Dassault paid 1 million euros to Indian middleman in Rafale deal: Report

Aviation company Dassault paid 1.1 million euros (₹9.5 crore) to an Indian middleman following the 2016 deal for the sale of 36 Rafale jets to India, according to Mediapart, an independent French online investigative journal.

The Mediapart report is based on an investigation by France’s anti-corruption agency.

Prime Minister Narendra Modi had first announced the deal for 36 Rafale fighter jets in 2015, which led to questions by the Opposition about alleged irregularities.

Last year, in its verdict ruling out a court-mandated probe into the deal, the Supreme Court rejected the argument that the government had bought overpriced jets. The bench, led by then chief justice and now Rajya Sabha member Ranjan Gogoi, steered clear of the pricing issue in its verdict.

The first batch of five Rafale jets arrived in India on July 29, 2020, nearly four years after India signed the inter-governmental agreement with France to procure 36 of the aircraft at a cost of ₹59,000 crore. Since then India has received 14 Rafale.

Also read: ‘Opening can of worms?’ Chidambaram asks as CAG questions govt on Rafale

On Mediapart released the first of a three-part series on the deal. It reported: “Alongside this controversial deal [for the jets], Dassault also agreed to pay one million euros to a middleman who is now under investigation in India in connection with another defence deal.”

“The company said the money was used to pay for the manufacture of 50 large replica models of Rafale jets, even though the inspectors were given no proof that these models were made.”

The so-called mysterious payment was reportedly unearthed by Agence Française Anticorruption (AFA), France’s anti-graft agency, in an audit of Dassault. Mediapart reported that during AFA’s audit accounts for 2017, inspectors discovered “an item of expenditure costing 508,925 euros under the heading ‘gifts to clients’.”

According to the report, the French investigators were given an invoice from Indian company Defsys Solutions run by Sushen Gupta, who is being investigated by the CBI and Enforcement Directorate in the AgustaWestland case involving kickbacks paid in India in a deal for VIP helicopters.

Defsys is one of the subcontractors of Dassault in India. Sushen Gupta was earlier arrested and granted bail in the helicopter case.

The AFA reportedly asked Dassault why such an order was given to an Indian company at such a price, why the expenditure was recorded as “gift to client” and whether any models of the aircraft were ever made. Mediapart reported: “Dassault group was unable to provide the AFA with a single document showing that these models existed and were delivered and not even a photograph.”

This raised doubts about the purchase and whether it was intended to cover up “hidden financial transactions”, said Mediapart.

The Congress has demanded a statement from Modi. “Does it now not require a full and independent investigation into India’s biggest defence deal to find out as to how much bribery and commission in reality, if any, was paid and to whom in the Indian government?” asked Congress spokesperson Randeep Surjewala.

Also read: With Rafale in its armory, IAF chief talks of ‘capability to strike first’