Leonardo Responds to Allegations of Illegal Payments
(Source: Defense-Aerospace.com; posted June 11, 2018)
PARIS --- Italy’s Leonardo has, for the first time, provided a response to allegations that it made illegal payments to win helicopter contracts in Panama, India and South Korea.

The statement below is excerpted from a statement provided to an NGO, Corruption Watch UK, for inclusion into its investigation into potential irregularities by AgustaWestland International in the sale of Wildcat naval helicopters to South Korea.

Corruption Watch UK published its report on June 6. It contains an 8-page response from people and companies named in the report. We have excerpted below a statement from Leonardo, which includes its first official response to the India’s “VVIP scandal.”

India abruptly canceled a €566 million contract for 11 AW101 VIP helicopters for its government flight, alleging that bribes were paid by AgustaWestland (now Leonardo Helicopters) and its agents.

Judicial proceedings continue in India, although no evidence of payments has ever been made public or otherwise presented.

Italy prosecuted Finmeccanica (now Leonardo), AgustaWestland and their chief executives, but after an initial conviction was referred to the country’s supreme court, the Corte di Cassazione, all charges were dropped because prosecutors could not prove that any crime was committed. Click here for our April 2015 report on the Indian contract.

In addition to Leonardo, the CWUK report also contains a response from Christian Michel, an AW agent who stands accused by India of having paid bribes to support the AW101 sale. This is also the first time he has publicly presented his defense.


Leonardo: Comments on the Cases Regarding Panama, India and South Korea

-- Panama:
In relation to the proceedings conducted against Leonardo Spa, on 21st September 2017, the competent Judge declared the decision not to prosecute against the Company for violations charged to it. The case is closed.

-- India:
With reference to the Indian CBI charges against Leonardo group companies, it is a matter of Leonardo policy not to comment on any matters that are presently the subject of ongoing investigations or proceedings.

To note that proceedings relating to the same subject matter in Italy have not resulted in any convictions on grounds of corruption against any member of the Leonardo group, nor any of its officers or employees (past or present).

In one, the Italian public prosecutor acknowledged the adequacy of Leonardo’s Organisational, Management and Control Model (in place since 2003 and subject to regular currency reviews) not only in the prevention of corruption offences but also in respect of the compliance processes adopted to guarantee adequate standards of fairness and ethical conduct.

Those proceedings are a matter of public record, but in summary:

-- On 25 July 2014, following the conclusion of its investigations, the public prosecutor in Italy dismissed all proceedings against Finmeccanica SpA (now Leonardo Spa);

-- On 28 August 2014 AgustaWestland SpA and AgustaWestland Limited took the commercial decision to request from the Italian Court of Busto Arsizio a “patteggiamento”, thereby accepting, without admission or finding of any wrongdoing, administrative penalties in order to bring a swift conclusion to proceedings;

-- On 8 January 2018, two former CEOs of AgustaWestland (in Italy) were found not guilty of charges of international bribery by the appellate criminal court in Milan.

-- South Korea:
In accordance with Leonardo’s adviser appointment procedures (see above), due diligence was most recently undertaken on Mr Yang Kim and his company in August 2014 which did not reveal any relevant risks that would prevent the renewal of that appointment.

Leonardo took appropriate action to suspend the appointment that it had with Mr Kim and his company shortly after learning of Mr Kim’s indictment. Following a further review that appointment was terminated, notwithstanding that Mr Kim had yet to make a final appeal to the Korean Supreme Court. Leonardo is satisfied that it acted promptly and decisively in relation to this matter.

No Leonardo Group company is or has been charged with any offence or subject to any formal investigation in connection with the above South Korean matters.

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