Rafale deal controversies: A fact check

Missteps in the way the Rafale deal was structured continue to plague the Modi government

Missteps in the way the Rafale deal was structured continue to plague the Modi government
Missteps in the way the Rafale deal was structured continue to plague the Modi government

France to opens judicial probe into Rafale jet deal

The Rafale jets purchase controversy is refusing to die. From 2008 onwards India’s decision to purchase Rafale Jets from France-based company Dassault is facing one controversy after another. On Friday, Jul 2, 2021, French media Mediapart reported that a Judge in France will probe into the alleged corruption in the Rafale fighter jet deal between India and France in 2015. The investigations are also likely to look into the role of the then French President Francois Hollande and Dassault’s Indian partner Anil Ambani’s controversial joint venture. The two countries had inked a government-to-government deal worth over 7.8 billion euros (Rs.58,000 crores) for 36 Rafale planes for the IAF by cancelling the aborted deal of 126 jets initiated during the Congress regime.[1]

Though the 36 Jets purchase from Rafale is a direct deal between India and France, the role of Anil Ambani as a Joint Venture (JV) partner with Dassault in the offset contract was also seen as controversial. As per the French Media, the probe also covers how in the JV, Dassault has only 49% of the shares having invested 150 million euros and Anil Ambani’s firm has 51% shares despite investing just 10 million euros! This shows the role of Anil Ambani in clinching the deal which was struck in 2008.[2]

When the deal was finalized and Mukesh Ambani opened his assembling company in 2012, BJP leader Subramanian Swamy filed a complaint to the then Defence Minister A K Antony about the frauds in the selection of Rafale as the lowest bidder.

The French media says Dassault and Anil Ambani’s firm entered into a contract 15 days before Indian Prime Minister Narendra Modi and French President Francois Hollande announced the direct-buy-deal of 36 jets.

On Friday, the French website said that an independent French magistrate will probe into the allegations of corruption and favouritism in the pact. The judicial probe was ordered by France’s national financial prosecutor’s office following Mediapart’s fresh reports in April of alleged wrongdoings in the deal, Mediapart said.

What are the controversies in the deal?

First, in 2008, India decided to buy 126 Rafale Jets after inviting tenders. The main contender Eurofighter lost the contract. At that time Rafale was used only in four countries – Libya, Qatar, Saudi Arabia and France. Multinational Eurofighter was used in many countries. Historically, India was aligned to France as it was the lone country supplying Jets to India after the Soviet Union, which collapsed in the early 90s.

Many eyebrows were raised as to why the purchase of 126 Jets by the Congress-led UPA regime was already caught for rampant corruption. At that time Rafale’s India agent was Mukesh Ambani’s Reliance and as per the deal only 18 flights would be delivered by France and the remaining 106 flights would be assembled in India by a company formed by Reliance and the public sector undertaking Hindustan Aeronautics Limited (HAL). At that time, the bankrupt Dassault was producing only 11 Jets per year and this supply was already committed to Qatar, France, and Libya. Many questions were asked as to how Dassault could build 18 Jets and source the parts for 106 Jets components to India.

When the deal was finalized and Mukesh Ambani opened his assembling company in 2012, BJP leader Subramanian Swamy filed a complaint to the then Defence Minister A K Antony about the frauds in the selection of Rafale as the lowest bidder. Then BJP leader Yashwant Sinha also filed complaints about Rafale’s selection process and technical failures faced by other countries. These complaints forced the scam-hit Congress to stop going further. Recently former Defence Minister A K Antony said these complaints sabotaged the Congress regime’s Rafale deal of buying 126 Jets.[3]

PGurus had published a detailed report titled “Untold Stories on the Rafale deal” on Rafale’s controversies and facts.[5]

By the end of 2013, as per a family settlement, Mukesh Ambani handed over his group business in Defence Sector to his bankrupt brother Anil Ambani. When the new BJP Government came in mid-2014, the French were also lobbying the new Government headed by Prime Minister Narendra Modi. France is a strategic partner of India in Nuclear and Fighter Jets supply. Bankrupt Anil Ambani was looking for new opportunities. Then came the finalization of the Rafale deal by reworking by direct supply of 36 Jets as a Government-to-Government deal. The only unethical part of this deal is that the Government of India allowed offset contracts to Anil Ambani, who is already bankrupt and a failed businessman facing controversies and his companies were involved in all the scams during the Congress regime. Why did the Modi Government allow Anil Ambani to meddle in this deal? The Modi Government’s excuse was that Anil Ambani was Dassault’s choice. Even if it was Dassault’s choice, the Government of India could have told France that if they want the deal, avoid controversial guys like Anil Ambani. Why was this not communicated? That is why the Government of India under Modi is facing heat on this deal today. It is simple – if you maintain bad friendships, you will be haunted by the bad friend’s activities.

Last but not least: Has Dassault, which got almost all the money from India for supplying 36 Jets, fulfilled their commitment of offset contracts around Rs.20,000 crore (30% of the deal value) projects? The Government of India owes an answer. As per a CAG Report of 2020, Dassault has not yet met the commitment even after getting almost full money from India.[5]

References:

[1] ‘Rafale Papers’: France opens judicial probe into fighter deal with India, new revelations emergeJul 02, 2021, Mediapart

[2] Rafale deal: Why did Dassault choose Reliance over HAL? The CEO respondsOct 12, 2018, Business Standard

[3] PM spreading false information: A.K. AntonyMar 05, 2019, The Hindu

[4] Untold stories of the Rafale deal and a fact check of the allegationsSep 24, 2018, PGurus.com

[5] Rafale deal: Dassault Aviation yet to meet offset commitments of contract, CAG tells ParliamentSep 24, 2020, Scroll

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3 COMMENTS

  1. The people talk as if Ambani and Adani are the creation of Modi over the last 7 years. Given the size of the big business houses they can only be regulated by tougher laws to curb malpractices, they have reached a stage where their contribution to economy cannot be overlooked. All that needs to be done is to make sure they do not run parallel governments. That is possible only the the key players in the administration are not on their pay rolls.

  2. India is being run by Ambani . Adani is a Modi subsidiary.
    Earlier under Congress Ambani was only a favoured party but not in charge
    In recognition of their gratitude of their presence, they made Pranab a Bharat Ratna.
    Without him they would not be where they are.
    Now Ambani is wearing the boots. He pulls the strings on his puppet whenever required.
    That is why you will never see anything bought to a conclusion. The crooks of yesterday and today will continue..
    The dogs are put on the scent for scams only for public consumption.
    They are called off or diverted as and when required.
    Public memory is short.
    The media is interested only in money.
    Demo financed many things.
    The sooner this whole thing self destructs the better.

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