Rafale deal | Sushen Gupta delivered classified documents on Indian negotiating team to Dassault: French report

'Middleman even obtained Excel sheet created by Indian team for calculating purchase price'

April 08, 2021 10:13 pm | Updated December 02, 2021 10:42 pm IST - NEW DELHI

India is liekly to get nine Rafale jets next month.

India is liekly to get nine Rafale jets next month.

Arms dealer Sushen Gupta, charge sheeted by Enforcement Directorate (ED) in the AgustaWestland VVIP chopper deal, supplied classified documents to Dassault Aviation on the Indian negotiating team when talks were gridlocked over benchmark pricing in the €7.87 bn Rafale deal, according to French media outlet Mediapart.

According to information gained by Mediapart, one of those “other defence deals” in the ED investigation which was not identified in the charge sheet, is the Inter-Governmental Agreement (IGA) signed in 2016 for 36 Rafale jets. In the official charge sheet dated May 20, 2019 against Mr. Gupta, the ED wrote that he had gained “sensitive data which should have only been in possession of the Ministry of Defence”. It also said “since kickbacks from the other defence deals are not a subject matter of the present investigation” about the AgustaWestland scandal, “separate investigations would be undertaken” regarding the other deals,” according to the report.

The report said according to information gained by Mediapart, one of those “other defence deals” in the ED investigation, which was not identified in the charge sheet, is the Inter-Governmental Agreement (IGA) signed in 2016 for 36 Rafale jets.

“In the official charge sheet dated May 20, 2019 against Sushen Gupta, the ED wrote that “since kickbacks from the other defence deals are not a subject matter of the present investigation” about the AgustaWestland scandal, “separate investigations would be undertaken” regarding the other deals,” the report said.

 

Referring to the CAG audit of the deal which found that the final cost of the Rafale jets was 17% less than the initial MMRCA tender offer and the Supreme Court ruling in 2019 that there were insufficient grounds for opening an investigation into the matter, the report said, “But that decision was made without the information gathered in the AgustaWestland probe by the Enforcement Directorate.”

In April 2015, Prime Minister Narendra Modi announced the direct purchase of 36 Rafale jets, citing “critical operational necessity” of Indian Air Force during a visit to France. In the negotiations for the deal, the Indian side demanded, as promised by France, that the cost of the Rafale jets should be the lowest ever offered by Dassault and presented the Eurofighter offer in 2014 for 20% discount on the Typhoon jet which lost in the MMRCA tender.

After “benchmark” calculations, the Indian negotiators concluded, in a confidential report dated August 2015, that the overall purchase price for the jets, including their weaponry, should be €5.06 bn, the report said, while in January 2016, Dassault proposed more than double the price, €10.7 bn excluding the missile equipment.

The talks got gridlocked over this as per the report and Mr. Gupta, obtained documents which included the minutes of meetings by the Indian Negotiating Team (INT), the arguments they had prepared to present to the French, and detailed notes on the calculations of the costs and the methodology employed. Mr. Gupta even obtained an Excel sheet created by one member of the INT for calculating the purchase price, the report said. “The Indian authorities had finally accepted the French offer of a total cost of €7.87 bn, a sum they had rejected six months earlier.”

The report also referred to a series of investigative reports by the The Hindu which showed how the anti-corruption clauses were removed from the deal and also the INT was sidestepped and the Prime Minister’s Office directly negotiated the deal.

In March 2017, one of the Gupta family’s Indian companies, Defsys Solutions, invoiced Dassault for 1 million euros for the production of 50 replica models of the Rafale jet as stated in the part one of the three part Mediapart series.

Defsys Solutions also became, as announced in a statement released by Dassault, one of the subcontractors to the Rafale deal, the report said adding, Dassault declined to disclose to Mediapart the nature or the cost of that contract. In addition, documents also show that Dassault and its French industrial partner Thales paid Mr. Gupta several million euros in secret commissions to offshore accounts and shell companies, using inflated invoices for software consulting. Mr. Gupta, who was contacted by email, and re-contacted on several occasions, did not respond to Mediapart’s request for an interview, the report said.

Responding to the reports, a Dassault Aviation spokesperson said in a statement that numerous controls are carried out by official organizations, including the French Anti-Corruption Agency and “no violations were reported, notably in the frame of the contract with India for the acquisition of 36 Rafales.”

Stating that the contract with India for 36 Rafales has been established on a government-to-government basis, the statement said, “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, it said a joint venture was set up in 2017 and built a plant 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.

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