The Italian attorney general’s office began a probe last year into alleged unethical dealings by the company, which has now widened to include the Rs 3,546-crore contract with India, reports from Italy say. Finmeccanica subsidiary Augusta Westland signed the deal with the Indian Air Force in 2010.

La Repubblica reported that the deal is being investigated, and that a senior company official, Lorenzo Borgogni, has told prosecutors that slush funds were generated after a “sudden” escalation of price by 10 million euros in 2010.

While it is not clear whether kickbacks were paid in India, the money was allegedly used by a top Finmeccanica official to bribe Italian political parties.

Augusta Westland is one of Finmeccanica’s most profitable subsidiaries. Another subsidiary, Selex Sistemi Integrati, which is also under investigation, recently won a 10 million-euro contract to supply radars and other equipment for India’s first indigenous aircraft carrier under construction in Kochi.