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French major Dassault paid 1 million euro to Indian middleman after Rafale deal: report

Dassault says money was used to pay for making of 50 large replica models of Rafale jets, even though inspectors were given no proof that these models were made, says a report by French magazine Mediapart

French major Dassault paid 1 million euro to Indian middleman after Rafale deal: report

India and France had signed a Rs 59,000 crore deal in 2016, under which Dassault aviation would manufacture 36 Rafale jets for India

French combat jet company Dassault paid 1 million euro to an Indian middleman after signing of the India-France agreement in 2016, a French magazine Mediapart report has revealed. Of the entire amount, 508,925 euro was paid under "gifts to clients" head, an investigation into Dassault group's 2017 account books has revealed.

As per Mediapart report, the irregularity was first discovered by the sleuths of the French anti-corruption agency, Agence Francaise Anticorruption (AFA), during its scheduled audit of Dassault. The audit report is not open for public access. "The company said the money was used to pay for the manufacture of 50 large replica models of Rafale jets, even though the inspectors were given no proof that these models were made," the Mediapart reported on Sunday evening.

The AFA audit report says the amount "seemed disproportionate in relation to all the other entries". The Mediapart report flags concerns over the AFA audit report, saying the matter was not referred to the French prosecution authorities for further probe and legal action. It said the inaction "raises questions over both the justice system and the political authorities".

The report says the AFA audit had found that Dassault justified the "larger than usual gift" with a proforma invoice from an Indian company, Defsys Solutions. Both Dassault and Defsys are yet to comment on the controversial French media report. The invoice, dated March 30, 2017, suggests Defsys was paid 50 per cent of an order worth 1,017,850 to make 50 dummy models of Rafale jets, each costing 20,357 euros.

Dassault was also not able to back its "gift" claims with substantial evidence regarding the existence of those dummy models and that is why they placed it under the gift category in its accounts. Notably, Defsys is one of Dassault's subcontractors in India, which is linked with controversial businessman Sushen Gupta.

Also read: Infographic: What makes Rafale potent?

Defsys provides solutions for a variety of defence and aerospace applications. It is a privately held entity that was set up in 2007. Gupta was earlier arrested for his alleged role in AgustaWestland VVIP Chopper scam in March 2019. As per the Enforcement Directorate probe in the AgustaWestland scam, Gupta allegedly devised a money-laundering scheme for the payouts during the purchase of the helicopters.

During the time of the audit in October 2018, the French public prosecution services' financial crimes branch, the Parquet National Financier (PNF), had also received a tip in which irregularities were flagged to the authorities, the report adds.

Speaking with India Today TV, Mediapart reporter Yann Philippin, who reported the story, said it's the first of his three-part probe on the Rafale jet deal. "The biggest revelations are due for episode 3," he told India Today TV.

Also read: We are totally against corruption, ready for any probe, says Dassault CEO on Rafale deal

India and France had signed a Rs 59,000 crore deal in 2016, under which Dassault aviation would manufacture 36 Rafale jets for India. India received the first batch of five Rafale aircraft on July 29, 2020, almost four years after it signed the inter-governmental deal.

Following this, the second batch of three Rafale jets landed in India on November 3, 2020, and the third batch of another batch of three jets joined the IAF on January 27, 2021. The delivery of all 36 aircraft is likely to be completed by 2022-end. The fourth batch of three Rafale fighter jets landed in Gujarat's Jamnagar on Wednesday, March 31.  

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