Mediapart publishes new evidence of kickbacks in Rafale deal, alleged false invoices for 'secret commission'

The French online journal Mediapart has alleged that fake invoices were made so as to enable French aircraft maker Dassault Aviation to pay at least €7.5 million in kickbacks to a middleman to help it secure the ₹59,000 crore deal with India for 36 Rafale fighter jets. The online journal published these alleged fake invoices.

“It involves offshore companies, suspicious contracts and ‘false’ invoices. The Central Bureau of Investigations (CBI), and the Enforcement Directorate (ED) have had proof since October 2018 that Dassault paid at least €7.5 million in secret commissions to middleman Sushen Gupta,” stated Mediapart in its report.

India had signed an $8.7 billion government-to-government deal with France to buy 36 Rafale warplanes made by Dassault. Though it was announced in April 2015, the agreement was signed almost a year later. This replaced the previous Congress-led United Progressive Alliance (UPA) government’s decision to buy 126 Rafale aircraft, 108 of which were to be made in India by the state-owned Hindustan Aeronautics Ltd (HAL).

The deal became controversial as the Opposition, led by the Congress, asserted that the price at which India was buying Rafale aircraft was now ₹1,670 crores for each, three times the initial bid of ₹526 crores by the company when the UPA was trying to buy the aircraft. It also pointed out that the previous deal included a technology transfer agreement with HAL.

Five months ago, Mediapart had reported that a French judge was appointed to head a probe into suspected “corruption and favouritism” in the deal. In a report in April 2021, the online journal stated that it was in possession of documents that showed Dassault and its industrial partner Thales, a defence electronics firm, paid “middleman” Gupta several million euros in “secret commissions” in connection with the deal. The highly sensitive probe into the inter-governmental deal signed off in 2016 formally began June 14.

It was following Mediapart’s “Rafale Papers” series of investigations into the secret dealings behind the contract, published in April, that French anti-corruption NGO Sherpa filed a complaint with the tribunal of Paris, citing “corruption”, “influence peddling”, “money laundering”, “favouritism” and undue tax waive-off surrounding the deal.

This April report revealed that the bulk of the payments were made before 2013. “According to an accounts spreadsheet belonging to Sushen Gupta, an entity called simply ‘D’, which is a code he regularly used to designate Dassault, paid €14.6 million to Interdev in Singapore over the period 2004-2013,” the report said. Mediapart investigation had revealed that Interdev was a shell company with no real activity and administered by a figurehead for the Gupta family.

The report said according to another accounts spreadsheet belonging to Gupta, Thales paid €2.4 million to another shell company between the years 2004 to 2008.

In another report in April, Mediapart claimed that Dassault paid €1 million to Gupta for manufacturing 50 large replica models of Rafale jets, even though the plane maker provided inspectors of French anti-corruption agency Agence Française Anticorruption no proof that these models were made.

The BJP government has said that it could not disclose the details of the price because of a confidentiality agreement with France, and the strategic reason of not showing its hand to India’s enemies. It said that the current deal also included customised weaponry.

The Supreme Court, which heard a public interest case on the deal in November 2018, and in December 2018, dismissed petitions seeking court-monitored probe into Rafale fighter jet deal, saying that there was no reason to doubt the decision-making process in the deal. In a February 2019 report, the government’s auditor, the Comptroller and Auditor General of India, said India had not overpaid for the jets.

In May 2019, the Supreme Court reserved the order on the pleas filed by former Union ministers Yashwant Sinha, Arun Shourie, lawyer Prashant Bhushan and others against the top court's judgment. The Centre had also filed an affidavit seeking dismissal of the review petition after some internal documents of the Defence Ministry related to the Rafale fighter deal came out in a section of the media.

In November 2019, the Supreme Court dismissed a batch of review petitions on the Rafale jet deals.