The Indian VVIP Helicopter Deal

Aaron Steinberg - December 2, 2020 (updated September 29, 2022)


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Corruption is a persistent problem in Indian arms procurement, on both a petty and a grand scale. In the case of the 12 VVIP (Very Very Important Person) transport helicopters bought from AgustaWestland in 2010, however, the result of the corruption was not just extra costs for the Indian taxpayer, but a helicopter unable to fly at the high altitudes required to traverse the Himalayas. Using a network of agents, AgustaWestland won the bid by bribing Indian officials to swing the deal, and probably in particular to manipulate the tender specifications in their favour.

Unusually in such cases, the corruption has been openly acknowledged, and led to the prosecution of senior officials in the exporting country: The CEOs at the time of AgustaWestland, and of its parent company Finmeccanica, were convicted of corruption in 2016, although the sentence was suspended by Italy’s highest court, the Court of Cassation. Meanwhile, India cancelled the contract and successfully recovered the money they had already paid. However, so far no one in India has been put on trial over the deal.

Case details

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Seller country Italy, United Kingdom
Seller company Finmeccanica (now Leonardo SPA), AgustaWestland (previously part of Finmeccanica, now Leonardo Helicopters)
Buyer country India
Goods category Helicopters
Equipment sold 12 AW-101 Merlin VVIP Helicopters
Deal value EUR 556 million
Sum involved in corruption EUR 51 million
Start year 2002
Outcome status Mixed

Dramatis Personae

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  • Shashi P. Tyagi — former head of Indian Air Force; involved in procurement and alleged bribe recipient.

  • Giuseppe Orsi — former CEO of Finmeccanica; prosecuted for corruption in Italy, acquitted on appeal.

  • Bruno Spagnolini — former CEO of AgustaWestland; prosecuted for corruption in Italy, acquitted on appeal.

  • Christian Michel — UK businessman; agent involved in the deal.

  • Guido Haschke — Italian businessman; agent involved in the deal.

  • Carlo Gerosa — Haschke’s business partner.

  • Gautam Khaitan — Indian lawyer and agent in the deal, alleged conduit for bribes.

  • Ahmed Patel — secretary to Sonia Gandhi, leader of the Congress Party.

  • Sanjeev, Sandeep and Rajeev Tyagi — cousins of Shashi Tyagi. Sanjeev Tyagi is suspected of involvement in bribery associated with the deal.

Summary of Corruption Allegations

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Allegations of corruption first became public in 2012, centering on suspicions of manipulation of the tender requirements by Indian officials. An audit of the procurement found numerous other flaws in the procedure, including a failure to check the reasonableness of the price, and the acquisition of twelve helicopters to replace eight, with no clear reason for why four extra were needed.

Evidence eventually submitted in Italian courts suggest that AgustaWestland paid EUR 51 million to Indian air force officers, bureaucrats, and politicians, and possibly to Italian politicians. The bribes were paid through three middlemen, Christian Michel, Guido Haschke, and the latter’s partner Carlo Gerosa, using a complex network of accounts and shell companies. Former Indian Air Force head Air Chief Marshall S. P. Tyagi was specifically identified by the Italian Appeals Court as the likely recipient of USD 11m in commissions, some of which was paid through three of his cousins. Several of Tyagi’s family members and co-conspirators have also been indicted by Indian officials.

As a result of the corruption allegations, the Indian government cancelled the contract in 2013, and was later able to successfully recover EUR 228 million already transferred for the 3 helicopters so far delivered, from funds held in guarantee.


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  • 1999

    India identified a need for new VVIP helicopters to replace its existing Soviet Mi-8 helicopters, which were coming to the end of their service life, and which lacked high altitude and night flying capabilities necessary for flying national leaders to locations in the Himalayas.

  • 2002

    A tender was first put out, specifying an altitude requirement for the helicopters of 6,000 meters; however, the original tender was cancelled, supposedly due to it leading to a single source situation.

  • 2006

    The revised tender issued in 2006 reduced the altitude requirement to 4,500 meters, insufficient for many of the Himalayan tasks required. This change in requirement enabled the AgustaWestland AW-101 Merlin helicopter to compete, while other changes to the specifications ultimately allowed the AW-101 the defeat its only competitor, the Sikorsky S-92.

  • 2010

    India finally signed a contract with AgustaWestland in 2010, to buy 12 AW-101s for EUR 556 million

Investigation Outcomes

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  • 2011

    The Italian Attorney General’s office started investigating the deal. News of the investigation was made public in February 2012, and the Indian Defence Minister A.K. Anthony ordered a Central Bureau of Investigations (CBI) probe the next day.

  • 2012

    Italian police raided the offices in Switzerland of Guido Haschke, the key middleman. Guido Haschke’s diaries discussed payments to a variety of people in India and formed part of the evidence. Haschke was extradited to Italy and held in prison for 6 months, but was released as part of a plea bargain, whereby he gave evidence crucial to the investigation.

  • Feb 2013

    Thanks to Guido Haschke's cooperation, Giuseppe Orsi, CEO of Finmeccanica, and Bruno Spagnolini, CEO of AgustaWestland were arrested in Italy and charged with corruption. They were acquitted, but convicted of lesser false bookkeeping charges. However, this verdict was overturned on appeal in 2016, and both were convicted of corruption and money laundering and sentenced to 4 and a half years (Orsi) and four years (Spagnolini) in prison. The detailed verdict by the court also made clear that S.P. Tyagi was a likely recipient of the bribes.

  • Mar 2013

    Meanwhile in India, the CBI issued a “First Information Report,” containing corruption allegations against S.P. Tyagi and 12 others in India and Italy, including Orsi, Spagnolini, middlemen Haschke, Michel, and Gerosa, and Gautam Khaitam. Defence Minister A. K. Anthony confirmed in 2013 that bribes had been paid as part of the deal.

  • 2014

    Finmeccanica agreed to pay a fine of EUR 7.5 million in 2014, in a settlement with Italian prosecutors, in return for corruption charges being dropped. A key piece of evidence was a tape recording of a discussion between Haschke, his partner Carlo Gerosa, and an Indian lawyer Gautam Khaitan, in which Haschke boasted of a complex web of companies and accounts, including in Mauritius, which would make the bribes impossible to trace. Another piece of evidence reported in 2014 was a note by Christian Michel to Peter Hullett, head of AgustaWestland India, that recommended targeting people—although not necessarily as potential bribe recipients—close to Sonia Gandhi, leader of the Congress Party, which led to considerable scandal in India. Another note from middleman Guido Haschke lists what is suspected to be intended recipients of bribes: 6 million euros for “AF” (air force), 8.4 million for “BUR” (bureaucrats), 6 million for “POL” (politicians), and 3 million for “AP”, which an expert for the Italian prosecutors alleged is a reference to Ahmed Patel, Sonia Gandhi’s political secretary. The same year, the Indian Enforcement Directorate (ED) registered a criminal case under the Prevention of Money Laundering Act, alleging bribe payments of 4.23 billion rupees (about USD 92 million at the time the contract was signed). The ED subsequently attached properties belonging to cousins of Air Chief Marshall Tyagi in October 2015. Following the conviction of Orsi and Spagnolini in Italy, evidence from the case was passed to the Indian authorities, which allowed the investigation to gather pace.

  • Dec 2016

    Italy’s highest court, the Court of Cassation, ordered a retrial in December 2016 due to a procedural flaw in the Appeals Court process. In India, Tyagi and Khaitan were arrested and questioned by the CBI.

  • Sep 2017

    Charges were filed against Tyagi and Khaitan in September 2017. Gerosa and Haschke remain of interest to Indian authorities, although Haschke appears to have been removed from the public Red Notice list in December 2016.

  • Jan 2018

    A Milan appeals court acquitted Spagnolini and Orsi again, on the grounds that the evidence against them did not provide enough proof of the alleged crimes.

  • Jun 2018

    Italy declined to extradite Gerosa to India.

  • Dec 2018

    The United Arab Emirates arrested Michel on India’s behalf and extradited the middleman in December 2018.

  • May 2019

    The 2018 acquittal was confirmed by Italy’s highest court.

  • Sep 2020

    the CBI issued a second charge-sheet in relation to the case, arraigning a key money-launderer, Rajiv Saxena, who had initially acted as a state witness. Other co-indicted Indian nationals either helped create shell companies for the deal or procured documents related to the VVIP competition for AgustaWestland. The CBI has also made public that it has requested the government’s permission to charge a former defence secretary, Shashi Kant Sharma, and an air vice marshal, Jasbir Singh Panesar, for their roles in the procurement scandal. There is a controversy over whether AgustaWestland was ever blacklisted (forbidden to bid on contracts) in India as a result of the scandal. In April 2016, members of the former Congress Party-led government (in power when the scandal broke in 2012) claimed that they blacklisted the company, but that the new National Democratic Alliance government of Narendra Modi had allowed them to bid again. However, the Modi government claimed that their predecessors had never blacklisted the company, and that they, on the contrary, would initiate a process to do so.


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