Italian police have arrested the chief executive of the state-controlled defence group Finmeccanica SpA in a corruption investigation centred on the sale of helicopters to the Indian government, a judicial source has said.
Prosecutors in Busto Arsizio ordered the arrest on Tuesday of Giuseppe Orsi for alleged bribes paid to secure the sale of 12 executive aircraft manufactured by AgustWestland, Finmeccanica's helicopter division, when he was head of the unit, the source said.
"There is a problem with the governance of Finmeccanica at the moment and we will face up to it."
- Prime Minister Mario Monti
Police were carrying out a search of Orsi's offices in Italy's financial capital, Milan, police sources said.
Authorities have also ordered the house arrest of Bruno Spagnolini, AgustaWestland's current chief executive.
Highlighting the political sensitivity of the case less than two weeks before elections, Prime Minister Mario Monti said the government would deal with management issues at the company.
"There is a problem with the governance of Finmeccanica at the moment and we will face up to it," Monti told RAI state television.
India's defence ministry said it could not immediately comment.
Series of corruption cases
In a brief statement, Finmeccanica expressed its support for Orsi and said it hoped his legal position could be clarified as soon as possible. Its business was operating as normal in the meantime, the company added.
Finmeccanica and its executives have been the target of a wide-ranging investigation into alleged corruption in the awarding of international contracts.
Orsi replaced the former chief executive who resigned under government pressure and has been steering the loss-making company through a restructuring.
The company is 30 percent owned by the government, and says it has always done business in India through official channels.
The Italian business world has been shaken in recent weeks by a series of corruption cases, notably a derivatives scandal at Banca Monte dei Paschi, the world's oldest surviving bank, and an alleged bribery case involving oil service group Saipem.