaWestland, for alleged financial irregularities and corruption in procuring the deal with India.

The following day, then defence minister AK Antony ordered a probe into the matter, which ultimately led to the deal being shelved on 1 January, 2014.

"Yes, corruption has taken place in the helicopter deal and bribes have been taken. The CBI is pursuing the case very vigorously," Antony had said in March 2013.

Who is Christian Michel?

Michel, a British businessman, is one of three main middlemen — along with Guido Haschke and Carlo Gerosa — who allegedly greased their way through the Indian bureaucracy and air force circles to broker the deal.

On paper, Michel had a €18.2 million contract to buy back discarded WG 30 choppers from India, a €6 million deal for servicing VVIP choppers and a €12 million contract to supply spares and parts for naval choppers, according to Economic Times.

However, According to a Firstpost report, Italian investigators named Michel as the key intermediary between AgustaWestland and the Indian middlemen involved in the deal. According to Italian court documents, Michel handled €18 million of the total kickback of €30 million. An Italy court, hearing the matter also noted that the payments made to Michel were grossly disproportionate to the work he promised to do for the company.

The Firstpost report further reveals that although it was suggested that although it is suggested Michel got involved in the deal towards the end of 2006, he had actually been working on it since 2002 when the first global Request for Proposal (RFP) for choppers was issued (March 2002).

Michel was arrested in February 2017 by the UAE authorities and was facing prosecution there as several investigations revealed that he rerouted bribes to India through his Dubai-based firm Global Services. The ED investigation found that Michel made remittances through Global Services to a media firm he floated in Delhi, along with two Indians. This money was actually the funds he got from AgustaWestland to broker the deal.

Although it was not immediately clear if the UAE court order can be challenged or if there are other means for Michel to escape extradition, if Michel's extradition actually takes place, then investigating agencies can probe his alleged connection with Indian politicians, air force officers and other middlemen.

Former IAF chief SP Tyagi's involvement

Early in 2014, the Italian court investigating the chopper scam named former chief of the IAF, SP Tyagi in the scam, stating that he was bribed by Finmeccanica to sign the deal with AgustaWestland.

The IAF had urged the defence ministry to purchase helicopters capable of flying in high-altitude areas like Siachen and Tiger Hill.  However, after careful evaluation of the AW101, it was ascertained that it was not capable of flying at 6,000 metres above sea level as was warranted necessary in the initial specifications outlined for the procurement of choppers.

The ED, in its chargesheet alleged, that the three middlemen "managed to" make inroads into the IAF to influence the stand of the officials into reducing the service ceiling of the helicopters from 6,000 metres to 4,500 metres in 2005. AgustaWestland became eligible to supply the dozen helicopters for VVIP flying duties after this change.

The alleged middleman in the deal, Guido Haschke, revealed that while AW101 did not meet the technical requirements of the IAF, the deal was signed after Haschke tweaked the contract with the help of his Indian contacts.

AgustaWestland allegedly paid €30 million in bribes, of which €20 million was routed through Haschke and Carlo Gerosa. A CBI report that came in later said that prior to Tyagi's appointment as Air Force chief, the IAF had "vehemently opposed" lowering of the altitude requirement. This changed after Tyagi came into the picture and the IAF conceded to reduce altitude requirements, allowing AgustaWestland to re-enter the bidding process.

Initial investigations by the Italian prosecutor said that Tyagi had personally met Haschke before and that the bribery took place via Tyagi's cousins Julie, Sandeep and Dosca. Tyagi, however, has denied any claims of having met Haschke.

The Milan Court of Appeals again mentioned Tyagi's name while pronouncing its judgment. "In the absence of contrary indications, it must be concluded that the reward bestowed to Tyagi's family for their work in support of AW in relation to the race of the Government (of) India for military helicopters amounts to €10,500,000."

The CBI has also alleged that the AgustaWestland managed to introduce a comparative flight trial with non-functional engine and eventually succeeded in getting the contract for supply of 12 AW-101 VVIP helicopters from the Defence Ministry mainly due to softening of the IAF on service ceiling after SP Tyagi took over as its chief.

In 2015, however, reports of Tyagi’s acquital by the Italian court appeared, stating that there was no corruption by Indian officials. Currently on bail, he is still under investigation by Indian authorities.
Why and how did Sonia, Congress leaders' names crop in ?

Sonia's name was dragged into the deal, when a Milan court mentioned the conversations between the three middlemen mentioning a 'Mrs Gandhi'. The middlemen had allegedly referred to a 'Mrs Gandhi' as being the driving force behind the deal. They also mentioned names of her close aides Ahmed Patel and Pranab Mukherjee.

In a letter dated 15 March, 2008, Christian Michel wrote to Peter Hulet, the then head of India region sales and liaison for AgustaWestland, saying, "Dear Peter, since Mrs Gandhi is the driving force behind the VIP, she will no longer fly with MI8. Mrs Gandhi and her closest advisers are the aim of the High Commissioner, senior adviser Prime Minister Manmohan Singh obviously the main figure, then there's Ahmed Patel Secretary."

However, the Congress has vehemently denied these charges. In July 2018, after he was granted bail in Dubai, Michel retracted his statement against the Congress leader and said that he had named Sonia and senior Congress leaders on the behest of the CBI. He had accused Indian investigators of pressuring him to frame the Congress leaders in return for a clean chit in the multi-crore scam — a charge the CBI has refuted.

The investigative agency claims that it has never examined Michel as a witness and hence, could not have manipulated or pressurised Michel.

With inputs from PTI

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