Finmeccanica SpA Chairman Giuseppe Orsi, arrested three days ago on charges of corruption and tax fraud, resigned from the post after losing all powers and the chief executive officer role to Alessandro Pansa.
Orsi. who remains in jail, also resigned his board of directors position, his lawyer, Ennio Amodio, told reporters today in Busto Arsizio, near Milan.
Italian judges have been investigating wrongdoing at Finmeccanica’s AgustaWestland helicopter arm in the sale of 12 AW101 helicopters to India during a time when Orsi led the unit. The Indian defense ministry initiated proceedings to cancel the 560 million-euro ($748 million) deal and has given the company seven days to respond. Bruno Spagnolini, the CEO of the helicopter unit, remains under house arrest.
Orsi has told Italian judges he is unaware of any wrongdoing, according to his lawyer. Orsi denied knowing those named in a probe as brokering the deal in India, his legal representative said.
Finmeccanica fell as much as 16 cents, or 3.7 percent, to 4 euros in Milan, and traded at 4.03 euros as of 3:45 p.m. The shares have slumped about 15 percent since Orsi’s arrest.
Finmeccanica, on Feb. 13, already called a shareholder meeting for April to replace Orsi and an already vacant board position.
The Indian government has so far taken delivery of three of the 12 rotorcraft in the deal signed in 2010. AgustaWestland beat an offering from United Technologies Corp.’s Sikorsky unit, bidding the S-92. Russian Helicopters, which entered the competition with an Mi-17-based offering, was eliminated early in part because the firm did not submit the required integrity report.