Defence Minister A.K. Antony Wednesday pledged "strongest action" if it is proved that bribes swung the $750 million deal for 12 VVIP helicopters for the IAF, as the opposition prepared to raise a storm in parliament opening a week later.
Antony said the Central Bureau of Investigation (CBI) had been asked to conduct an early inquiry after Italian authorities arrested the head of Finmeccanica company on corruption charges.
"I can assure you that the moment we get a report from CBI, we will take strongest action provided in the integrity pact," Antony said. This would include "cancellation of the contract and blacklisting the companies".
"We are examining everything. If (contractual) terms have been violated, we will take the strongest action. We are not bothered about who they are or how big they are," Antony added.
The minister sought to downplay the alleged involvement of a former IAF chief, Air Chief Marshal S.P. Tyagi, during whose tenure the AgustaWestland deal was negotiated.
Tyagi also denied any wrongdoing after a preliminary inquiry report filed by prosecutors in Italy Tuesday sought to link him to the corruption charges.
"The charge I was bribed to tweak a change in requirement to suit (AgustaWestland)... Changes are not made by the Air Headquarters... Final changes have to be approved by the minister of defence," he said.
"Air Headquarters can recommend it. But to the best of my knowledge Air Headquarters have not recommended any changes. I am shocked... I have no clue what this is all about."
He said the deal had been sealed three years after he retired from the air force in 2007 and denied the changes to the tender requirements had happened during his time in the job.
Tyagi also said that the "staff qualitative requirements for the VVIP choppers were frozen in 2003 much before he assumed the office of Chief of Air Staff, and the IAF did not change any requirements after that" - a reference to the time when the Bharatiya Janata Party was in power.
The defence minister also denied the suggestion that the IAF's original requirements were modified to suit the Italian firm. "The recommendation was made by the IAF and the SPG on security considerations."
The contract for the helicopters was signed in February 2010. The IAF sought the choppers as a replacement for its Mi-17 cargo helicopters which had been modified for VVIP deployment.
External Affairs Minister Salman Khurshid said "if the CBI required any assistance from the government ... directly or through courts, (it) will ask for it and we would respond".
The Congress welcomed the CBI probe, with party leader Digviyaja Singh saying the deal had been initiated when the BJP headed the central government.
The opposition party compared the scandal to the bribery charges made when India agreed to buy Sweden's Bofors artillery guns, allegations which led to the election defeat of Prime Minister Rajiv Gandhi in 1989.
The BJP also questioned the delay in ordering a probe into the purchase of the helicopters and said they would take it up in parliament when it meets for the budget session Feb 21.
"I see the making of another Bofors in this," BJP spokesman Ravi Shankar Prasad said.
He asked why the government had not launched an investigation earlier despite the details of the Italian prosecution case, including suspects' names, being published by the media earlier.
"The suspicious circumstances surrounding this raises one fundamental question again - the fact that it was an Italian company, was it the grounds to go slow?"
Khurshid denied the helicopter purchase could be compared with the Bofors saga.
"Those who say this is another Bofors will please provide me the final conclusion of the Bofors, including the Supreme Court judgment, and I would say you are right," he said.
Antony said the Central Bureau of Investigation (CBI) had been asked to conduct an early inquiry after Italian authorities arrested the head of Finmeccanica company on corruption charges.
"I can assure you that the moment we get a report from CBI, we will take strongest action provided in the integrity pact," Antony said. This would include "cancellation of the contract and blacklisting the companies".
"We are examining everything. If (contractual) terms have been violated, we will take the strongest action. We are not bothered about who they are or how big they are," Antony added.
The minister sought to downplay the alleged involvement of a former IAF chief, Air Chief Marshal S.P. Tyagi, during whose tenure the AgustaWestland deal was negotiated.
Tyagi also denied any wrongdoing after a preliminary inquiry report filed by prosecutors in Italy Tuesday sought to link him to the corruption charges.
"The charge I was bribed to tweak a change in requirement to suit (AgustaWestland)... Changes are not made by the Air Headquarters... Final changes have to be approved by the minister of defence," he said.
"Air Headquarters can recommend it. But to the best of my knowledge Air Headquarters have not recommended any changes. I am shocked... I have no clue what this is all about."
He said the deal had been sealed three years after he retired from the air force in 2007 and denied the changes to the tender requirements had happened during his time in the job.
Tyagi also said that the "staff qualitative requirements for the VVIP choppers were frozen in 2003 much before he assumed the office of Chief of Air Staff, and the IAF did not change any requirements after that" - a reference to the time when the Bharatiya Janata Party was in power.
The defence minister also denied the suggestion that the IAF's original requirements were modified to suit the Italian firm. "The recommendation was made by the IAF and the SPG on security considerations."
The contract for the helicopters was signed in February 2010. The IAF sought the choppers as a replacement for its Mi-17 cargo helicopters which had been modified for VVIP deployment.
External Affairs Minister Salman Khurshid said "if the CBI required any assistance from the government ... directly or through courts, (it) will ask for it and we would respond".
The Congress welcomed the CBI probe, with party leader Digviyaja Singh saying the deal had been initiated when the BJP headed the central government.
The opposition party compared the scandal to the bribery charges made when India agreed to buy Sweden's Bofors artillery guns, allegations which led to the election defeat of Prime Minister Rajiv Gandhi in 1989.
The BJP also questioned the delay in ordering a probe into the purchase of the helicopters and said they would take it up in parliament when it meets for the budget session Feb 21.
"I see the making of another Bofors in this," BJP spokesman Ravi Shankar Prasad said.
He asked why the government had not launched an investigation earlier despite the details of the Italian prosecution case, including suspects' names, being published by the media earlier.
"The suspicious circumstances surrounding this raises one fundamental question again - the fact that it was an Italian company, was it the grounds to go slow?"
Khurshid denied the helicopter purchase could be compared with the Bofors saga.
"Those who say this is another Bofors will please provide me the final conclusion of the Bofors, including the Supreme Court judgment, and I would say you are right," he said.