India’s attorney general, Goolamhussein Essaji Vahanvati, ruled last week that AgustaWestland breached contractual obligations and an associated “integrity pact” in winning a $787 million contract to supply 12 AW101 VIP helicopters to the Indian Air Force (IAF) in 2010, raising the possibility the government will cancel the deal.
The corruption trial of former AgustaWestland CEOs Giuseppe Orsi and Bruno Spagnolini is set to resume this month, with defense lawyers prepared to call an international witness list of top government officials and industry leaders. The men are charged with orchestrating bribes in connection with the sale of 12 AW101s to the government of India in 2010 when Orsi was CEO of Finmeccanica unit AgustaWestland and Spagnolini was his deputy.
The European Union has been criticized in the past for being slow with regards to reforming its own transparency regime, creating a negative impact on the credibility of European companies. Finmeccanica (Chalet A232, Static C65) has made a head start with its compliance program, which focuses on trade controls for sensitive transactions and business ethics, said Walter Vasselli, senior compliance officer for the Italian company.
Recently reorganized Selex ES has come to Paris to show off its varied capabilities in the defense and security electronics sector as part of the wider Finmeccanica presence. Selex ES (Chalet A232) is highlighting its ISR, radar and defensive systems, which range in size from unmanned air vehicles to compact sensors.
If you look closely at the exhibits of the major aerospace and defense companies here this week, you will likely notice some unexpected capabilities on display. With their traditional defense businesses threatened by declining budgets, many of these companies are exploring “adjacent markets.”
This trend started with offers in the security and IT realms. But now they are extending to other areas, such as energy, environment and climate; food and water security; and natural disaster protection and response.
Selex ES is attending its first Paris Air Show since its formation on January 1 from three separate companies–Selex Galileo, Selex Elsag and Selex Systemi Integrati, under parent company Finmeccanica. The new entity has three divisions, Air and Space Systems; Land and Naval Systems; and Security and Smart Systems, all three being supported by a common operations/engineering function.
Though its parent company Finmeccanica yesterday reported €786 million in losses last year, subsidiary AgustaWestland posted strong 2012 results that included revenues of €4.2 billion, new orders of €4 billion and an accumulated backlog of €11.87 billion, as well as earnings before interest, taxes and depreciation of €473 million. The helicopter manufacturer’s results reflected marginally improved results over its 2011 performance and also reflected a slight increase in research and development spending, to €506 million.
AgustaWestland and Embraer have terminated joint-venture discussions for helicopter production in Brazil. The companies issued a joint statement yesterday announcing the decision, but declined to provide reasons why talks collapsed.
AgustaWestland’s new CEO, Daniele Romiti, met the press here at Heli-Expo Monday night just days after his appointment by parent company Finmeccanica.
AgustaWestland has said it expects to be cleared of bribery allegations relating to an Indian government order for 12 AW101 VIP helicopters. At press time, the Italian-UK joint venture was responding to questions from the Indian defense ministry in relation to a “show cause notice” that could result in the cancellation of the $750 million contract. It had until February 22 to answer these questions.
- Page 1