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Former Air Chief SP TyagiFormer air chief Tyagi takes the hit even as AgustaWestland gets a breather

By Syed Nazakat

Former Air Chief Marshal S.P. Tyagi has had many firsts in his career. He was in the first batch of pilots selected for conversion on the Jaguar interdiction aircraft. He is one of the few officers to have had the distinction of commanding three Air Commands—Central, South Western and Western. He was the first Air Chief Marshal to travel to Pakistan for track-two negotiations to end dispute over the Siachen glacier. Now, he has a dubious distinction. He is the first air chief to be booked by the top investigating agency for alleged corruption and criminal conspiracy. The CBI believes that Tyagi misused his official position and received bribes through his cousins to swing the VVIP chopper deal in favour of AgustaWestland, a subsidiary of Finmeccanica of Italy.

The CBI’s case is that Tyagi, who was in office from 2004 to 2007, received kickbacks and altered the tender for the helicopters so that AgustaWestland would win the deal. The agency has frozen his bank accounts and those belonging to his cousins—Sanjeev alias Julie, Rajeev alias Docsa and Sandeep.

The bribery accusations against Tyagi have shaken many. “We knew him as a very competent military commander,” recalls an officer who served under him. “He is a veteran of the 1965 and 1971 wars. It is shocking that there are such grave allegations against him.”
The contract for the VVIP helicopters was signed in 2010 with the approval of the Cabinet Committee on Security, which is headed by the Prime Minister. The total contract for 12 VVIP helicopters was worth Rs3,600 crore; three have been delivered so far. According to the CBI, two middlemen, Christian Michel and Guido Haschke, received millions of euros from AgustaWestland for the deal through banks in Dubai, Italy and Switzerland. They then allegedly wired the money through Mohali-based IDS Infotech and Chandigarh-based Aeromatrix Info Solutions Private Limited to India, in the garb of engineering contracts with the two companies. What caught the attention of investigators was two dubious payments of 1,26,000 euros and 2,00,000 euros, which were allegedly traced to the accounts of Tyagi’s cousins. The investigators have referred to these remittances, among others, to allege that kickbacks were paid in the VVIP helicopter deal. Tyagi is accused of changing operational requirements of helicopters, including bringing down the service ceiling from 6,000m to 4,500m on becoming air chief designate in November 2004, allowing Agusta to enter the field.

Rejecting the allegations, Tyagi pointed out that the tender was changed in 2003, before he took over as Air Force chief, and that the deal was finalised and signed in 2010, three years after he retired. Interestingly, in February, the defence ministry said that, after an initial investigation, it had found no foul play in the purchase of the helicopters. A detailed statement from the defence ministry maintained that the technical specifications were changed prior to Tyagi’s tenure on the orders of then national security adviser Brajesh Mishra.

But Defence Minister A.K. Antony is convinced that “someone has taken money” in the deal. Since the case is with the CBI, he has decided to wait for the CBI report before taking any action against Finmeccanica and Tyagi. While the defence ministry has put on hold the delivery of nine of the 12 helicopters, it has not debarred AgustaWestland from participating in bids to procure choppers for Indian Navy and Coast Guard. AgustaWestland is one of the two companies to submit bids for supply of 55 helicopters. Last week, in a written reply to Parliament, Antony said the request for proposal for procurement of the Naval Utility Helicopter was issued before commencement of the CBI inquiry in the VVIP helicopter case. “Since no decision to debar the said company [AgustaWestland] from participation in the procurement process has so far been taken, the bids are under process,” Antony said.

Top executives from AgustaWestland are in Delhi to explain their position on the kickback allegations and its relationship with Tyagi, to the government. The defence ministry had issued a show-cause notice to the company asking it why the Rs3,600 crore contract should not be cancelled in the wake of the allegations.

THE WEEK, May 12, 2013

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