Under fire over allegations of kickbacks in the Rs 3,600 crore VVIP chopper deal, government on Wednesday asserted that nobody found guilty will be spared and if wrongdoings were found by the Central Bureau of Investigation, the contract can be scrapped.
"Nobody will be spared whatever may be the consequences," Defence Minister A K Antony told reporters on the alleged Italian chopper scam.
Another scam had unfolded with the arrest on Tuesday of the head of a state-controlled Italian aerospace company that is suspected of paying bribes of about Rs 362 crore in India to get orders for helicopters to ferry Indian VVIPs, prompting the government to order a CBI probe.
The ministry of defence also decided to put on hold the receipt of the remaining nine of the 12 helicopters for which the Rs 3,600 crore deal was struck in 2010.
Giuseppe Orsi, the head of Italian defence and aerospace giant Finmeccanica, was arrested on Monday in relation to a probe into international corruption.
He is suspected of involvement in the payment of bribes regarding the sale to the Indian government of 12 helicopters produced by Finmeccanica's subsidiary AgustaWestland.
Antony said CBI has been asked to give an early report on its probe into alleged kickbacks in the AgustaWestland helicopter deal.
"Once we get the preliminary inquiry report from CBI, strongest action will be taken against those found guilty," he said.
Asked about reports of the alleged role of former IAF chief SP Tyagi in the deal, the minister said, "I have no information."
"After the CBI report, we will take serious action that may include cancelling the deal," he said.
"We don't want to jump the gun. We can get our money back even at this stage," Antony said on the Rs 3,600 crore deal.
Asked whether the money paid to the Italian firm so far can be claimed back by the Indian government, Antony said, "If the Indian government paid any amount of the money, as per the provisions of the integrity pact, we can get back the entire money we paid to the vendor."
He mentioned that the Defence Procurement Procedure governing all defence deals takes care of the integrity pact by the foreign vendors.
"Not a single pie from the Indian government we will lose. As per the DPP, any contract beyond Rs 300 crore, before finalising the contract, the vendor will have to sign an integrity pact with the Government of India, agreeing to our conditions. If they violate that condition, they are liable to criminal action," he said.
The defence minister said companies are liable to be prosecuted and blacklisted for their lapses.
He referred to the actions taken by the government in such cases, where six foreign defence firms were blacklisted.
"I told you earlier that a CBI inquiry... after their first report, they recommended certain actions against companies. The moment we received the complaint, we did not hesitate, we blacklisted six companies. Out of that four are most powerful international companies," he said.
Antony stressed that tough action will be taken against the guilty, despite their stature.
"We are not bothered about who the companies are, how strong they are and how influential they are. But everything depends on the CBI inquiry. The moment we get a report from the CBI, whoever is found guilty, Indian or foreigners, we will take strongest action against them. They will have to pay the price for their lapses," he said.
Antony said the Indian government has been trying to get details from Italy since the beginning of the controversy around a year ago.
"After we saw reports, the Indian media reports of arrests and investigation going on in Italy, immediately we wrote to the Indian Ambassador in Italy to get the details from the Italian government and also the prosecutor who is conducting the inquiry," he said.
The second step, he said, was to involve the external affairs ministry to seek a report from governments of Italy and Britain.
"The second step (was) through the ministry of external affairs. Our government contacted the government of Italy and government of United Kingdom because AugustaWestland is a British company and major shareholder is British. MEA wrote to both the countries again," he said.
From the day one we have been trying to find the truth, Antony said, adding that the countries were specifically asked about alleged involvement of some Indian in the scam.
"Second report came on involvement of some Indian we again asked both the government is it true about this allegations. Is it true that Indians are involved," he said.
Asked whether the scam will impact other deals under consideration with AugustaWestland and Finmeccanica, Antony said such an action will depend on the result of CBI inquiry.
"Let CBI inquire this. Everything depends on CBI inquiry on this... We have already given this issue to the CBI. Let us see the progress of CBI inquiry. At any stage of the inquiry, if anybody is guilty, anywhere in the deals, they will have to pay the price," he said.
He said no time line has been fixed for the CBI to give its report.
On whether the Indian government will stop deliveries of the rest of the choppers, Antony said, "No options are closed. Let the CBI inqiry happen first."
Responding to a question that Special Protection Group had the final say in clearing the deal, despite some objections by the defence ministry, he said, "Initially Air Force and SPG, citing security reasons, they had recommended this case. Beyond that I cannot say anything at this moment. Everything is now with the CBI."
On whether former SPG Chief B V Wanchoo's name has also allegedly surfaced, Antony said, "At this moment I am not in the position to say anything about the details. Let the CBI inquire that. I don't want to say who is right who is wrong. I am not judge, I am not the investigating officer."
On the issue of senior retired military officials taking up consultancy jobs with defence firms, Antony said the policy needs a review.
"Government has a policy of re-employment of retired officials. That applies to all the officers, but we have to have a second look at this thing. I agree with you," he said.
Whether blacklisting of defence firms is narrowing options for Indian armed forces' modernisation, he said, "There may be some problems but because there may be some practical difficulties. We cannot ignore corruption. Whatever the consequences in any deal, if there is corruption, we will take action," he said.