Dassault Discredits Foul Play in Indian Rafale Sale

French jet maker Dassault Aviation has asserted that it did not grease Indian middleman’s palm for bagging the multi-billion dollar Rafale deal.

A report by French media outlet Mediapart claimed that Dassault and Thales paid €14 million (over INR 100 crore) to Sushen Gupta over a period of 15 years to clinch the Indian order for 36 jets in 2015. Dassault and Thales hired Gupta in the beginning of 2000s when India announced plans to buy 126 fighters. The payment was reportedly routed through Shell companies in Singapore and Mauritius, the report alleges.

India demanded that Dassault’s offer of Rafales should be the lowest ever. In a confidential report dated August 2015, the overall purchase price for 36 Rafale jets in fly-away condition, including their weaponry, was estimated to be around €5 billion. However, in January 2016, Dassault quoted more than double the price (€10.7 billion) for the planes without weapons. The talks got gridlocked over this and Gupta, obtained sensitive documents, the report said.

The Indian authorities finally accepted the French offer of a total cost of €7.87 billion, a sum they had rejected six months earlier.

In March 2017, one of the Gupta family’s Indian companies, Defsys Solutions, invoiced Dassault for €1 million for the production of 50 replica models of the Rafale jet. This company is now one of the subcontractors to the Rafale deal.

The Indian Negotiating Team (INT) had thrice insisted on retaining clauses that would’ve allowed the Indian government to cancel the contract if evidence of corruption or payment to middlemen to influence the deal surfaces. The clauses also empower the Indian Government to demand compensation from the supplier or vendor. Dassault each time pressed that the clauses be dropped from the final contract.

Arms dealer Gupta is already facing trial for receiving payoffs in the AugustaWestland VVIP chopper deal that came to light in 2013. The Choppergate scandal, involving bribe paid to middle men and several senior officials, amounts to nearly $35 million (INR 2.5 billion).

Responding to the claims, Dassault Aviation said in a statement: “Numerous controls are carried out by official organizations, including the French Anti-Corruption Agency. No violations were reported, notably in the frame of the contract with India for the acquisition of 36 Rafales. Dassault Aviation wishes to reiterate that it acts in strict compliance with the OECD Anti-Bribery Convention and national laws, in particular the law of December 9, 2016 known as Sapin 2. The contract with India for the acquisition of 36 Rafales has been established on a government-to-government basis. This contract, as well as the offsets corresponding contract, meet the criteria established by these regulations and are being executed in full transparency between the various government and industrial partners.”

On the offset contract with Reliance Group, Dassault said a joint venture, Dassault Reliance Aerospace Ltd (DRAL), was set up in 2017. It added that a plant was built in Nagpur that has been producing numerous Falcon parts and pieces since 2018. “Dassault Aviation and its partners are working with 60 companies in India and negotiations are underway to establish potential new cooperations,” the statement added.