Italian Police Arrest Finmeccanica CEO Article Review

This article relates a bribery scandal regarding Giuseppe Orsi, the chief executive of Finmeccanica. The total amount involved was reportedly $750 million dollars and with the Italian State also being a 30% owner in the company making it an especially tricky matter. 12 helicopters, sold to India, were the result of a bribery to procure the contract with Finmeccanica. This case is of special interest to the Italian government, because the two company heads charged are both instrumental to the Italian economy. The company was also in the process of procuring important contracts with other countries that could be in jeopardy as a result of these actions. Overall there were three individuals arrested for their involvement.
There are several different ways that of corporate governance failed in this case. Shareholders were also taken advantage of when the shares were misreported, and with the government also owning part of the company there was a conflict of interests. The government may have been less likely to act upon these charges in fear that they could lose other contracts in the works as well as profits and reputation. Overall this company used their power to commit black mail and hide their wrong doings from everyone, other employees, the government, and the shareholders. There was also little competition for this type of business in Italy so the company held the ability to overcharge for items and to use intimidation to receive their asking price. A lot of the proceeds from the sale when unaccounted for, it is suspected that the three individuals whom were arrested, may have stolen money from the company as well. False reporting to shareholders backs up this sentiment. The company had more power than they should have because of their ties with the Italian government.