Defence Ministry formally lifts ban on Italian firms Leonardo SpA, AgustaWestland

New Delhi, Nov 14: The defence ministry has formally lifted a ban on Italian firm Leonardo SpA and its subsidiary AgustaWestland as their names have not figured in an updated list of companies debarred and suspended from business dealings with it, officials familiar with the developments said on Sunday.

Leonardo SpA, which was earlier known as Finmeccanica, and AgustaWestland were banned in 2014 in the wake of allegations of corruption in a Rs 3,500-crore VVIP helicopters deal.

The ministry issued a new notification dated November 12 updating the list of firms debarred/put on hold/suspended from doing business with it. The two Italian firms do not figure in the list.

India had scrapped the contract with AgustaWestland for supplying the 12 AW-101 VVIP choppers over alleged breach of contractual obligations and charges of kickbacks paid by the firm for securing the deal. Sources said Leonardo SpA has given a letter withdrawing its claims of 350 million euros on the cancelled order of the VVIP helicopters.

It is learnt that though the defence ministry has lifted the ban on the two Italian firms, the probe by the CBI and the Enforcement Directorate (ED) into the VVIP chopper deal will continue. The sources said the lifting of the ban will now allow Leonardo SpA to participate in the heavy-weight torpedo programme under the Indian Navy's Project 75.

Six Scorpene submarines are being built under Project-75 by state-run Mazagon Dock Limited (MDL) under technology transfer from the Naval Group of France. The Navy is likely to soon float tenders for naval radars and naval turrets for the submarines under Project 75. The MDL has already delivered four of the six submarines.

The updated list figured six companies as "debarred firms" while 15 companies have been put under the category of "put on hold/suspended". The list also mentions two firms as "restricted" for procurement.

Following reports of the lifting of the ban on Leonardo SpA, the opposition Congress had questioned the decision.