- N. RAM, The HINDU
The book, "The Rafale Deal: Flying Lies? The Role of Prime Minister Narendra MODI in India’s Biggest Defence Scandal" was published in December 2022.
Here's an exclusive interview where Anubandh KATÉ brings together India's leading investigative journalists & authors Ravi NAIR and Paranjoy GUHA-THAKURTA, along with Yann PHILIPPIN of Mediapart, France. In this first part of the three session interviews, we minutely dissect the India specific details of this mega Defence deal which has long been mired in corruption quagmire.
In this interview, Yann PHILIPPIN claims that in the thick of this sensitive and costly negotiation, through Sushen GUPTA (Dassault's Indian intermediate), Dassault Aviation managed to get hold of confidential documents of the India Negotiating Team (INT) as well as the details of the revised offer of its competitor Eurofighter (with 20% discount). This severely weakened India's chances to procure a fair deal. He further claims that both the French and the Indian governments are refusing to cooperate with the investigation probe initiated by the French judiciary.
In the third session of this series of interviews, we will be joined as well by renowned French investigative journalist, Ariane LAVRILLEUX, who will present to us the "Egypt Papers" (sell of French armaments, including Rafale to Egypt).
Note:
1) These interviews were
recorded in July 2024.
2) The interview has simultaneous French and English subtitles.
Link to the video of the interview.
https://youtu.be/CITf43kXb6w
Anubandh: Hello all! My name is Anubandh KATÉ.
I am very happy to invite two of India's leading investigative journalists who have written on the Rafale deal scam and I am also lucky to be joined by Yann PHILIPPIN, investigative journalist from Mediapart (France) who has extensively written and spoken on this deal. Yann has also collaborated with his Indian counterparts. So, welcome all of you. I will just briefly introduce my guests. Ravi NAIR is an investigative journalist and he is the lead author of this book (The Rafale Deal - Flying Lies?). He has worked with Paranjoy GUHA THAKURTA who is quite a renowned name in India and he is the co-author of this book. And Yann PHILIPPIN, as I said is from Mediapart. So, before I get into the details of this contract, I must state some personal disclaimers. I am 42 years old and I am born in India. I have studied in India, I have grown up in India and I have spent 10 years in Europe, including eight years in France. Deals or issues such as these are very important (to me). Thus, I begin now our session by sharing with you something that would give us a macro view.
India is the biggest arms importer.
This is a chart from the Financial Times this year (2024). The amount (for India) is around 15.4 billion dollars and I suppose, it was not clear in the article but it is a cumulative buy for the last few years.
The next slide is the market share of the leading exporters of major weapons.
You see the No. 1 is United States. Then there is Russia and France is third, neck-to-neck with Russia. These figures keep changing, for instance, in 2022, France was the second and Russia became the third one. The next slide is about the French arms exports in different years.
In 2021, it was 11.7 billion Euros. And in 2022, it is not part of this chart; it crossed more than 20 billion Euros.
Next slide is about which countries are the buyers of the French armaments.
So, you see, first is Egypt 12.28 billion Euros. Then is India, the second one at 11.79 billion Euros. Then there is Qatar and Saudi Arabia and other countries.
Next slide is about which are the biggest French Arms companies that sell or manufacture these armaments.
Then you have how the Rafale has fared in the last few years in terms of sell?
You can see a shoot up. 26 Rafale were sold in 2019 and then 25 in 2021. These were delivered. I think Ravi can tell us more and link what happened in terms of India's buy of these deals and in which particular year.
As a help to our audience, since this is a very complex topic, and as there will be a lot of acronyms which are difficult to follow, I have put up here abbreviations from the book.
The audience can later come back and check these, if they need.
I invite you now, if you have
any comments on these general slides. You are welcome to comment. Any
one of you, else we can proceed.
Paranjoy: I have one small comment. India is one of the biggest buyers of armaments from Israel.
That is one point I wanted to flag and this proportion has varied over the years but often one fourth or 25% of all the armaments exported from Israel have been purchased by India. And something which is relatively recent is the joint ventures that have come up between Israeli and Indian companies which have been selling equipments. The Indian joint ventures selling equipments to Israel, including the web, the military grade drones which have been used in Gaza or Palestine. I just thought I will make this as an observation. One of these joint ventures making these drones also called UAVs - Unmanned Aerial Vehicles are with the joint venture involving the Adani Group of India. There are several other equipments which are being exported now from India to Israel though as you have pointed out India is a net importer of armaments and the largest in the world followed by Saudi Arabia.
Anubandh: True.
Paranjoy: That is all I want to say.
Anubandh: We have a special slide of joint ventures and of course, we will talk there what you just mentioned.
So, I continue. I would now like to ask the question, why there was the need to write this book? I refer to the introduction that you have written in the book and the main motivation for you was that you believe that the full story about this deal, the Rafale deal needed to be told in detail and you wanted to demystify the complex technical aspects of it. Importantly, for the lay reader as well as for the specialist. And it is a proof that (you have succeeded in this goal), since I am talking and discussing this book with you being a lay reader. Because I have no background of legal terms or Air Defence deals, so I congratulate you for that! Further, you have said that you have not put out information that can be construed to be against the national security interests of India, which is important. You thought it was important to talk about this book because substantial expenditure of taxpayer’s money is involved in this deal and there is a public interest that has to be served. You tried to place on record all sides of the story by interviewing dozens of knowledgeable persons, those which were supportive and also those who were opposed to this deal. Some of them agreed to talk to you and not others. Therefore, this is what I take out from the book. If there is anything additional you would like to clarify, why there was the need to write this book, I invite you to speak now.
Paranjoy: Would Ravi, Ravi would you like to say something about why you felt it was important to write this book?
Ravi: If we look at Defence deals, they always attract a lot of controversies and most of the time these controversies are never addressed. Never put (to scrutiny) and after some time maybe some discussion in the parliament, some ruckus in the parliament, a few articles here and there and the topic just vanishes. Nowadays, Defence purchase for any country is important, especially for a country like India which has two porous borders and two nuclear powers as its neighbors, Defence is very important. Defence purchase is very important. The Defence capabilities of (the) country are very important. At the same time, when a particular Defence deal is structured, it should go through a lot of checks and balances. There should be a lot of discussions among which part of the military like it is Air Force or Navy or the Military itself, if they are purchasing within that group. A lot of discussion should happen. At the end of the day, public money is utilized for these purchases. In this particular case, one thing very unprecedented happened. On an official visit, the Prime Minister of India (Narendra MODI), without any consultation, without any pre-discussion, announced in France that India will purchase thirty-six Rafale fighter jets from Dassault Aviation in a government-to-government deal. Of course, there was a (judicial) trial, there was a tender. Most of these things are detailed in the book. But in this particular case, it was just a unilateral decision. Because of this Dassault did not have to share the Transfer of Technology (ToT). They did not have to transfer the technology or the know-how, how to manufacture a jet. This was financially a good decision for Dassault but for India, it was a bad decision. That is one part of it. Second, when the deal was announced unilaterally, the price of the product shot up. It went more than double from which was earlier. There are many reasons for that. However, it was a loss for India, in that sense. Moreover, this was through the involvement of a private company, in the name of Reliance ADAG (Anil Dhirubhai Ambani Group). Therefore, we thought these are important things. These should be put out and all the facts should be available in the public domain in the form of a book. That is how this book was written.
Anubandh: Thank you.
Paranjoy: If I can add to what Ravi has said as his co-author and the publisher of the book. Firstly, this Rafale deal and the controversies around this deal. The controversies have been there for more than six years. Moreover, yes, all Defence deals attract a lot of attention, attract a lot of controversy. And as Mr. RAM, Narasimhan RAM, who is associated with The Hindu publication, the group, and he was one of the persons who highlighted the Bofors deal that resulted as one of the contributory factors behind the electoral defeat of (Prime Minister) Rajiv GANDHI in 1989, were the charges on the Bofors deal. These are Swedish field guns or howitzers. Now what happened six years ago is when the Bofors deal took place, Ravi in a sense was the first person to highlight it and he was not a journalist then.
Ravi: Rafale… Rafale.
Paranjoy: Sorry, I beg your pardon, what did I say?
Ravi: You said before, it is Bofors. It was not six years ago, it was seven and a half years ago!
Paranjoy: Sorry. Seven and a half years ago, okay. I stand corrected Ravi. Seven and a half years ago, Ravi became an accidental journalist. Ravi used to work within the corporate sector and just out of the, literally out of the blue, he started connecting the dots and started putting out information in the public domain. And he published a long piece that was published as a series of articles in a website called “Janta Ka Reporter”. And then the entire controversy was picked up by Rahul GANDHI, who is a prominent leader of the Indian National Congress (INC), the main opposition party, who is currently the leader of the opposition in the lower house of parliament in India. However, the point I am making is something else. In 2019, before the elections, Rahul GANDHI made this into an election issue. The slogan was, “Chowkidar Chor Hai”, which translated means, the person who is supposed to guard you is himself the thief. Now, the BJP hit back at it and they said, “Mai bhi Chowkidar”, that we are the guardians, we are the people who protect the country. And the Rafale deal failed to make, have any impact on the electoral outcome in 2019. So, people were asking us, why are you bringing this up again? The Supreme Court has said there was nothing wrong. We critically examined the Supreme Court's decision. And we argued that the Supreme Court ignores several important aspects, which it should not have. That is not easy for two journalists to do. I mean, we are, after all, criticizing the highest court of the land. We also criticized the Controller and Auditor General (CAG). So, everybody said, the government got a clean cheat, was given a clean cheat by the Supreme Court. It was given a clean cheat by the Controller and Auditor General of India. Whereas in this book, we argue in some detail that it was not as simple as that. I mean, it took us a lot of time, a lot of effort. And as you pointed out, Anubandh, that we spoke to people who support the deal. We spoke to Air Marshal Raghunath NAMBIAR. We had a detailed conversation with him and he vetted the transcript of the manuscript before we published it and it is towards the end of the book. It was given in great detail and Air Marshal NAMBIAR chose to retract certain portions of the book.
Ravi: Not the book, his interview.
Paranjoy: The transcript of the (interview) that we had with him. Then two points I want to say before I conclude.
Ravi: Please complete. He retracted almost 40 % of what he had said.
Paranjoy: But we kept (our word), we were faithful to him. We still have the recording of what we did. We were very, very faithful. We kept our word. We spent a long time with him. This is August 2020. The book came out like more than two years later and we spent a lot of time with him and it lasted nearly three hours. We were first surprised that he gave us (the interview). Then, I suppose, when he saw the transcript he realized maybe he should not have said what he did. Be that as it may, we have put it whole. I mean, if you go through the book from page 422, the interview with him is going all the way from 422 page number to 465.
Anubandh: Yeah. I have (planned) specific questions for you related to this interview.
Paranjoy: One last point I wanted to make before (I conclude). The entire discussion that we had on the occasion of the launch of the book, which was December 2022 at the Constitution Club of India, where experts spoke. It is all available on YouTube for anybody and everybody to see. And the longest chapter of the book is called “The French Connection”. That means, everything now (depends on) what happens in France. It is very, important. I am sure Yann and others will be able to talk about it. But the book has done better than we expected. We were expecting people to, you know, file some sort of a defamation suit. However, not a single, not a single line has been refuted. After the French president came to India, This was in August of 2023, we brought out. I am sorry, after India's Prime Minister Narendra MODI visited France as a guest of honor in July 2023, during the Bastille Day celebrations, we updated the book and we added some new parts to the book just so that we could be updated with everything that we wrote about it.
And so this is the background of the book and for the information of those who are watching you and viewing you, we have the English edition in both hardcover and paperback but we also have an edition of the book, a translated version of the book in Hindi and in Marathi. Who knows, maybe we are hopeful, it will come out in the French language!
Anubandh: Certainly, we would look up to that. What I found was remarkable about this book was also the fact that a lot could be said by just observing what is being said (in public domain) by different ministries, different politicians in India, in France. I believe that it is a remarkable work that you have done. You talked about N. RAM. Before we get into the details of this deal and the book, I would like to read a passage that he has written for you and he summarizes well why this is a scandal. So, N. RAM says, “The document backed charges leveled against the government included the bypassing of institutions and the violation of mandated or standard procedures laid down for Defence acquisitions, resulting in a massive loss to the national exchequer, striking an arbitrary new deal at an exorbitant cost to shortchange the Indian Air Force, getting the Prime Minister's office to conduct parallel negotiations with the French side, thus weakening the negotiating position of the Ministry of Defence and the Indian Negotiating Team (INT), covering up the corruption involved by refusing to disclose the pricing details and further by dropping the critical provisions for anti-corruption penalties, days before the signing of the intergovernmental agreement, giving up the demand for bank guarantees and rigging the offset clauses and arrangements in a deal to favour a few crony capitalists. Thus, I suppose this is well summarized. Ravi, do you have a comment or Paranjoy on this summary that N. Ram has offered to us?
Paranjoy: I think N. RAM’s summary is an excellent summary.
Ravi: That is the crux of the book and that is what
we tried to unearth and publish. So, that is the book. As observers and as
journalists, these are our findings. Thus, N. RAM summarized it in a beautiful
way. That is it.
Anubandh: Perfect, I agree. I would like to share something now with you again, because I consider it to be important to look at the chronology of events, because there are lots of things which happened in this deal. (By the way), the word chronology is now made (in)famous thanks to our Home Minister. I believe, it is important to talk about this.
I was surprised when I read in the book that all this started with the Indian Air Force (IAF) wishing for more Mirage 2000, which are French, made by Dassault. Then this was broadly converted into a request for 126 Rafale, out of which 18 were to be “fly away”, to be made and fabricated, manufactured in France, and 108 in India by Hindustan Aeronautical Limited (HAL), a public sector company. Finally, what we got were just 36 Rafale and all fly away.
Thus, I will walk you through this chronology and later you can comment. So, the NDA government, National Democratic Alliance government under the Prime Minister ship of late Atal Bihari VAJPAYEE. This was between 1998 to 2004, broadly in that period, not much happened. All that they decided that there will be no single vendor purchase and there should be competitive bidding.
And the actual action started under the UPA, United Progressive Alliance First Government, from 2004 to 2009. The first document that we had was Air Staff Qualitative Requirements (ASQR), with 630 odd points. This was used to make the very detailed Request For Proposal (RFP) in 2007. The bids were received in 2008.
Then we move to the UPA2 government between 2009 to 2014. The submission of selection report by Indian Air Force was in 2011. The request for revised commercial bids by the government was made thereafter. The declaration of the lowest bidder was in 2012. The negotiations with Dassault were conducted from February 2012 to April 2014, which took 26 months in all. Then Dassault also signed a work share agreement for the production of the aircrafts in India, as well as Transfer of Technology (ToT) with HAL. That was in March 2014.
The last part now, the interesting part is with the MODI government 1.0, from 2014 to 2019. The request for 126 aircraft was now reduced to 36 and all of them were to be made fly away in France. There happened the announcement by MODI in Paris to buy 36 flyaway Rafale jets in April 2015, as was mentioned earlier by Ravi. Then a government-to-government deal was signed in September 2016. Later, during MODI 2.0 government, between 2019 to 2024, the first Rafael Jet was delivered to India in October 2019 and the last one in 2022. So, Ravi, Paranjoy and Yann, do you agree with this chronology? Are any details missed or what do you think?
Ravi: If you look at the chronology given in the book, it is much detailed. You have taken a few selected points to show the start, how it was finalized and the end. What happened in between and when it happened, that is very important. In a period of one hour, if you take just few minutes to explain this, that will not do any justice to the book.
I mean, Yann is here. He knows a lot about the deal. Nevertheless, certain parts like how the deal started, before it is finalized in 2011, what happened before that and before the announcement exactly what was going on. Some part of it, Yann has published, but the rest of it, he might not be aware of. How the ministries communicated in between them, how & when the agreement was finalized, what was the response of these ministries, how they opposed it or how they put it to the competitive authority to decide. In India, the competitive authority was just one man then, even now for that matter. It was just a one-man show. Thus, without people reading the complete book, if we take only this much as chronology, I would say that we will not be doing any justice. This is just a very fast go through.
Anubandh: Sure. Ravi, this (interview with Yann and you both) is a beginning, this is not an end. It is (essentially) an invitation to the audience to read this very complex book. I tried to summarize it, but you are right, the book is much more detailed.
Paranjoy: In fact, the book is 532 pages. In addition, if you look at the chronology of events, that itself is, it ends at 505, but it begins, one minute, at 466. So, I mean, it is well over, it is about 40 pages, a little more than 40 pages. In fact, if somebody wants to read just the chronology of events, you will get a decent summary of the book.
Ravi: Yann, what we can do is we can send you the book. (Please) go through it. The most interesting part would be the RFP. The RFP floated in 2007. We retracted certain portions which we felt will affect the national security of India. Thus, we just removed it. In your articles, one point which came up every time when the price came up, Dassault and the Indian authorities said that the “India Specific Changes” (ISC), the word is India specific changes, quote unquote, were added to the Rafale. That is why the cost went up. However, these India specific changes were already there in the RFP! Every single one of them were already there in the RFP in 2007. The one and only extra addition which came in was the Meteor, the Missile. Therefore, one add-on missile, is it enough for the price to escalate this much?
Yann: Yeah, but because you are talking about the chronology, so let us summarize. What I did is that I focused on the corruption suspicions around this deal. What is really striking is that, as you know, if we summarize, there are two phases. There is the UPA era with the Congress leading and then the BJP with MODI leading. Moreover, what is really interesting in this deal is that during these two phases, there have been corruption allegations, both under the UPA and under the BJP. There is one man that concentrates all the suspicion, whose name is Sushen GUPTA. He is a very famous arms intermediary in India. He is the son of another intermediary called Dev Mohan GUPTA. They have a consultancy (company) called Indian Avitronics, which is quite famous in the Defence sector. Dassault had hired this GUPTA family as early as 2001. It was at the very beginning when the Indian Air Force requested for a big fighter jets order. Moreover, what is really interesting is that from the beginning there have been different types of money flows between Dassault and the GUPTA family. The first one was basic contracts. Dassault hired Indian Avitronics Consultancy as a consultant for India and they were paying them, I would say, in a normal way. Further, as early as 2001, there has been a different financial (measure), a hidden, a secret financial flow channel that had been opened. What was doing Dassault is that they ordered inflated IT services to an Indian company called IDS and this company was giving back part of this money to the GUPTAs. Later, they complexified this even more and they used a shell corporation in Singapore that was taking the money from Dassault for all these IT services stuff. In fact, most of this money has never been used to perform IT services and was again channeled to an offshore company of the GUPTAs, registered in Mauritius and it is named Interstellar. Therefore, during the years of the MMRCA tender, the tender for the 126 aircrafts, the one that has been cancelled in 2015. Between the Request for Proposal in 2007 and the moment Dassault had won the tender in 2012, there have been millions of euros, more than 10 million euros that have been secretly channeled from Dassault to this offshore company of this intermediary in Mauritius. It is very complicated to know where this money ended up, you know, because there have been back channels, through multiple kickbacks in multiple offshore companies and jurisdictions. Thus, it is really difficult to prove basically that this money has actually been used to bribe Indian officials. However, there are strong suspicions about it. That is the first phase, you know, during the UPA era.
There is a very significant document that we obtained. A note that has been found in GUPTA's digital archives. In this note, there is a briefing for Dassault and a plane ticket between Paris and New Delhi. Therefore, this suggests that Sushen GUPTA had a very important meeting in Paris with the top executives of Dassault. This document is a document that he wrote just before the meeting, very probably in his hotel in Paris, because the metadata is from quite early in the morning. Thus, he was preparing what he was about to say to Dassault. The content of this note is really crazy. Because what he says is, “OK, we gave money, but you do not want (to pay us for the fact that) we gave money to the Indian officials. You do not want to compensate the payments. You do not want to reimburse the bribes that we paid for you!”. In addition, GUPTA says to Dassault, “This is a real problem because now we made promises and people in offices are waiting for the money. And if this money is not paid, they are going to put us in prison and the deal is going to be canceled.” So, that is it.
Ravi: This is the time, if you link, when the Indian Air Force was pushing the VAJPAYEE government that they need 126 mirage while Dassault was about to close down the production facility of mirage altogether. Therefore, the Air Force Authority and the Defence ministry went to try to take the permission from the Cabinet Committee on security. They projected in a way that Dassault is ready to move the production facility completely, Mirage production facility completely to India! However, what was actually happening was that they (Dassault) were just phasing out Mirage. Thus, that was the time when the incidents that Yann explained were happening or had happened.
Anubandh: Thank you.
Yann: Sorry, just to finish with that. That is what had happened. The suspicions about the UPA era. Then in 2015, as you already explained, the tender was abruptly and surprisingly cancelled and replaced by the purchase of 36 flyaway Rafales, all made in France. That was the beginning of the MODI era on the case.
Moreover, what is also very
surprising is that despite there being this change in power, with BJP seizing
power through the elections, the same intermediary, Sushen GUPTA, remained very
active. He managed to be as efficient as he was under the UPA era, which is
quite surprising. In addition, during this period, there have been other very striking
events that happened. The most striking one is, first, that Sushen GUPTA
managed to obtain, he was the agent of Dassault. He managed to obtain, we do
not know how, very sensitive and confidential documents from the Ministry of Defence
of India regarding the activities of the Indian Negotiating Team (INT) that was
negotiating the deal with the French government. We have got the proofs that he obtained
minutes, confidential minutes of the meetings of the INT, of the Indian
Negotiating Team. He also obtained the revised offer of Eurofighter, which was
one of the competitors of the Rafale and who was trying to go back on track by
proposing a 20 % discount. They obtained this revised offer from Eurofighter,
which of course was very helpful for our negotiations. They even obtained
confidential documents from the INT about the way the Indian Negotiating Team
was calculating the prices. Of course, you talked about it just before, one of
the controversies on this deal is about the price.
When you are in such a sensitive
negotiation, let us remind that we are taking about 8 billion euros deal.
When you are in a negotiation about the price and that you know how the other party is trying to calculate the prices, certainly, you have a huge advantage in this negotiation. This intermediary Mr. GUPTA should not have obtained these confidential documents, especially right in the middle of such a sensitive and costly negotiation.
Anubandh: Great, thank you.
Paranjoy: What Yann PHILIPPIN told us shows clearly that Sushen GUPTA had, he knew exactly what was going on in the Ministry of Defence. Therefore, Dassault was willing to pay him for his services. Now, how did that payment come? That is an interesting issue. All we know that he sold miniature versions of the plane replica for a huge sum of money. I think we need to go deeper into this and I think we should. Moreover, as always, all these people say no, no we have nothing to do with it. Everybody flatly denies it. But as we already know, as Ravi already pointed out, there is much more to the story than meets the eye.
Anubandh: Indeed.
Paranjoy: And this 50 replica of the aircraft, is the model, you know, 10 times smaller the aircraft or how it would look if it were 10 times smaller. I mean the kind of money that was paid and it is all there in the public domain. It is truly amazing. I mean, that itself is for us at least a smoking gun.
Yann: That is not all because we have got the same, not the same, but similar organization as you remember in the UPA era. There have been the official payments to the consultancy of the GUPTAs and there has been the secret money channel through offshore companies. Then under the BJP era, there was something a bit similar but a bit different too. It is that there still had been the official payments from Dassault to the GUPTA's consultancy. What happened is that the GUPTA family won offset deals. Thus, there had been this replica, Rafale replica contract. They fabricated this replica, but there is more. There is also another company, which is controlled by the GUPTA, which is called Defsys Solutions. They obtained offset contracts. They are manufacturing parts for the Rafale in India. That is another way to give more money to this intermediary that was already paid.
Anubandh: Thank you, Yann. I am sorry we will have to move ahead because we are running short of time. Just a last comment on this chronology. I believe, my intention was also to bring to the notice of the audience that there was a kind of a blame game by the NDA government accusing the UPA government that the delay in this deal was mainly because of them. Moreover, it was the former late finance minister Arun JAITLEY who had said that it was the Defence minister of that time, A.K. ANTONY who delayed the deal. What we can see is that actually the negotiations took only 26 months. The real negotiations. Even during that time, there were accusations of corruption by the BJP minister. I think his name is SWAMINATHAN. No, I forgot his name. (Perhaps) you will remind me.
Ravi: Subramaniam SWAMY.
Anubandh: That is why... Subramaniam SWAMY, exactly! Thank you. And that is why Mr. Anthony had to initiate a fresh request for investigation, which took some time. Moving ahead, I have now the part, because I think it is very important…
Ravi: Related to what you just said. Mr. Anthony ordered the investigation towards the end of 2011 and the starting of 2012. The timeframe given was that the investigation should be (have been) completed within three months. According to the MODI government, the committee submitted its report after MODI, even after many months, even many months after MODI government came into power in 2015. That is why the deal was called off. Just imagine, just imagine what they were saying.
Anubandh: True. Thank you. That is an interesting point. One small remark and comment. As the book is very complex. Although you have tried your best and it is very great to read the book since it is in a simplified and accessible way. Yet, as there are many details, you are tempted to comment and I can understand that. However, for the benefit of the audience, we will have to stick a bit to the format. The chronology is also where the six global aircraft manufacturers were invited, of which the first two are Americans, Lockheed Martin and Boeing, the American F-16 and F-18.
Then you have the Eurofighter Typhoon, which was manufactured by the consortium of British, German, Spanish and Italian firms. Then French Rafale by Dassault. You also had Russian Mikoyan, MiG35 and the last one by Saab was Swedish JAS-39.
Of these six aircrafts, two were shortlisted as the lowest bidders, Eurofighter Typhoon and French Rafale. Now, I have a few questions on this to you because in the book you claim that the Indian Air Force was reluctant to go for the American aircrafts as there could be potential sanctions against India (by USA) and then that would hinder the procurement of spare parts and other material. My question is, are we sure that the Rafale jet does not use any United States, American spare part or component? Because in 2003, when France went against the United States decision of attacking Iraq, United States deprived France, the French nuclear industry with some critical components. That is why I am interested to know if the Rafale also had some American components in it.
Ravi: Okay, before answering to (your question) it, you said that this Eurofighter and Dassault Rafale were shortlisted as the lowest bidders. That is not correct. Out of the six, there was a technical evaluation. In that technical evaluation, only two were selected. Thus, the four were eliminated. Lockheed Martin, Boeing, Gripen of Saab and MIG35. All these were eliminated in the technical evaluation.
Paranjoy: And the Americans were very unhappy. They were very upset.
Ravi: Then two were left, Eurofighter and Dassault
Aviation. In that, Dassault was selected as the lowest bidder which was
questioned by Subramanyam SWAMI.
Now to the second part. Dassault is completely indigenous for the Rafale. It is all French, completely French. Thus, the major components that are coming for the engines are from Safran, again a French company, and many of the equipments are from Thales. Another French major.
Yann: Sorry. if I can add something about this. This is even more than this because Rafale is officially ITAR free. ITAR is this US regulations about arms exports. Saying that the US can ban any exports of a weapon which includes even one critical US component. And Rafale is officially ITAR free. It means that it has absolutely no critical components. We cannot exclude that there is, you know, small parts, which are US made. However, it means that you are right, Anubandh. The Rafale is not affected by US sanctions because it has no critical US component in it. Therefore, even if the US sanctioned India, France can still export Rafale to it.
Ravi: Yeah, That is what I said. Safran and Thales play a major role in all the critical components.
Paranjoy: I have a question for Yann and I am sort of fast forwarding it a little bit Anubandh. A lot of us are very interested to know what is the present status of the investigations that are taking place in France. We know that there are two administrations involved; that of François HOLLANDE and then MACRON. In addition, we also know that the French government, the Defence ministry, the Ministry of Foreign Affairs, and of course Dassault itself. They are not cooperating with the investigations and the prosecutors. However, we want to believe that the prosecutors in France have a certain degree of autonomy and independence. Thus, I am very keen to know from you.
Yann: That is a very interesting question.
Anubandh: Before Yann answers you, I need to tell you that we have a dedicated session (France Specific Details) planned for this specific question. However, yes, briefly Yann, if you can comment.
Yann: First, in France you have two kinds of magistrates that can lead a probe. The first ones are the prosecutors, who are not formally independent. The second ones, we call them investigative judges. They are formally independent. These are the kind of investigative judges that lead the investigations. What is sure is that these kind of judges, because of their status, are much more sensitive to political pressure. As per my knowledge, they really try to investigate this independently. The main problem that they have is that today the French probe seems to be, let us say, blocked or semi-blocked. Why? Because of the blocking from both the French and the Indian governments.
First, the blocking from the French government is that the judges, they requested a lot of documents from the Ministry of Defence and the Ministry of Foreign Affairs. Both these ministries said, no, we will not give you anything because this is classified. Then there has been a police raid at Dassault premises. The judges and the anti-corruption police raided the offices of Dassault. They took a lot of documents, lot of electronic data, emails, hard drives, everything. Then they had to go to a special judge to determine what was classified and what was not. There again, most of the documents that they seized have been declared as classified. Thus, it is forbidden for them to use them. Therefore, they are blocked by this Defence secrecy, by this classified, which comes from everywhere and especially from the government.
And now about India, which is interesting for our audience, is that as we revealed in Mediapart, in fact, many of this information about this intermediary, Sushen GUPTA, which is at the core of the corruption allegations, you know, this information comes from an Indian probe, an Indian case file. This case is led by the CBI and the Enforcement Directorate (ED) about another arms deal called the Chopper Gate, which involved another company called...
Ravi: That is exactly what I said Yann! We should take this further…
Yann: (That’s) Augusta Westland (deal). Thus, what happened is that the CBI and the ED, the Enforcement Directorate, they investigated the Augusta Westland Chopper deal. They found some of the offshore companies of the GUPTAs and then they discovered that the same companies have been used to channel alleged kickbacks for Dassault! There are a lot of very important documents in this case file. Moreover, what is interesting in that the Indian authorities never opened a separate probe about Dassault. They discovered all these suspicious elements about Dassault, but they sat on it, they did nothing. Thus, what did the French judges do? Is that they officially requested the Indian government to provide this case file. And there again, the Indian government refused to give this case file to the French judges.
So, basically they are blocked on two sides. In France they are blocked because all the authorities, the French authorities tell the judges, this is classified, that is classified and thus you cannot use it. While when they ask the Indian government to provide what they have, they refuse! So despite the, I would say the goodwill of these investigating judges, given all these obstacles that are in front of them from both the Indian and the French government, it is going to be very difficult for them to conclude this probe.
Ravi: Thank you, Yann. The government of India has placed an order of another 26 Rafale for the Indian Navy, the marine version of Rafale for the Indian Navy. This way, Dassault and the French government are assured that the Indian agencies will not share the documents with the French authorities. So, everything is sealed.
Anubandh: True. We will come back to this topic in detail as we move on in the discussion. I would like to take you back to what we were discussing. Therefore, F-16, as we said, is the American manufactured jet way. It was also not India's choice because it is used by the Pakistan's army. That was one of the reasons as well. I have a question regarding EADS. Do you confirm that EADS is the same as Eurofighter? Because in the book we see that has been used interchangeably with European Aeronautics Defence Space Company. Do you confirm that?
Yann: No, Eurofighter is different. Eurofighter is a consortium whose EADS is basically the biggest player. There are other companies that are not part of EADS, which are manufacturing the Eurofighter. However, the main shareholder and the main provider of parts of technology is EADS.
Ravi: So, it is started by EADS. That is why in the initial stages, you will see a lot of EADS. Then later when the consortium became bigger and complete, then it became Eurofighter.
Anubandh: I think this is a very critical and important
part to understand for the audience that all these companies that we are
talking about, the French companies, especially Dassault, Thales, Safran, MBDA,
etc. they have extensive French government's shares. Therefore, these are not
completely independent entities as such. For example, Dassault has around 10 %
of Airbus and French government's share as well.
Thales has 25 % of French government’s share and Dassault is also a stakeholder in Thales! Safran has French government’s share. MBDA has Airbus in it. Thus, this is very complex. That is why one cannot say with confidence that these companies are (were) acting on their (own) behalf independently.
Ravi: Anubandh, Dassault is very infamous for bribery, especially, you know, if you look at their former chairman, who had been sentenced for corruption in a third country, and was exempted later. While in France itself, he had been ordered a jail term for bribery to the voters. Therefore, corruption is not new to Dassault.
Anubandh: True, you have mentioned that in your book. Thank you. I would like to take you forward now with this slide where there were some very major important joint ventures that were happening and breaking again. So, it was a bit difficult to keep track of that. However, thanks to your book, I could highlight a few of them. And of course, we can then link it to what Paranjoy was saying (initially) about the Israeli joint ventures with the Indian companies.
The major one is of course Dassault Reliance Aerospace Limited (DRAL). As mentioned in the book, it was formed in 2017 but apparently, it was terminated since Reliance could not bring enough funds to this joint venture. In 2023 it was dissolved.
Ravi: I am sorry to correct, it was not terminated completely. Dassault tried to take over the shares held by Reliance. The transaction is not complete yet.
Anubandh: Okay. Fair enough. Then the next one is between Adani Defence Systems Engineering and Saab. It was in September 2017 and then it was terminated in January 2023. Next one is Thales and Reliance. It was formed in June 2017. I do not know if it is still existing, but I could not find (relevant) information…
Ravi: It does exist.
Anubandh: It does, thank you.
And the surprise for me was that even the Tatas are into the Defence business and they had in the initial stages of this (Rafale) deal a Memorandum of Understanding (MoU) with Dassault. Do you have any comments? I know Paranjoy had already said about the Israeli ones. Could you shed some light on these joint ventures, please?
Paranjoy: See Anubandh, all the major business groups, they enter this business because it can be potentially very lucrative. That should not surprise you. Nevertheless, the newcomers, including the Adani group have entered in after and also ADAG entered it without any prior experience (in the Defence field). That is important to know. There are other groups but both the ADAG group headed by Anil AMBANI and the Adani group are relatively new entrants. I think that is significant that these two groups have been able to move quite quickly ahead.
Anubandh: Indeed. It is.
Ravi: And related to this DRAL, I am sure, Yann has some interesting things to reveal. A part of it which I also did, especially how the money was transferred through shares into dead airports and the loss making companies, which I reported way back in 2019. Yann took it over from there and he has more details on that, he will explain it to you.
Anubandh: Perfect.
Yann: They are very troubling because basically I
could obtain the secret agreements between Dassault and Reliance for the
creation of the DRAL and for this joint venture which has a factory in Nagpur
in India where they manufacture parts for the Rafale and also for the Falcon,
for the private jets.
The most surprising thing is that you remember this announcement of Mr. MODI in Paris (in April 2015) when he broke the tender, the big tender to replace it by a small purchase of 36 aircraft. I do not know if you remember, but this announcement was a super-secret. Even a few days before, the official spokesperson of the Indian government said, no, no, no, the tender is going on as planned. Thus, it was a surprise and it was a shock even inside the Indian government. Therefore, this was a super-secret announcement. What we revealed is that two weeks before Dassault and Reliance already signed the agreement. Thus, this suggests that they could know in advance a decision that was super-secret. Why? Because the consequence of this decision is that HAL, which is a big public aeronautic company, was totally kicked out of the deal.
It seems that Dassault and
Reliance, knew (at least) two weeks before, that HAL would be kicked out and
that there was an opportunity to sign this agreement. Do not forget that Mr. AMBANI
is very close to Mr. MODI. That has been the suspicion from the start. That is
the first very, very surprising thing.
The second thing is that when you read the content of these agreements, you see that basically Dassault gives everything and Reliance gives nothing! Especially about the money. The agreements say that Reliance will give a maximum 10 millions and Dassault will give, I do not remember exactly the figure, I think it is up to 160 million. Therefore, it means that basically Reliance gives maximum 10 percent of the money while Dassault gives everything else. The only thing that Reliance brings in this agreement is by helping set up this production facility in Nagpur. Which is okay, that is important, you know, (but) it is not that difficult to create (build) a factory.
Ravi: What Reliance brought in were the political connections and the relations to arrange the licenses. That is it. The money was routed in a very strange way. The Reliance group has small airfields in different cities of Maharashtra, which were not operational. Maybe, once in a while, some small private jet will go and land and these companies were loss making. Out of the blue, Dassault picked up 35.8 % nearly 36 % of that company for some 40 million euros, out of the blue! The company in which they invested was making losses and the capital almost eroded.
Paranjoy: I want to add to what Ravi is saying and what Yann said. Firstly, the sequence of events, the dates, these joint venture agreements, these details suggest that there was some inside information and that is why these deals were signed. Secondly, you must remember that the group which is headed by Mr. Anil AMBANI, ADAG, according to its own lawyers is bankrupt. So, why are you dealing with a company which is in such poor financial condition and which has no experience in this area or manufacturing Defence aircrafts? Thus, there are too many unanswered questions and these remain unanswered until this day.
Anubandh: Thank you. Moving ahead, I think we should also talk a bit about the Request For Proposal (RFP), which is a very important document. And rather in the book, you say, you claim that this was one of the best RFPs written (in the world). I will invite you to comment on this. However, think I should first read some key points of this document. What this document did, that it asked to identify HAL (Hindustan Aeronautics Limited) as the lead production agency. Thus, the bidder had this constraint to choose HAL as the lead production agency and it had to also choose Indian Defence industry partner for the manufacturing of other systems and subsystems. The vendor also had to choose HAL as its Indian offset partner, IOP. There were also clauses of Transfer of Technology (ToT). The vendor had to assess in order to choose its partner the capability of the Indian production agencies. This is an indirect reference to HAL, which means it had no choice (but to accept HAL). Moreover, what was Dassault’s in general approach to this RFP? There is no (evidence on) record as such that Dassault was not happy with this RFP document or with the terms of Transfer of Technology (ToT) or its inability to work with HAL. Because if that had been the case, its bid would have been rejected.
Paranjoy: I want to add one point to what you have already said. So as to put it in a bigger context, Anubandh. This is the same government which talks about Make in India. This is the same government which talks about India becoming self-sufficient in the production of Defence equipments, including aircraft and here is a government which is doing exactly the opposite!
Anubandh: Yeah.
Paranjoy: It is weakening your public sector company, your government-owned company. Thus, the hypocrisy is also to be emphasized, but Ravi, I am sure you can add to what I said.
Ravi: Anubandh, there are videos, there are video
interviews where Eric TRAPPIER, the CEO of Dassault, openly praising HAL and he
openly says that he had a very long relationship with HAL and he was very happy
to work with HAL before and after, before signing the contract for the deal of
36 Rafale.
And even after that, even after that interview, he said that he never said anything against HAL because he has a very healthy working relationship and a long working relationship between Dassault and HAL. He said that the relationship between HAL and Dassault goes back to the 1960s. Okay. The other thing about that is that the Indian government actually structured the deal in such a way where Dassault actually forced the government of India or arm-twisted the government of India to agree to their terms! Because MODI took a unilateral decision, which is only to (serve) his cronies, and no one else. (The decision was not known) even to the Ministry of Defence! Once the Prime Minister announces a multi-billion dollar Defence deal, he cannot back out and especially for someone who is like, I mean, someone like MODI, who is a megalomaniac and you know, with autocratic tendencies. Once he announces that in a public platform, along with the President, standing along with the President of a major European country. And if he backtracks and cancels the deal later, then what happens? I mean, the (other) countries will start to doubt his persona and India's commitment, because he did not say this as an individual. He said this as an Indian Prime Minister. That was a blunder what Narendra MODI made! It created a lot of ruckus. That is why India ended up paying at least 3.5 billion dollars higher than the required price.
Anubandh: True. I think what is also important to notice here is that the first original RFP was issued on 28 August 2007. Then there were also revised RFPs. You will correct me if it was in 2015 or 2016, but somewhere in that period. There is an argument made by the MODI government that the price of the Rafale jets was hire by 900 crore because the new aircraft has “specific changes required to fulfill the needs and requirements of the country”, which in a sense for me are the India Specific Enhancements. And that it has also a new generation missile. This was the argument. So my question is why did the initial, if we believe the government, why did the initial RFP missed these enhancement details? Do we have access to these two RFPs (so as to) compare them?
Ravi: The 2007 RFP was never changed or amended. That is the first thing. It never changed. 2007 RFP was never changed. If you look at the Prime Minister's address or press statement after his announcement and meeting with (François) HOLLANDE in France, it clearly states that Dassault will deliver these fighter jets or Rafale as desired by the Indian Air Force (IAF). All the specifications will remain the same. Thus, the India Specific Enhancement, what they are saying, that was a part of 2007 RFP! The only addition, the only addition which happened was a missile called Meteor, that is a beyond visual range supersonic missile. Although Meteor was not developed in 2007, I mean the missile was there but it was not up to the present configuration. Though the beyond visual range missile was part of the RFP, it was not Meteor. The only thing changed was the addition of the Meteor. That was not an addition exactly either, that was a slight amendment of one weaponry. That is the only thing changed in the RFP.
Anubandh: I just want to say as a closing line that as a reader, I was very fascinated to read this book. It was almost like (reading) a detective book. Nevertheless, the things (here) are real and sordid. As Paranjoy said, the story must not end here. I think it is our collective duty. What is at stake here is the exchequer’s money, taxpayer’s money for Indians. I believe, it is also important for the French population since all this is done in their name as well. It is for everybody's interest that the civil societies from both these countries take interest into this issue. I thank you a lot for this fascinating discussion. I am sure that we will have a lot more to share and discover together, taking along the audience, who are very anxious, I guess, as well to see how this story unfolds. So, thank you again. And I look forward to talk to you very soon. Thank you. Thank very much.
Ravi NAIR was born in Kerala in
November 1973. He completed a post-graduate degree in economics from the University
of Calicut in 1995. Thereafter, he worked in the corporate sector till 2014
before becoming a consultant. He is an independent journalist and has written
for various publications and news portals.
Paranjoy Guha THAKURTA - Co-Author
Yann PHILIPPIN is an
investigative journalist and reporter for the French Mediapart. In his
journalistic career, he has investigated the crash of the Rio Paris flight of
Air France, the SNCF accident in Brétigny and politico-financial cases such as
the Dassault and Rafale deal controversies. Specialized in financial cases, tax
fraud and corruption, he works in particular on data “leaks” published by Mediapart
with its partners from the European Investigative Collaborations (EIC) network,
on which Yann is also a board member.
Anubandh KATÉ is a Paris based engineer and co-founder of the association, “Les Forums France Inde”.
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