Italian police arrest Finmeccanica chief
By Guy Dinmore in Rome
Police arrested Giuseppe Orsi, chairman and chief executive of Italian defence group Finmeccanica, and the head of its AgustaWestland helicopter unit, as part of an investigation into alleged corruption involving a €560m sale of helicopters to India, a Finmeccanica official said.
Two Swiss intermediaries alleged to have been involved in the deal have also been arrested, added the company official, who asked not to be named. Mr Orsi was arrested at his home before dawn on Tuesday, while Bruno Spagnolini, head of the helicopter subsidiary, had been placed under house arrest, the official said.
Finmeccanica employees said they had been stunned to learn of the arrest of Mr Orsi, who had been carrying out a clean-up and restructuring of the company following a spate of corruption probes dating back to 2011.Officers of the Carabinieri police were searching the Rome headquarters of Finmeccanica on Tuesday morning, company staff said. Police were also searching Milan offices of Finmeccanica, a company official said.
Trading in Finmeccanica shares was suspended at the opening of the Milan stock market. The shares had been down as much as 13.5 per cent, media reported. Later on Tuesday morning the shares were down 8.4 per cent at €4.36.
Mr Orsi, who was head of AgustaWestland at the time of the 2010 sale of 12 helicopters to India, was informed early last year that he was under investigation on suspicion of money laundering and bribery in connection with the sale. He denied the allegations and denied using intermediaries in the deal. The first helicopters were due to have been delivered late last year.
Last April, Italian prosecutors and Swiss authorities searched the offices in Lugano of Guido Ralph Haschke, a Swiss businessman reported to be under suspicion of receiving €51m from Mr Orsi in his role as “mediator” in a contract to sell the AW 101 helicopters. Mr Haschke was not immediately available for comment.
At the time of the initial allegations, Mr Orsi also denied media reports that €10m had been paid to a second “intermediary” for the Northern League, the Milan-based rightwing party. Party officials denied taking any money from Finmeccanica.
Prosecutors in Naples opened the probe into Mr Orsi last year following allegations by Lorenzo Borgogni, Finmeccanica’s former director of external relations who is under investigation for corruption. Company officials have portrayed Mr Borgogni’s allegations as a personal vendetta against Mr Orsi, who dismissed him in 2011. Mr Borgogni has denied wrongdoing.
Mr Orsi was appointed chairman of Finmeccanica in December 2011 in one of the first acts of Mario Monti’s technocrat government in response to corruption investigations involving Pier Francesco Guarguaglini, the previous chairman, and his wife Marina Grossi, head of a Finmeccanica subsidiary.
Ms Grossi resigned in early 2012. She and Mr Guarguaglini both denied allegations of creating slush funds through false accounting and rigged contracts with Enav, Italy’s civilian air traffic controller.
India’s defence ministry was reported to have dropped its own investigation into the helicopter contract early last year.
In an interview with Rai, the state broadcaster, after the news of the arrests, Mr Monti said: “There is a problem with the governance of Finmeccanica at the moment and we will face up to it.”
Appointed prime minister in November 2011, Mr Monti is running for office in general elections on February 24-25, with various corruption investigations becoming a major campaign issue.
Prosecutors are probing alleged fraud and other financial crimes at Monte dei Paschi di Siena, Italy’s third-largest bank by assets, and last week Paolo Scaroni, head of state-controlled energy group Eni, was informed he was under investigation for suspected bribery involving contracts in Algeria. Mr Scaroni denied the allegations.
12 February 2013 Last updated at 06:02 ET
Finmeccanica’s Giuseppe Orsi held on corruption charges
The chief executive of Italian aerospace and defence firm Finmeccanica has been arrested on corruption charges.
Giuseppe Orsi has been under investigation for embezzlement for several months. He has always denied any wrongdoing.
Prosecutors allege he profited illegally from the sale of 12 helicopters to India.
Finmeccanica shares slumped in Milan after initially being suspended.
In a statement, Finmeccanica expressed solidarity with Mr Orsi and said: “Finmeccanica confirms that management activity and the initiatives it has undertaken are continuing in an orderly fashion.”
Italy’s Prime Minister, Mario Monti, said in an interview with Italian television: “Magistrates will do their work. I’m sure they will do it thoroughly and in the best way possible.”
He added: “There is a problem with the governance of Finmeccanica at the moment and we will face up to it.”
Arrest warrants have been issued for two people living in Switzerland.
India’s foreign ministry said it had not been informed of the raid.
“We had asked the government of Italy through our mission in Rome for details of the investigation, but were told that it is a judicial process and the government of Italy is unable to share any information,” said foreign ministry spokesman Syed Akbaruddin.
“That remains the position even today.”
For Italy, it is the latest in a string of corporate scandals – including risky trades at the bank Monti Paschi di Siena and allegations of bribery at the oil services group Saipem.
Mr Orsi was in the process of overhauling Finmeccanica to try to make the company profitable again. The Italian government owns about 30% of the company.
AugustaWestland deal: Finmeccanica CEO Giuseppe Orsi arrested for paying bribes to sell choppers to India
Earlier a report on the online version of Corriere della Sera newspaper said Finmeccanica Chief Executive and Chairman Giuseppe Orsi had been arrested for bribes allegedly paid to secure the sale of 12 helicopters to India.
A spokesman for Finmeccanica was not immediately able to comment.
The source said that three other people had been placed under house arrest as part of the probe, including the Chief Executive of Finmeccanica helicopter unit AgustaWestland, Bruno Spagnolini.
Orsi has always denied wrongdoing over a corruption probe looking at a 560 million euro ($749.2 million) Indian helicopter contract.
State-controlled Finmeccanica has previously said it has always done business in India through official channels.
Italy’s corporate class has been shaken recently by a series of corruption cases, notably a derivatives scandal at Banca Monte dei Paschi and an alleged bribery case involving oil service group Saipem.
The latest series of scandals have become an issue in Italy’s campaign for parliamentary elections to be held on February 24-25.
- TUESDAY, 12 FEBRUARY 2013 15:50
- AFP | ROME
- HITS: 11
Italian police today arrested the chief executive of aerospace and defence giant Finmeccanica for corruption and embezzlement in relation to alleged bribes given to the Indian government, media reports said.
Giuseppe Orsi had been under investigation for months and had denied any wrongdoing in the deal for the sale of 12 AgustaWestland helicopters to India in 2010.
The magistrate in the case also issued an order for the head of AgustaWestland, Bruno Spagnolini, to be put under house arrest.
Two suspected intermediaries in the bribes who reside in Switzerland have also been targeted with extradition requests, Italian media reported.
Finmeccanica is not the only Italian industrial giant under investigation.
Prosecutors last week announced they were looking at Paolo Scaroni, chief executive of energy major ENI, over allegations of bribes paid to Algerian officials to win contracts there.
Italy’s third largest bank, Banca Monte dei Paschi di Siena, has also been shaken by a series of investigations over mismanagement that has forced it to seek a public bailout.