The Central Bureau of Investigation (CBI) on Friday arrested former Indian Air Force chief SP Tyagi, his cousin Sanjeev 'Julie' Tyagi, and lawyer Gautam Khaitan in the AgustaWestland VVIP helicopter scam.
Tyagi has become the first ex-service chief to be arrested in any case.
The arrests have brought the case back into the spotlight. And since the ruling BJP has long claimed that the previous UPA government was involved in the scam, it could use the opportunity to hit back at the Congress, which has been at the forefront of stalling Parliament on the demonetisation issue.
Earlier, in April, the BJP had created a ruckus in Parliament, claiming the Congress's top leadership received kickbacks in the AgustaWestland helicopter deal.
AgustaWestland's Rs 3,600 crore contract for supplying 12 VVIP choppers to the Indian Air Force was scrapped in 2013 by the then UPA government, over charges of kickbacks to Indian agents.
After India cancelled the deal, the CBI was assigned to investigate the matter. But it has so far failed to file a chargesheet.
There were three key middlemen in the deal - Carlo Gerosa, Guido Haschke and Christian Michel James (whose note mentioned Sonia Gandhi and other Congress leaders as one of the influential persons who could be approached to clinch the deal).
Responding to these allegations, Congress president Sonia Gandhi had said: "I have done nothing wrong. The government is there for two years, an inquiry is there. Why don't they complete it as early as possible...and impartially?"
Initial reports suggest Tyagi has been arrested for allegedly channelising bribes, which CBI sources say could have amounted up to 12% of the total amount.
The allegations are that Tyagi reduced the service ceiling (the height at which the helicopter flies) from 6000 metres to 4500 metres, in order to make Agusta's bid eligible. Tyagi, in his defence, had claimed that it was a collective decision taken by the Defence Ministry and other important members of the security establishment, including the then National Security Advisor MK Narayanan.
"They were arrested on the allegations of accepting illegal gratification for exercising influence through corrupt or illegal means," the apex investigating agency said.
The three have been arrested under Section 120B and Section 420 of the IPC and the Prevention of Corruption Act, 1988.
Khaitan, meanwhile, had been arrested in 2014 in the same case by the ED.
The timing of Tyagi's arrest is significant - it comes just days after Anil Sinha demitted office as the Director of the CBI, and Additional Director Rakesh Asthana, who was heading the investigations in the case, became interim chief.
According to reports, Sinha was part of one of the four meetings which took place to deliberate the changes in procurement policy. At the time, he was the Inspector General of the Special Protection Group. He was later reportedly asked to stay away from the probe, and there was speculation that his statement would be recorded.
Where the cash went
The arrest comes after several rounds of questioning earlier this year, by both the CBI and the ED, which came after the Milan Court of Appeals order in Italy, which claimed that bribes were paid to clinch the deal. The court had indicted Tyagi.
The CBI had got major leads in the form of more than 1.5 lakh documents shared by Italy with Indian authorities - the same ones which were also used by the Italian courts.
While Tyagi had initially denied meeting any AgustaWestland official during his tenure, he later accepted that he had met Giorgio Zapa, the CEO of Finmeccanica (the parent company of AgustaWestland), and middleman Carlo Gerosa several times between 2004 and 2007 in India, in the presence of his cousin Julie Tyagi. Air chief Tyagi was approached even before he became the Air Force chief, once it was clear that he was next in line.
During his interrogation by the agency, Tyagi admitted to having financial interests in three companies based out of Delhi and Noida - Meghanu Realtors, Anuras Properties and Shavan Enterprises. Sources had then pointed out that these were formed four years after Tyagi retired as the Air chief, and only one year after the deal was clinched in 2010. The agency was investigating the flow of funds into these firms.
In Khaitan's case, the CBI claims he had admitted to accepting money from middlemen Gerosa and Haschke, though he had denied that those were kickbacks. Khaitan's company Aeromatrix was allegedly used to route the bribes.
The Enforcement Directorate, which is also investigating the case, believes SP Tyagi was instrumental in altering the tender specifications that swung the deal for VVIP helicopters in favour of AgustaWestland. He was allegedly working at the behest of his cousins, who in turn had taken kickbacks from Gerosa and Haschke.
The ED had filed a prosecution complaint (its equivalent of a chargesheet) earlier this year. Agency sources had then claimed that arresting individuals didn't always help the cause of the investigations. The CBI, interestingly, in cases of corruption, usually does not arrest the accused till the chargesheet is filed.
"Sanjeev, Rajeev and Sandeep, cousins of SP Tyagi, who had a long acquaintance with Guido Haschke and Carlo Gerosa ...entered into a consultancy contract with Gordan Services Sarl, Tunisia, in 2004. Gordon Services was linked to Haschke and Gerosa. The Tyagi brothers received 1.26 lakh euros after May 2004, and 2 lakh euros after February 2005. The Tyagi brothers, including SP Tyagi, also received some amount in cash," the ED's complaint read.
Khaitan was arrested on 23 September 2014, a day after the ED searched his office and residence. He allegedly helped set up bogus firms in Mauritius and Tunisia to launder the kickbacks
Interestingly, the name of Shravan Gupta, an industrialist close to the Congress party, had also come up during the probe. He was asked by the ED to join the probe after BJP MP Kirit Somaiya alleged that Rahul Gandhi's aide Kanishka Singh, an estranged cousin of Gupta, was involved in the scam.
After interrogation, the ED sleuths were not convinced on why EMAAR, under Gupta as its MD, had appointed Khaitan and Haschke on its board, a year before the deal was finally clinched. Both had later resigned.
"Investigations revealed that several companies - IDS Tunisia; Aeromatrix Info Solutions; Interstellar Technologies, Mauritius; Infotech Design Pvt Ltd, Mauritius; ML Administrator Ltd, Mauritius; and Media Exim Pvt Ltd - were formed in various countries to channel the money against fabricated invoices, under the guise of some work being undertaken," an ED official had told Catch in April 2016.
The money was allegedly laundered through a complex multi-country network, with Khaitan playing a crucial part in finally bringing it to India, as 'FDI' in the firm Aeromatrix Solutions from Infotech Design System, Mauritius.
Meanwhile, ICICI Bank has confirmed the receipt of FDI - 99,963 euros on 20 July 2009, another 99,920 euros on 14 October 2009, 2,49,883 euros on 7 November 2009, and 2,19,890 euros on 21 December 2009.
The 'FDI' came in as equity from JP Morgan AG, Frankfurt. The same amount was received in Germany from MS Infotech Design System, Mauritius, which shared the address with ML Administrators, establishing the links between the two firms.
AgustaWestland had an agreement with IDS Infotech India to provide IT enabled services, for which it paid 19 euros per man-hour. After IDS Tunisia was set up, however, the same work was invoiced at 34 euros per man-hour for 15,000 hours. Clearly, the Tunisian firm was just an intermediary to over-invoice bills.
Meanwhile, among the documents seized from Khaitan was a list of the beneficiaries of AgustaWestland's monthly payment of 5,10,000 euros to IDS Tunisia. It lists the amount received against the initials of the beneficiary. One entry for '270' is listed against 'brothers', which Khaitan has told the investigators "must be the Tyagi brothers".
The ED last year attached properties worth Rs 3.7 crore owned by Khaitan, his wife Ritu, and Aeromatrix. It also provisionally attached properties worth Rs 6.6 crore belonging to the Tyagi brothers. The agency also secured attachment orders for Rs 1.1 crore worth of properties belonging to Media Exim, a firm run by middleman Christian Michel James.
Now that Tyagi has been arrested, it would be interesting to see if both the CBI and the ED manage to unearth the entire trail, which, according to sources, had gone cold, for it involved multiple countries, and multiple layers of middlemen and companies.
(With inputs from Akash Bisht)
Edited by Shreyas Sharma
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