Rafale deal:
Dassault paid 1 million euros to Indian middleman as ‘gift’, claims report
The Rafale maker could not explain the payment to French anti-corruption agency AFA, according to online journal ‘Mediapart’.
Scroll Staff
French defence minister Jean-Yves Le Drian shakes hands with his Indian counterpart late Manohar Parrikar in New Delhi on January 25, 2016, during a joint press conference with Indian Prime Minister Narendra Modi and French President François Hollande. | Prakash Singh / AFPThe Rafale fighter jets deal involved a payment worth one million euros (Rs 8.62 crore) to an Indian middleman, which plane maker Dassault has not been able to explain to the French anti-corruption authorities, the country’s online journal Mediapart reported on Sunday. The Rafale jets are India’s first major acquisition of fighter planes in over two decades.
In the first report of a three-part investigation, Mediapart said that in mid-October 2018, French anti-corruption agency, Agence Française Anticorruption, first spotted the payment and asked Rafale manufacturer Dassault for an explanation.
Soon after the Rafale deal was finalised on September 23, 2016, Dassault had agreed to pay the amount to one of its sub-contractors in India, Defsys Solutions. Dassault said that money was used to pay for the manufacture of 50 large replica models of Rafale jets, Mediapart reported. The French company was, however, not able to provide any proof to the AFA to show that the models were actually made.
In spite of the apparent irregularity, the AFA, which is answerable to both the budget ministry and the ministry of justice in France, did not refer the matter to the prosecutors, according to Mediapart.
On the other hand, Defsys Solutions, the company to which the amount was purportedly paid, is owned by Sushen Gupta, who was arrested in March 2019 by the Enforcement Directorate in a money laundering case relating to the AgustaWestland scam. He was later released on bail.
How AFA found the irregularity
In 2017, the AFA was set up to check whether large companies have implemented the anti-corruption procedures set out in the French law known as Sapin 2, Mediapart reported. In October 2018, as various reports flagged possibilities of corruption in the Rafale deal, AFA decided to audit Dassault.
During the process, the anti-corruption agency came across an item of expenditure in Dassault’s 2017 accounts, costing 508,925 euros (Rs 4.39 crore) and entered under the heading “gifts to clients”. A report of the AFA audit, seen by Mediapart, referred to the expenditure as “seemed disproportionate in relation to all the other entries” under the same heading.
On being asked, Dassault gave AFA a “proforma invoice” dated March 30, 2017, that was supplied by Defsys Solutions. The AFA report said that the invoice amounted to more than one million euros, and was meant for manufacture of the 50 car-sized models of Rafale, Mediapart reported.
However, as AFA asked Dassault why it had ordered an Indian company to make models of its own aircraft, at 20,000 euros a plane, and the reason behind entering the expenditure as “gift to client”, the aviation company could not provide satisfactory explanation. The company also could not show even a photograph to prove that the models were ever made, the report alleges.
The AFA inspectors thus suspected that this was a bogus purchase designed to hide financial transactions, according to Mediapart.
However, Charles Duchaine, the director of AFA, did not refer the matter to authorities and instead mentioned the entire episode in “two short paragraphs” in the agency’s final report on its Dassault audit, Mediapart reported.
Duchaine refused to comment on the matter when questioned by Mediapart. A Dassault spokesperson, meanwhile, told the journal that the company will not be commenting on it.
The Rafale deal
The Rafale jets deal came four years after the Narendra Modi government signed a deal with France for a total of 36 units. All the 36 jets are to be delivered by 2022.
The deal had become a major political topic during the Lok Sabha election campaign in 2019. Congress leader Rahul Gandhi, among others, had accused Prime Minister Narendra Modi of treason and corruption multiple times, and alleged that he had acted as a middleman for industrialist Anil Ambani in the deal.
The first Rafale fighter jet was handed over to the Indian Air Force on October 8, 2019, in France, in a ceremony attended by Defence Minister Rajnath Singh. The jets were formally inducted into the fleet on September 10.
Support our journalism by subscribing to Scroll+. We welcome your comments at letters@scroll.in.
Rafale Deal
Dassault
Sushen Gupta
Defsys Solutions
Rafale Deal
Dassault
Sushen Gupta
Defsys Solutions
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
BJPS Response:
Says same Sushen Gupta named who has ‘links’ with Congress as established by AgustaWestland case
Updated At: Apr 06, 2021 06:55 AM (IST)
Vibha Sharma
Tribune News Service
New Delhi, April 5
Responding to allegations that French combat jet company Dassault paid 1 million euro to an Indian middleman after signing of the India-France agreement in 2016, Union Minister Ravi Shankar Prasad, in turn, targeted the rival Congress for flagging the allegations of a French anti-corruption agency.
Dismissing the new Rafale report as “corporate rivalry” and “completely baseless”, Union Minister Ravi Shankar Prasad accused the Congress of weakening the morale of Armed Forces, reminding it that the same “Sushen Gupta” named in the report had “links” with the Congress as established by AgustaWestland case.
Read also: Congress seeks probe into Rafale deal after French media claim bribes were paid
“The Congress is again speaking of Rafale, after the Supreme Court order and what happened to their campaign in the 2019 general elections?
“I am told that Rahul Gandhi does not do homework it seems that party spokesperson also do not do their homework,” Prasad said pointing that the person named in the report was the same who was also named in the AgustaWestland case in which members of “the family and senior Congress leaders were named”.
“They have spoken about some Sushen Gupta who was also involved in the AgustaWestland deal about whom Congress leader Salman Khurshid publicly said they knew his family,” he said.
Dismissing the report as a “corporate rivalry”, he called it completely baseless. He also accused Congress for “weakening the morale of the Armed Forced”. “If we had the Rafale during the Balakot we could have made the strike from our side. They asked for proof for Uri, Balakot. The country has increasingly refusing to take Rahul Gandhi seriously for the kind of utterances he makes with alarming regularity,” the BJP leader said.
According to reports, a French anti-corruption agency allegedly raised red flags over a suspicious payment made by Dassault Aviation to an Indian defence company in 2017-18. The report published by Paris-based investigative news website places a fresh spotlight over the controversial 2016 Rafale deal.
It claims that the Rafale jet maker was unable to adequately provide documentation for this 2017 contract for aircraft models, leading the anti-corruption agency’s inspectors to suspect that it was a “bogus purchase” or one that was designed to conceal a middleman payment.
Indian defence company’s owners are closely connected to alleged defence agent Sushen Gupta, who is under investigation by the CBI in the AgustaWestland case, the report claims.
