Defence procurements from the Italian company Finmeccanica and its affiliate firms were put on hold by the Union Government on 5 August 2014. The action was taken in wake of the alleged chopper scam.
The notification issued in two separate circulars issued by the Department of Defence and the Department of Defence Production said that all procurements/acquisition cases which were in the pipeline with the Finmeccannica group of companies including its subsidiaries and affiliates should be put on hold.
The circulars also asked all the three services along with Public Sector Units, Ordnance Factory Board and other concerned departments for strict compliance.
Apart from this, the departments has also been advised by the Defence Ministry to stop all and any kind of dealings with the firms those were named in the VVIP chopper scam FIR, namely AgustaWestland, IDS Tunisia, IDS Mauritius, IDS Infotech, Mohali and Aeromatrix Solution Limited, Chandigarh.
At present, Finmeccannica group company Selex is involved in programmes such as the Indigenous Aircraft Carrier with its radars. Till now 300 sets of high frequency communication systems has been supplied by Selex to the Navy and it is in line to supply precision approach radars for enabling landing of military aircraft in bad weather.
Earlier, the Union Government decided to go slow on defence deals with Finmeccannia group after the chopper scam surfaced. But this is the first incident, when a decision to put on hold the deals with the Finmeccannica group has been taken.
Both these circulars have been issued after Modi government took over. Narendra Modi took oath of his office as the 15th Prime Minister of India on 26 May 2014.
Finmeccannicca is the parent firm of AgustaWestland, the firm that is accused of paying kickbacks for a deal of 3600 crore rupees under which it was supposed to supply 12 VVIP choppers to Air Force. The kickbacks paid was over 360 crore rupees and that’s why the deal has been scrapped.
Who: Union Government
When: 5 August 2014