The Attorney General has cautioned the Centre that blacklisting Italian defence firm Finmeccanica and its subsidiaries in the wake of the alleged chopper scam could affect the operational preparedness of the armed forces.
In his opinion rendered to the Defence Ministry, Attorney General Mukul Rohatgi is learnt to have cautioned government on the issue of blacklisting Finmeccanica -- the parent firm of AgustaWestland, whose Rs 3,600 crore deal to supply 12 VVIP choppers was scrapped on January 1 after allegations of payment of kickbacks and violation of contractual obligations.
Defence Ministry has put on hold all defence deals with Finmeccanica after the scam broke last year and the AG has now said that that is likely to hit the modernisation of armed forces in a big way as the group companies are involved in defence projects worth over Rs 30,000 crore.
The ministry had also asked the departments under it to stop any kind of dealings with the firms named in the VVIP chopper scam FIR, including AgustaWestland, IDS Tunisia, IDS Mauritius, IDS Infotech, Mohali, and Aeromatrix Solution Ltd, Chandigarh.
The government has also deferred a Rs 6,000-crore 16 helicopter deal for the Navy in which one of the two companies is linked to Finmeccanica.
There are several such deals, like the one for the development of the indigenous Unmanned Aerial Vehicle, Rustom, for which Selex radars are planned to be inducted.