Italian police arrested the chief executive of aerospace and defence giant Finmeccanica on Tuesday for corruption and embezzlement in relation to alleged bribes given to the Indian government, Italian media reported.

Giuseppe Orsi had been under investigation for months and had denied any wrongdoing in the deal for the sale of 12 AgustaWestland helicopters to India in 2010.

The magistrate in the case also issued an order for the head of AgustaWestland, Bruno Spagnolini, to be put under house arrest.

Two suspected intermediaries in the bribes who reside in Switzerland have also been targeted with extradition requests, the reports said.

The price of shares in Finmeccanica fell by slightly more 9.13 percent in morning trading on the Milan stock exchange to 4.236 euros.

Finmeccanica is not the only Italian industrial giant under investigation.

Prosecutors last week announced they were looking at Paolo Scaroni, chief executive of energy major ENI, over allegations of bribes paid to Algerian officials to win contracts there.

Italy's third largest bank, Banca Monte dei Paschi di Siena, has also been shaken by a series of investigations over mismanagement that has forced it to seek a public bailout.