"A new request has been sent out to Rome seeking more details about the VVIP helicopters," sources told FE. Also, the MoD has issued a formal showcause notice to the company seeking cancellation of contract and taking other actions as per the terms of the contract and the integrity pact.
The ministry had already put on hold further payments to the company on Wednesday. "With today’s notice, the operation of the contract has been put on hold. The company has been asked to reply to the notice in seven days," ministry said in a statement.
On Thursday, India warned Italian firm Finmeccanica of legal action, including blacklisting, over corruption allegations in the VVIP chopper deal and asked them whether any slush money had been paid to fix the deal, which has led to a political uproar.
The MoD issued a detailed statement on the sequence of the $750-million deal for 12 AgustaWestland helicopters by the Italian firm's subsidiary, two days after a Central Bureau of Investigation (CBI) probe was ordered into the bribery charges.
The statement noted that the mandatory technical requirements of the helicopter were changed in the tender during the Vajpayee government in 2003, with the then national security adviser Brajesh Mishra playing a key role.
The MoD has asked the chief of AgustaWestland to "categorically state the clear position in view of the current developments indicating specifically if any financial transaction has taken place with any Indian individual/entity which would be violative of the integrity pact or any other terms and conditions of the contract".
It also cited the clauses of the integrity pact that was signed, noting that the contract bars paying of bribes or involvement of middlemen. The clause warned of "strict action including cancellation of contract, recovery of payment, blacklisting and penal action" against the vendors.
The defence ministry warned that the government is "determined to take all possible legal and administrative action against the guilty parties and accordingly has ordered a thorough probe by CBI".
The statement also said that the first request for the proposal was issued in March 2002, mandating 6,000 metres as the flying altitude for selection of the chopper.
* 2005-06: Carlo Gerosa and Guido Haschke, business partners based in Switzerland, approach AgustaWestland claiming they can help it with the Indian contract. Key contention that the technical requirements of the contract can be tweaked allegedly swung the deal.
* 2007: After the down selection of AgustaWestland for the contract along with an American contender, payments start funneling in from the consultancy contracts. At first they are small — ranging from Euro 111,000 to 286,987 — but over next few years swell up to an average of Euro 550,000 per month.
* 2011: An Agusta insider spills the beans to Italian investigators
* 2012: Italian prosecutors start filing cases. Name Indian players
* 2013: Finmeccanica CEO held, former IAF chief named as receiving bribes