Business, Economics and Jobs

Finmeccanica boss Guiseppe Orsi arrested on corruption charges


Giuseppe Orsi (L), president and CEO of Finmeccanica, shows US Secretary of State for Defence Philip Hammond around Finmeccanica's stand at the Farnborough International Airshow in Hampshire, southern England, on July 11, 2012. Orsi has since been arrested for alleged corruption.

Police in Italy have arrested Guiseppe Orsi, chief executive of state-owned defense group Finmeccanica, over allegations that he paid bribes to secure orders.

Orsi is accused of giving hundred-thousand-dollar kickbacks to government officials in India to assure the sale of 12 Finmeccanica helicopters to the Indian Defense Ministry for €560 million ($749 million).

He was detained Tuesday morning and his home and offices searched, Reuters reported. He faces charges of corruption and embezzlement.

The head of Finmeccanica's AgustaWestland helicopter unit, Bruno Spagnolini, was placed under house arrest, the BBC said. Warrants were also issued for another two people living in Switzerland.

The Indian government has since ordered its own inquiry into the allegations, a Defense Ministry spokesman told Agence France-Presse.

New Delhi is considering deferring its order with Finmeccanica while the matter is investigated, another source told Reuters.

Orsi has always denied any wrongdoing in the case, which dates back to 2010.

In a statement, Finmeccanica expressed support for its CEO and assured that business would continue as usual.

The company's shares fell by as much as 14 percent in Milan after the news broke.

It's the third major corruption scandal to hit Italy's business world in recent weeks, Reuters points out, after dodgy derivatives trading at Banca Monte dei Paschi and alleged bribery at one of oil company Eni's subsidiaries.

Prime Minister Mario Monti, who faces national elections on Feb. 24, admitted today that there was a problem with Finmeccanica's management, and promised "we will face up to it."