Rome: Italian police on Tuesday arrested the chief executive of aerospace and defence giant Finmeccanica for corruption and embezzlement in relation to alleged bribes given to the Indian government, media reports said.
Giuseppe Orsi had been under investigation for months and had denied any wrongdoing in the deal for the sale of 12 AgustaWestland helicopters to India in 2010. Watch: Finmeccanica's CEO held on corruption charges
Meanwhile, the Defence Ministry ordered CBI probe into VVIP chopper deal after the arrest of the head of Italian firm Finmeccanica on charges of bribery.
The magistrate in the case also issued an order for the head of AgustaWestland, Bruno Spagnolini, to be put under house arrest.
Two suspected intermediaries in the bribes who reside in Switzerland have also been targeted with extradition requests, Italian media reported.
Finmeccanica is not the only Italian industrial giant under investigation.
Prosecutors last week announced they were looking at Paolo Scaroni, chief executive of energy major ENI, over allegations of bribes paid to Algerian officials to win contracts there.
Italy's third largest bank, Banca Monte dei Paschi di Siena, has also been shaken by a series of investigations over mismanagement that has forced it to seek a public bailout.
The contract was signed in 2010; three of the helicopters have already been delivered to India.
Finmeccanica statement
With reference to the precautionary measures issued today towards the Chairman and CEO of Finmeccanica and the CEO of the controlled Company AgustaWestland, Finmeccanica confirms that the operating activities and ongoing projects of the Company will continue as usual.
In addition, Finmeccanica expresses support for its Chairman and CEO, with the hope that clarity is established quickly, whilst reaffirming its confidence in the Judges.
Chopper deal scam: Italy asked for information
India has asked Italy for information about allegations of corruption in the $749.2 million Indian helicopter contract with Italian firm Finmeccanica following the arrest of the defence giant's chief.
"The Indian mission in Rome has asked the Italian government for information they have on the matter; but there has been no response so far," Indian external affairs ministry spokesman Syed Akbaruddin told reporters on Tuesday.
Akbaruddin said they were informed by Italy that "there it is a judicial process involved", and "no information has been shared by Rome on the issue".
Key facts related to AugustaWestland chopper deal:
AugustaWestland, won a government contract to build choppers after it edged out Sikorsky’s S-92 Superhawk.
The new helicopters were being procured to replace the ageing Russian-made Mi-8 helicopters.
According to reports in an Italian daily 'La Repubblica', slush funds (a reserve of money used for illicit purposes) were generated after a "sudden" escalation of price by 10 million euros in 2010.
The Indian Air Force has received the first two of the 12 three-engined AW 101 helicopters, procured at the cost of Rs 3,550 crore for ferrying VVIPs like the President and the Prime Minister in December 2012.
India had signed a Rs 3,550 crore deal in 2010 with the Anglo-Italian firm Agusta Westland for buying 12 of these three-engined choppers.
Watch: Finmeccanica's CEO held on corruption charges
