PwC scanned Agusta books, called for probe into Michel deal

A year before Italian helicopter manufacturer AgustaWestland invited Indian authorities to examine its books in connection with the VVIP helicopter contract with India, international audit firm PriceWaterhouseCoopers (PwC) had already done that and noted irregularities in the contract, it has emerged.

PwC had got into the picture after the UK subsidiary of the helicopter manufacturer insisted on it, following reports of the investigation into corruption charges. Going through AgustaWestland's accounts, the audit firm found several irregularities in the company's contracts with alleged middleman Christian Michel. It had wanted an external law firm hired for an investigation.

As reported earlier, Michel bagged 30 million euros from two controversial contracts with the company in 2010, one for managing "hostile media" in India and the other for buying back faulty WG 30 helicopters from Pawan Hans as a goodwill gesture to New Delhi.

Documents accessed by The Indian Express reveal that Italian investigators believe that the company did hire an external lawyer for a "deep" audit into the Michel link, but that he was replaced with another expert as the report he gave had "a different line from the one that the management had hoped for".

"PwC found irregularities in AgustaWestland contracts and wanted deep investigations, to be done with experts external to the company," Italian investigators have noted in an internal inquiry report, adding that arrested CEO Orsi had "excessive power" and imposed unjust guidelines for internal audits to hide any signs of irregularities.

While the helicopter company repeatedly told the Indian government that no evidence of wrongdoing had been found in several internal checks and has assured that the records are clean, Italian investigators believe the firm deliberately buried a report by the external law agency that pointed to underhand dealings.

Because of the insistence of PwC on hiring an external lawyer, the company roped in international corruption expert Eoin O'Shea to examine the contract as well as the dealings with Michel. However, the expert, investigators believe, was replaced as his report on the Michel link raised uncomfortable questions.

... contd.

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