Dassault paid 1 million euro as ‘gift’ to Indian middleman in Rafale deal: French report
The manufacturer of French combat jet Rafale agreed to pay one million euro to a middleman in India just after the signing of the Indo-French contract in 2016, an investigation by the French publication Mediapart has revealed. An amount of 508,925 euro was allegedly paid under “gifts to clients” head in the 2017 accounts of the Dassault group.
The irregularity was first discovered by the inspectors of the French Anti-Corruption Agency, Agence Française Anticorruption (AFA), during their scheduled audit of Dassault.
“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,” Mediapart reported citing the confidential audit report on Sunday evening.
This amount “seemed disproportionate in relation to all the other entries”, said a subsequent confidential report of the AFA audit.
The French Anti-Corruption Agency, however, did not flag the prosecution authorities over the alleged payment, which, according to the French publication, “raises questions over both the justice system and the political authorities”.
The audit coincided with a tip received by the French public prosecution services’ financial crimes branch, the Parquet National Financier (PNF), in October 2018 which alleged irregularities in the defence deal.
According to the AFA report accessed by Mediapart, Dassault tried to justify “the larger than usual gift” with a proforma invoice from an Indian company called Defsys Solutions.
Dated March 30, 2017, the invoice suggested that Defsys was paid 50 per cent of an order worth 1,017,850 for manufacturing of 50 dummy models of the Rafale jets. Each dummy, according to the AFA report, was quoted at a hefty price of 20,357.
However, the Dassault group reportedly was unable to provide any documentary evidence to the AFA inspectors, which could establish the existence of those models. Dassault could also not explain why the expenditure was listed as a “gift to clients” in their accounts.
Defsys is one of the subcontractors of Dassault in India which has been linked with controversial businessman Sushen Gupta. Sushen Gupta was earlier arrested and later granted bail for his alleged role in another major defence scam in India, the AgustaWestland VVIP Chopper case.
The Enforcement Directorate has charged Sushen Gupta for allegedly devising a money-laundering scheme for the payouts during the purchase of the helicopters. Dassault and Defsys have not yet issued a statement in this regard.
Speaking with India Today TV, Mediapart reporter Yann Philippin who reported the story said this was first of his three-part investigation on the controversial Indo-French fighter jet deal.
“The biggest revelations are due for episode 3,” he told India Today TV.
The 7.8 billion government-to-government deal for 36 fighter jets was signed in 2016. The Indian Air Force has already raised its first squadron of the Rafale jets at Ambala and is due to raise the second one at Hasimara in West Bengal.
Source: India Today