India’s Ministry of Defense said Friday that it has begun the process of canceling its contract with AgustaWestland for 12 helicopters after the Italian company was accused of bribing government officials.
The ministry said in a statement that it has issued a “show cause†notice to AgustaWestland that cited the contract’s terms, which forbids “the use of undue influence and against employment of agents and agency commission.â€
The government said it had suspended payments to AgustaWestland on Wednesday.
India is scrutinizing the 2010 deal with AgustaWestland, a subsidiary of the Italian aerospace group Finmeccanica, after Finmeccanica’s then-chief executive, Giuseppe Orsi, was arrested in Italy in a corruption inquiry earlier this week. Mr. Orsi resigned as C.E.O. after his arrest.
Analysts have said the bribery allegations may hinder Finmeccanica’s efforts in India to win $12 billion in contracts.
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