India on Friday said it had taken steps to cancel a contract for 12 Italian helicopters amid allegations the deal was won through kickbacks as the head of the suspected defence company stepped down. The Indian ministry of defence said in a statement it had "initiated action for cancellation" of the $748 million contract for the helicopters from AgustaWestland, a unit of Italian aerospace group Finmeccanica, intended for use by top politicians.

India on Friday said it had taken steps to cancel a $748 million contract for 12 Italian helicopters amid allegations that the deal was won through kickbacks. The ministry of defence said in a statement it had "initiated action for cancellation" of the contract for 12 helicopters from AgustaWestland, a unit of Italian aerospace group Finmeccanica, intended for use by top politicians. The ministry issued a "show-cause" notice to Finmeccanica -- a legal step asking the company to justify why the contract should not be cancelled.

The chief executive of Italian defence and aerospace giant Finmeccanica, Giuseppe Orsi, caught up in an international bribes scandal, formally resigned on Friday, according to Ansa news agency. Orsi, who was arrested on Tuesday in a bribery scandal over the sale of 12 helicopters to India, also stepped down as chairman, Ansa quoted his lawyer as saying. ljm/ide/arp

NEW DELHI, Feb 13 (Reuters) - India will blacklist Finmeccanica Spa and cancel its deal to buy 12 helicopters from the Italian defence group if allegations of bribery are proven against the company, Defence Ministry A.K. Antony said on Wednesday. Antony said India's Central Bureau of Investigation (CBI) had been ordered to investigate the matter and if the allegations were proven, those involved would "pay for their lapses. Nobody will be spared."