How did India gain by dropping anti-corruption clauses from the Rafale deal, asks French portal

Hollande said that the Indian government proposed Anil Ambani’s company as the main partner of Dassault and there was no choice. In 2018 we had published another report revealing an internal document from Dassault in whicha Dassault executive confirmed that the partnership with Reliance was imperative for the Rafale deal.

The French national financial prosecutor who is in charge of political and economic crime investigations, in 2018 received a complaint from a French anti-corruption NGO highlighting suspicious facts about two French presidents. It was brought to notice that a Reliance subsidiary company received tax benefits from French authorities. A stipulated tax of around 151 million Euros was reduced to 7 million and a tax settlement was arrived at.

The settlement was suspicious on two grounds, the scale i.e. 143 million less than what was stipulated and the timing, it was around the time Rafale deal was announced. The financial prosecutor did not pursue the investigation and closed the case on grounds that it was not in the interest of France to pursue. She never officially recorded any documents to check whether any undue advantage was given to Reliance subsidiary or not. 

I cannot say that. [Smiles] But Gupta obtained confidential documents at a time when INT were involved in a price war with French negotiators. INT had done complex calculations for the fair price. The documents contained records of INT’s internal discussions, methodology, and file notings related to the pricing. We asked the Ministry of Defence both in India and France whether they were legitimately given to Gupta, but we got no reply.

Yes. They are from an Enforcement Directorate (ED) case file related to the Agusta Westland money laundering for which Gupta was investigated. All the documents we have published are in ED’s possession since 2019, real question is what did they do with them? Did they open an investigation in Rafale deal or not? We tried asking ED, but again did not receive any answer.

ED itself said it in a chargesheet filed in 2019 in Agusta Westland case that Gupta obtained sensitive confidential data from Ministry of Defence. They had given a list of these documents and some of them were related to the Rafale deal.

I do not know if they can be forced. But there is enough evidence on the table to justify launching of formal investigation both in India and France related to Rafale deal.

I can only say that Gupta obtained confidential documents from the Ministry of Defence precisely related to INT’s pricing tactics. Having that information in hand would definitely benefit if you are on the French side of the table.

The French team fought hard and fast to remove the anti-corruption clauses from the deal which are mandatory as per Defence Procurement Procedure of India. There was a lot of back and forth bargaining by Dassault to drop the clauses which happened in September 2016 just before the deal was signed by the Indian Minister of Defence (Manohar Parrikar)

I do not see any advantage for India in removing these clauses. They are meant to protect Indian taxpayers as they provide that in case of corruption India can cancel a deal and seek compensation. The benefit for French side is obvious.