French expose on €one million ‘kickback’ in Rafale deal may hurt BJP in ensuing assembly elections

By Abdul Bari Masoud

New Delhi:  Following the sensational revelations of “kickback’ in the Rafale deal by the French News portal Mediapart.fr, the main opposition Congress and CPI (M)on Monday asked the Prime Minister Narendra Modi to respond to the revelations. They also revived  the demand for a full and independent investigation into the deal to find out how much bribery and commission in reality, if any, was paid and to whom in the Indian government.  In the thick of five assembly elections, the French expose on €1million kickback has provided fresh ammunition to opposition to attack the PM and BJP.

India’s ‘biggest defence deal i.e. purchase of 36 Rafale jet fighters from Dassault Aviation’ is a sordid saga of ‘loss to public exchequer’, ‘squandering national interests’, propagating the ‘culture of crony capitalism’, General Secretary Randeep Singh told reporters while briefing the media at the party headquarters here.

“The devastating sensational revelations in the last evening report of French News portal/agency – Mediapart.fr have now revealed the existence of a middleman, payment of commission and red flags raised by the French Anti-Corruption Agency – AFA,” Surjewala said.

He alleged all the details of the deal is ‘shrouded in secrecy’ by negating the mandatory aspects of procurement prescribed in ‘Defence Procurement Procedure.’

 Alleging that Prime Minister Modi consistently and steadfastly refused to submit to an investigation, the Congress leader said so much so that the government did not even submit full documents to the CAG and for the first time in India’s history.

“Sadly and regressively, we saw a CAG report where portions have been taken out by CAG, so that the price could not be known. Tell me how the price of a defence product can be a stead secret, but, a section of the media and the entire Government projected as if price is a defence secret”.

 On a further question, Surjewala said there is more than prima facie case now as this has come from an audit of the company by the French Anti Corruption Agency.

So, why can’t the present Prime Minister order an impartial investigation now, so that we know who in his Government took the bribe and the commission and how many thousand crores, if any were, he asked.

The allegations of causing loss to public exchequer, bribery and payment of commission in India’s biggest defence deal once again stare in the face of the Modi Government.

He also placed some facts about the deal:

  1. 10th April, 2015 – Prime Minister, Shri Narendra Modi announces purchase of 36 Rafale Aircrafts – ‘off the shelf’ during his visit to France.
  2. 23rd September, 2016 – Modi Government signs a formal agreement with France to buy 36 Rafale Aircrafts for US$ 8.7 Billion or €7.8 Billion i.e. Rs.60, 000 crore.
  3. Defence Procurement Procedure as also the stated Indian Government Policy envisages that there will be an “Integrity Clause” in every defence purchase contract. There can be no middleman or payment of commission or bribe. Any evidence of middleman or commission or bribery has serious penal consequences of banning of the supplier defence company, cancellation of contract, registration of FIR and imposition of heavy financial penalties on the defence supplier company.
  4. An investigation conducted by “French Anti-Corruption Agency – AFA” has now revealed that after signing of the deal in 2016, Dassault i.e. manufacturer of Rafale has paid 1.1 Million Euro to a middleman i.e. Defsys Solutions. This amount was shown as “Expenditure by Dassault as “Gifts to Clients”.

On 30th March, 2017, Dassault gave an explanation to the French Anti-Corruption Agency stating that this was payment for manufacture of 50 models of Rafale.

Reportedly, three questions were asked by the French Anti-Corruption Agency from Dassault – (a) Why has Dassault asked an Indian company to make models of its own aircrafts and that also at €20,000 per piece?; (b) Why was this expenditure then entered as “Gifts to Clients”?; and (c) Were these models ever made? If yes, where and when were they displayed?

Reportedly, no reply was ever submitted to the satisfaction of French AFA by Dassault pointing towards a hidden financial transaction.

  1. Defsys Solutions, India is actually a company undertaking assembly of flight simulators and optical & electronic systems etc.

 Congress also some pointed questions to PM Modi to answer the nation:

  1. Was the payment of €1.1 Million shown by Dassault as ‘Gifts to Clients’ in reality a commission paid to middleman for the Rafale Deal?
  2. How can “Middleman” and “Payment of Commission” be permitted in a ‘Government to Government Defence Contract” or in any defence procurement in India in violation of the mandatory Defence procurement Procedure?
  3. Has it not vitiated the Rafale deal entailing imposition of heavy financial penalties on Dassault, banning of the company, registration of an FIR and other penal consequences?

Meanwhile, CPI(M) also said current revelation in a French media portal that one million euros were paid to a “middleman” in the deal to buy 36 Rafale jets has once again raised the issue of kickbacks and other illegal payments in the Rafale deal.

The dogged refusal by the Modi government to order a probe into the Rafale deal raises suspicion that it has something to  hide in the matter,CPI(M) leader said.  The CAG audit report could not obviously look into the issue of illegal payments.

The CPI(M) demands the institution of a high-level investigation into the whole business of cancellation of the earlier order and the fresh order for 36 planes at a higher cost.

Political analysts say the French expose has come at a time when five state assembly elections are underway and the BJP is leaving no stone unturned to win these. According to them, it will provide fresh immunizations to opposition parties to attack PM Modi and his government on the corruption issue which may mar BJP’s prospects in all states including West Bengal in particular. In Kerala, BJP is using alleged gold smuggling issue but now it may face the music on the Rafale issue.

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