AgustaWestland Bribery Scandal: Ex-Indian Air Force Chief taken into custody

Why was SP Tyagi arrested on alleged bribery charges? The latest episode decrypted

Business & Politics

December 12, 2016

/ By / New Delhi



Former Air Force Chief, Shashindra Pal Tyagi, was arrested for his alleged involvement in a INR 4.5 billion AgustaWestland bribery case in procurement of 12 AW101 VVIP helicopters. He, along with his cousin, was sent to four-day Central Bureau of Investigation (CBI) custody this weekend. Here are the reasons and the context behind this last development in a big defense scam.

This is a shambolic discovery for the Indian armed forces as this is the first time ever that an ex-IAF chief has been arrested in a bribery scam. It not only shakes public confidence in high offices but also the integrity of the institutions.

The damage done to the institution was aptly summed up by the current IAF chief, Arup Raha, soon after Tyagi’s arrest last Saturday.

“Very unfortunate that such an episode has taken place. It does dent our reputation as a professional force, but we believe in the rule of law,” he lamented during a function in Kolkata.

What is the AgustaWestland deal?

AgustaWestland is a helicopter design and manufacturing company, and a wholly-owned subsidiary of Finmeccanica S.p.A (currently Leonardo-Finmeccanica). It was formed in July 2000 as an Anglo-Italian multinational company, when Finmeccanica and GKN merged their respective helicopter subsidiaries (Agusta and Westland Helicopters) to form AgustaWestland, with each holding a 50 pc share.

India signed a contract to purchase 12 AgustaWestland AW101 helicopters in February, 2010 for the Communication Squadron of the Indian Air Force to carry the president, prime minister and other VVIPs. Controversy over the contract came to light on February 12, 2013 with the arrest of Giuseppe Orsi, the CEO of Finmeccanica, AgustaWestland’s parent company by Italian authorities.

On February 13, 2013 the then Indian Defence Minister, AK Antony, ordered a probe into the contract. Since then it is being investigated by different Indian agencies.

Who is SP Tyagi?

Popularly known as ‘Bundle’, Tyagi was born in Indore, Madhya Pradesh on March 14, 1945. Tyagi, who joined the IAF on December 31, 1963, flew Gnats with No. 23 Squadron and Hunters of No. 27 Squadron. As a war veteran, he had participated in the 1965 and 1971 India-Pakistan wars. He is also a recipient of the Param Vishist Seva Medal (PVSM) in 2003. PVSM is awarded in recognition of peace-time service of the most exceptional order. He was also appointed as one of the honorary Aide-de-Camps (ADC) of the President of India, APJ Abdul Kalam, in 2003. Before he took over as the chief of IAF, he was commanding the Western Air Command of the air force.

Why was the ex-IAF chief arrested?

Along with Tyagi, his cousin Sanjeev and senior advocate, Gautam Khaitan were also arrested by the investigating agency.

The arrests have come about eight months after The Milan Court of Appeals (equivalent to an Indian high court) ruled that the AgustaWestland contract involved payoffs to Indian officials, including Tyagi.

This was a serious allegation and could not have been brushed aside.

Where is the scam?

So, what did Tyagi do to land in this soup and equally tarnish the office he once held?

A serious charge against the ex-IAF chief is that he influenced the IAF’s decision to tailor chopper specifications to suit Italian multi-national, Finmeccanica’s British subsidiary, AgustaWestland. The service ceiling or height of flying capacity was brought down from 6,000 metres to 4,500 metres, without taking into account the concerns of the Ministry of Defence.

Interestingly, a year before Tyagi headed the IAF, his predecessor Srinivaspuram Krishnaswamy had sent a note to the then defence secretary, in January 2004, saying a service ceiling of 6,000 metres was required as VVIPs needed to travel to high-altitude places, such as the Siachen glacier.

Later in November 2004, the air force reiterated its stand on the issue in a meeting held by the then defence secretary. However, this stand was reversed in March 2005, three months after Tyagi became IAF chief. Tyagi has to explain what prompted him to take this decision.

One wonders why Tyagi did what he did as it could have compromised the lives of the VVIPs as well as the airmen who flew in these helicopters.

In the court, Tyagi asserted that the decision to change the specifications of the helicopters was not his alone. The changes in requirements were suggested at a meeting in 2005, he added.

Secondly, Tyagi is said to have met AgustaWestland middlemen between 2004 and 2007, when he headed the IAF. Furthermore, Indian investigators point out that he had visited Italy thrice after his retirement.
He also met Georgio Zapa, Chief Operating Officer of Italian aerospace and defence group, almost three months after he became the IAF chief.

Thirdly, the bribes according to CBI were routed through multiple companies in India and abroad. It involved middlemen — British national, Christian Michel and Italian nationals, Guido Haschke and Carlo Gerosa.
Finmeccanica, AgustaWestland, Mohali-based IDS Infotech, Aeromatrix, IDS Tunisia and IDS Mauritius have also been named by the CBI.

Fourthly, the role of Tyagi’s three cousins — Sanjeev, Rajiv and Sandeep — popularly known as the Tyagi brothers, has surfaced in using the influence of their cousin for securing the deal.

Most importantly, Tyagi has to clear the link between the decision to lower the height of flying capacity and payments of EUR 326,000 to his cousins as consultancy charges by a Tunisian firm, Gordian Services, Sarl.
It is alleged that the payments were made between May 2004 and February 2005 by the Tunisian firm controlled by two accused — AW’s European middlemen Guido Haschke and Carlo Gerosa.

Tyagi and his family maintain that it has earned from agriculture as well. But, the CBI wants to now investigate the investment the family made into farm lands during SP Tyagi’s tenure as IAF chief. Probably for the right reasons the income from agriculture in India is neither accounted for nor taxed.

A political controversy?

The arrest of the ex-IAF chief is now snowballing into a political controversy. Peeved with continuous disruptions of the Parliament by the Opposition on several issues, BJP has asked both former Prime Minister Manmohan Singh and Congress Vice President, Rahul Gandhi to clarify as to who got the commissions and benefitted from them. The deal was signed and later cancelled during the UPA II.

Even as Tyagi’s story keeps news hounds busy, defence scams will continue to hit India which accounts for 14 pc of global arms imports.

“Good or bad procedure, defence scams take place irrespective of procedures or changes,” points out Amit Cowshish, former Financial Advisor (Acquisition), Ministry of Defence and a Distinguished Fellow with the Institute for Defence Studies and Analyses.

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