Mediapart investigation revealed that the manufacturer of the Rafale jets, Dassault Aviation, had paid about one million Euros to a company named Defsys Solutions for 50 models of the aircraft.
The third batch of Rafale fighter jets arrived in India last week. The majestic jets took off from France’s Bordeaux and landed at Jamnagar base. If you think with the delivery of Rafale jets the Controversy over the Rafale deal is over, then you might be wrong. After Congress failed to take off in the 2019 Lok Sabha elections banking on the Rafale Deal controversy, the issue is getting hardly any attention.
But a new report in French media has made us revisit the issue yet again. The investigation says that Dassault Aviation which makes Rafale Jets has paid One Million Euros to a middleman who is now arrested in India and under investigation for another VVIP chopper case scam.
Before we get to the investigation by French News Organization Mediapart, let us revisit what was the deal between India and France briefly.
In September 2016, India and France signed a €7.87 billion Intergovernmental Agreement (IGA) for 36 Rafale multi-role fighter jets in fly-away condition. India chose Dassault over its traditional partner Russia’s MiG. The deal has a 50% offset clause to be executed by Dassault Aviation and its partners in partnership with Indian companies. The basic cost of the aircraft is about ₹680 crore. This deal is India’s biggest-ever procurement. Besides the missile systems, the Rafale jets will come with various India-specific modifications, including Israeli helmet-mounted displays, radar warning receivers, low band jammers, 10-hour flight data recording, infra-red search and tracking systems among others. So far India has received three batches of the Rafale Jets.
Media Part Investigation
Media Part released an investigative report titled, Sale of French Rafale jet fighters to India: how a state scandal was buried in which it revealed that Rafale maker Dassault Aviation is under investigation by France’s anti-corruption agency. The anti-Corruption agency found that Dassault made payments to a company owned by a middleman who is now under investigation in India.
The allegation is that the manufacturer of the Rafale aircraft, Dassault Aviation, had paid about one million Euros to a company named Defsys Solutions for 50 models of the aircraft. These aircraft were to be given as “gifts”. Now, in France, The category of ‘gifts’ is treated as a serious matter especially when it is related to defence companies. This resulted in the company having to explain the cost.
The report by Mediapart says that during a scheduled audit of the group, the agency’s inspectors found that Dassault had agreed to pay one million euros to a middleman just after the 2016 signing of the Rafale fighter jet deal. That middleman is now accused of money laundering in India in 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 report says even after the apparent knowledge of the involvement of a middleman, the AFA decided not to refer the matter to prosecutors”.
Also Read: After poll defeat, Rahul Gandhi still believes ‘Rafale Deal’ as scam
According to the report, Dassault had provided AFA with a “proforma invoice” dated March 30, 2017. This invoice was supplied by an Indian company called Defsys Solutions. The report further added that the invoice was related to 50% of the total order (€1,017,850), for the manufacture of 50 models of the Rafale C. The price per unit was €20,357.
However, the report said Dassault was unable to provide the AFA with a “single document showing that these models existed and were delivered, and not even a photograph” when AFA inspectors subsequently found these details in mid-October 2018 and asked the company for an explanation.
“The inspectors thus suspected that this was a bogus purchase designed to hide hidden financial transactions,” it said.
“The inspectors thus suspected that this was a bogus purchase designed to hide hidden financial transactions,” it said.
How Did AFA Find About The Invoice?
Just like we have the Comptroller and Auditor General of India which audits govt firms, France has AFA which was set up in 2017. This anti-corruption agency is empowered to audit not only the government but also the Private firms to check for any possible corruption and whether large companies are implementing France’s anti-corruption procedures. AFA auditors combing through Dassault’s 2017 accounts found an item of expenditure costing 508,925 euros entered under the heading ‘gifts to clients’.
Mediapart report said that the subsequent confidential report of the AFA audit noted that the amount “seemed disproportionate in relation to all the other entries” under the same heading.
Mediapart report said that the subsequent confidential report of the AFA audit noted that the amount “seemed disproportionate in relation to all the other entries” under the same heading.
The report further said “The sum is indeed huge for a gift. Though French law does not set out precise limits, legal precedents suggest that giving a watch or an expensive meal costing several hundred euros can be enough to constitute corruption,”
What Exactly Is Defsys Solutions?
Now the Companies’ About page says that it is a systems integration company that provide advanced solutions for a variety of defence and aerospace applications. Integrated Electronic Systems, Electro-Optical Payloads, Thermal Imagers, Flight and Firing Simulators, Weapon Replicas, Electro-Mechanical systems, On-board electronic sub-systems, Automated Test Equipments (ATEs), RF & Microwave Sub-assemblies, Radar & Seeker Simulators, RF Test and Measurement systems.
According to the report, Defsys Solutions is one of Dassault’s sub-contractors in India for the Rafale deal. However, the company with 170 employees is not a specialist in making models and instead assembles flight simulators and optical and electronic systems for the aeronautical industry.
Connection to VVIP Chopper Scam
If that was not enough to build suspicion of corruption in the deal, the AFA found out that the Company belong to the Gupta family, one of whom is being investigated in the AgustaWestland VVIP chopper deal. Sushen Mohan Gupta was arrested by the Enforcement Directorate in March 2019 for kickbacks in the AgustaWestland deal and later released on bail.
Gupta is also alleged to have worked for Dassault and obtained confidential documents from the Defence Ministry in India.
Gupta is also alleged to have worked for Dassault and obtained confidential documents from the Defence Ministry in India.
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