Prosecutor Eugenio Fusco said Finmeccanica CEO Giuseppe Orsi is under investigation in a bribery case related to the $750 million sale of helicopters to India in 2010, The Wall Street Journal reported.
Fusco said no charges have been filed against Orsi, who has denied offering bribes.
Police searched Orsi's home and offices in Milan, the Italian news agency ANSA reported.
Orsi led Finmeccanica's helicopter division, AgustaWestland, when it won a contract to supply 12 helicopters to India. Prosecutors allege about 10 percent of the deal was used for kickbacks to ensure AgustaWestland won the contract.
AgustaWestland's current CEO Bruno Spagnolini is under house arrest, ANSA said.