Decoding the Tunisia connection in #AgustaWestland scam

How an intermediary company IDS Tunisia was formed to facilitate payments into tax havens

Analysis of why a company was setup in Tunisia in the #AgustaWestland scam
Analysis of why a company was setup in Tunisia in the #AgustaWestland scam

Background

The Indian government, in 1999 decided to upgrade the helicopters that were used to fly the Very Very Important Person (VVIP)s. Tenders were called for the purchase of 6 helicopters and amongst the entries, it emerged that the French helicopter Eurocopter 225 (EC-225) was the only one that satisfied all the requirements. The then government did not want to end up in a single vendor option and therefore the specifications were changed. In the revised Request for Proposal (RFP) issued in 2006, the altitude requirement was reduced to 4,500 meters with a view to widening the vendor base and the cabin height of 1.8 meters was added to the specifications. Riding on the revised specifications, AgustaWestland not only made the cut but eventually went on to win the contract.

Bribery charge

On April 9th, 2016, the Italian Appellate Court in Milan ruled thus:

  • Giuseppe Orsi, CEO and president of Finmeccanica since 04.05.2011

  • Guido Ralph Haschke, director and partner GADIT S.A. Lugano and GORDIAN SERVICES S.ar.l based in Tunis;

  • Carlo Gerosa, the Haschke partner in the aforementioned members and

  • Christian Michel, owner of GLOBAL SERVICE TRADE COMMERCE based in London and GLOBAL SERVICE FZE based in Dubai, the consultant AGUSTAWESTLAND S.p.A.

promised and actually corresponded, through the Tyagi brothers Juli, Docsa Tyagi and Sandeep Tyagi, to get the Air Chief Marshal Sashindra Pal Tyagi, Chief of the Indian Air Force from 2004 to 2007, to modify the tender in a manner favorable to AgustaWestland. The price to supply 12 helicopters was set at €556 million.

For several months AW paid IDS Tunisia…

A monthly payment schedule of €510,000 was paid into a Tunisian company IDS Tunisia from where the money was split as in the following picture below:
Flow of Payments from AW

In a normal business, the services rendered by an entity (in this case, Aeromatrix) should be invoiced to the helicopter supplier AgustaWestland (AW) who in turn would pay it. But what really happened was the reverse!

The Court observed that “The operating procedures of the contract are peculiar: AW should send, as per contract, a ‘call off’ order to IDS, in fact, through GARAVAGLIA, which is the IDS interface; AW would send a ‘delivery report’ that is, a delivery report that Kamoun of IDS Tunisia, printed on IDS letterhead and resubmitted to AW, the same document is sent to Aeromatrix. Praveen of Aeromatrix drew up on the basis of that “delivery report” a “work order” and sent to IDS where Kamoun, in turn, copied it on the letterhead of IDS TUNISIA and sent it to AW. There was a “purchase order” of Agusta, a “delivery report” by IDS / Agusta, and finally a “work order” by IDS to AEROMATRIX that inevitably was backdated. It seems evident that the system functions in reverse, starting from the delivery of services to get the order of the same.

The money Aeromatrix got was used to pay engineers who were in Italy for the project to cover their boarding and lodging expenses. The judgment covers in detail how much the hourly rate of every active and passive personnel was and what was the real expense and a DELTA which got deposited into Interstellar, a Mauritius company operated by Haschke and Gerosa. For the details, see the picture below, taken from Page 13 of the judgment.
Monthly Payments

Conclusions

Why was the IDS Tunisia company being used in the middle? So a large part of the “services” rendered could be siphoned into a Mauritius company whose accounts were being operated by Gautam Khaitan (Page 31). This typically means only Khaitan could control the outflows. IDS Tunisia, in turn, was being managed by IDS Infotech India. IDS Tunisia had no other customers other than AW. It was established in Tunisia as a shell to route payments to various destinations. The Criminal Bureau of Investigation (CBI) had filed an FIR against Finmeccanica, AW, IDS Infotech, Aeromatrix and IDS Mauritius. Note that both Haschke and Gerosa are on the board of Aeromatrix! In fact Gautam Khaitan too was on its board till the time articles about the scam started appearing in newspapers.

IDS stands for Infotech Design System. There were regular transfers of money from Interstellar Mauritius to IDS Mauritius, with amounts ranging from €50,000 to €250,000 (Page 132). The court further observes that IDS Mauritius owns Aeromatrix! Is your head spinning yet?

More revelations…

On Page 152, the court observes that €5 million was transferred in cash by Julie Tyagi into a Swiss company called Calumet, based in Lugano, Switzerland (finally the Swiss connection!) from Mauritius. Tyagi, in turn, transferred this money to Haschke. There is a long conversation between Gerosa and Haschke on why the amount was not €15 million…

Another interesting tidbit… AW CEO Orsi met with Haschke, Gerosa and Michel in Dubai on the 7th and 8th of May, 2011 to discuss a settlement of €28 million (equal to 5% of the contract value, a “success fee”) to the “family”, and €30 million to the “team”. Those of you who are sharp in math would have figured out that 5% amount multiplied by 20 matches the purchase price mentioned in the beginning of this post.

We know how the 30 million was to be distributed (Page 9). What about the €28 million to the “family”?

Note: Page numbers mentioned in brackets refer to the page numbers in the Italian Appellate Court judgment.

Team PGurus

7 COMMENTS

  1. We only keep talking & speculating with absolutely no progress ever in action. One month down the line, this issue is totally forgotten & the BJP fellows latch on to something else which is more politically suitable. What shit is this? We the people are ultimately the frustrated fools believing the present Govt to take prompt & consistent action and bring the culprits to book. This country is destined to be doomed at this rate!

    • If you are reading your comment again, you will get to know the progress that has happened so far! India has got hold off 3 major accused. Stay tuned.

  2. Several media, esp TV channels, were quick to interpret ‘Family’ to mean Tyagi family,… so you don’t think ‘family’ means somebody else’s family.

  3. Since many information pertaining to this scam is already exposed by the Italian court, all it needs is a first rate honest capable team consisting of Gurumurthy,MR Venkatesh,R.K.Raghavan and the legal team under DrSwamy to investigate the entire bunch of crooks involved at Indian end and a first rate honest Italian speaking financial person at Italy to interface with the judge and prosecutors involved in sending the italian crooks to jail.In one years time, we will have a court proof case to collar all those involved to a long term vacation in tihar.This team should also ensure that all the crooks wealth are taken back by government and after spending time at tihar,they will emerge as first rate paupers.

  4. 5% of the success fee for the contract value (556M) is approx. Euro 28 million. Presumably the cut received for the deal by the family -sounds certainly plausible.

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