The CBI has filed a supplementary charge sheet in the Rs 3,600-crore AgustaWestland helicopter procurement scam against former Defence Secretary Shashi Kant Sharma and four Indian Air Force personnel. Sharma later also served as Comptroller and Auditor General of India. He is probably the first CAG to have been charge-sheeted in a bribery case.
The agency filed the charge-sheet before a special court in Delhi after getting the sanction from the Government to prosecute Sharma, who was the Defence Secretary between 2011 and 2013 before serving as the CAG from 2013-2017.
Sharma also served as Joint Secretary (Air) in the Defence Ministry between 2003 and 2007. He is alleged to have been instrumental, along with other accused IAF officials, in reducing the requirement of service operational ceiling of the helicopters to accommodate AgustaWestland which was otherwise ineligible to participate in the tendering process. Besides this, he also allegedly allowed testing of a different model of AgustaWestland helicopter on foreign soil, sources said.
Besides Sharma, the CBI has named then Air Vice Marshal Jasbir Singh Panesar (now retired), deputy chief test pilot SA Kunte, the then Wing Commander Thomas Mathew and Group Captain N Santosh, officials said. Kunte and Santosh retired as air commodores.
Earlier, the CBI had also sought a nod from the Defence Ministry to prosecute these Air Force officials and the charge sheet comes after getting the requisite sanction, they said.
The case pertains to alleged bribery to swing a deal to procure 12 VVIP helicopters in favour of AgustaWestland which was ineligible as its helicopters did not meet the 6,000-meter operational ceiling parameter set by the Indian Air Force (IAF).
The need for new helicopters to ferry VVIPs -- the President, the Prime Minister, the Vice President and the Defence Minister -- was felt in 1999 when a proposal was moved to replace the fleet of Soviet-era Mi8s of the IAF.
The CBI has accused then IAF Chief S P Tyagi of recommending a reduction in the operational ceiling (maximum height at which a chopper operates) of the helicopters from 6,000 meters to 4,500 meters which brought AgustaWestland into the race, the CBI has alleged.
The IAF was strongly opposed to the changes but when Tyagi became the chief, he recommended it, the agency has alleged.
This was allegedly done at the behest of Finmeccanica and AgustaWestland top executives who engaged the services of three middlemen -- Christian Michel, Guido Haschke, and Carlos Gerosa -- who allegedly paid bribes to Tyagi and his cousins Rajiv, Sandeep and Julie, according to the CBI.
The agency has alleged that Michel’s firms received about 42.27 million Euros, approximately seven percent of the deal amount, from the companies as kickbacks to swing the Rs 3,600-crore deal in their favour.
The bribes were allegedly routed through the companies of Michel and an advocate, Gautam Khaitan, in the form of multiple contracts through layered transactions to camouflage the payments and portray the bribes as genuine business deals.
The first chargesheet in the case was filed in September 2017 naming former IAF chief Tyagi and others followed by another chargesheet in September 2020 against Michel and others.
On November 19, 2003 a meeting was taken by Principal Secretary to the Prime Minister on the VVIP chopper procurement issue followed by a letter dated December 22, 2003 from the Principal Secretary to the PM to the Air Chief, stating that it was unfortunate that neither PMO nor SPG was consulted while framing these mandatory requirements.
He suggested that the Chief of Air Staff and Defence Secretary may jointly review the matter to draw up realistic mandatory requirements satisfying operational, security and convenience requirements of VVIPs and also set in motion a fast track process for selection and acquisition of the replacement helicopters.
In pursuance of the PMO, the operational requirements (ORs) were deliberated at length between IAF, NSA, SPG/PMO, and MoD between March 2005 to September 2006 and certain changes, including the service ceiling were incorporated.
The required number of helicopters for the entourage of VVIP was further deliberated between Air HQ, MoD and SPG/PMO. The number of helicopters proposed for procurement was revised from 8 to 12 helicopters by adding four helicopters in non-VIP configuration for security reasons.
The sanction for the procurement of 12 helicopters was accorded by the Defence Acquisition Council under ‘Buy’ category with 30 per cent offsets on January 3, 2006. Request for proposal (RFP) was issued to six vendors on September 27, 2006.
Three vendors, namely Sikorsky, USA (S-92 helicopter), AgustaWestland, UK (EH-101 helicopter) and Rosoboronexport, Russia (Mi-172 helicopter) responded to the RFP.
Rosoboronexport did not submit earnest money deposit and the Integrity Pact, along with their Technical and Commercial proposals. It had been made clear to Rosoboronexport in February 2007 that this was a global tender and hence every contractual clause would be the same for all vendors. As no Integrity Pact and Earnest Money Deposit were received from Rosoboronexport, their Techno-Commercial offer was not accepted.
Following this, the Technical Evaluation Committee evaluated the technical proposals of Sikorsky and AgustaWestland and recommended field evaluation trials of their helicopters.
The Field Evaluation Trial of AgustaWestland was carried out in the UK and trials of Sikorsky were carried out in the USA from January 16, 2008, to February 2008. The Field Evaluation Trial team submitted its report in April 2008 and recommended the AW-101 helicopter of AgustaWestland for induction into Service. SPG was also part of the Field Evaluation Trial team.
The Staff Evaluation Report of Air Headquarters concluded that Sikorsky’s S-92 helicopter was non-compliant with respect to four qualitative requirements for the VVIP helicopter (Missile Approach Warning System, Service Ceiling of 4.5 km, Drift Down Altitude and Hover Out of Ground Effect).
The Staff Evaluation Report assessed the VVIP helicopter AW-101 to be fully compliant with all the requirements.
Following the scandalous nature of the deal, it was scrapped in 2013.