The arrest of Finmeccanica's chairman and CEO and the prospect that the company could be barred from doing business in India's lucrative defense market is shaking the foundations of the Italian aerospace and defense giant, which already was struggling to restructure in the wake of high debt and declining government spending in Europe.
A Finmeccanica bribery scandal has prompted the Indian government to defer a decision on the much-awaited $1.5 billion purchase of 197 light utility helicopters for its military. The defense acquisition council, headed by Defense Minister A.K. Antony, decided to delay a deal for the reconnaissance and surveillance helicopters (RSH) hours after the Indian government ordered a federal probe into alleged corruption in the sale of 12 AW101 VVIP helicopters to the Indian air force (IAF) by AgustaWestland, the helicopter company owned by Italy’s Finmeccanica.
