Former French President François Hollande has blown off the lid on Modi’s Rafale Scam. A flurry of explanations being offered by the Modi government and Dassault make absolutely no sense.
Here’s why these attempts are futile in front of the available evidence.
In January 2012, Rafale was declared the lowest bidder in the then on-going MMRCA selection process. Within weeks of the announcement, Mukesh Ambani led RIL entered the defence business by forming a company, applying for license to manufacture aircrafts parts and signed an MoU with Dassault Aviation. When Dassault insisted on partnering with RIL, the then UPA govt, already mired in enough corruption controversies and fearing a backlash, refused to bend and insisted Dassault must ink the pact with HAL. Eventually, the MoU between Dassault and RIL lapsed in 2014.
UPA govt did not ask the vendor to choose a particular newly formed private company whenever the deal is closed, and no former French Presidents alleged that the then govt asked them to select a particular private company and they had no other choice. And the then PM didn’t announce from France that he “asked president to supply 36 aircrafts in fly away condition” without taking any mandatory and relevant approvals. Then the price negotiations were based on the RFP, and it was less than half of the price that the current govt accepted to pay. The previously negotiated transaction, which the Modi govt cancelled, had Transfer of Technology included. In the new contract, it is not there. Hence, MoD, as a very important ministry in the Union of India, should not resort to such cheap and ridiculous tactics which harms their reputation.
But, in the case of Reliance Defence and the Modi government, the story is different. After Anil Ambani’s company was formed, the number of aircrafts came down drastically to 36 from the then 95% Negotiations completed RFP, which mentioned 126 aircrafts.
In their clarification, Dassault Aviation says the deal to supply 36 Rafale fighters in fly away condition to India is a Government to Government (G2G) deal, but their selection of an Anil Dhirubhai Ambani Group (ADAG) company as their offset partner in India has nothing to do with the government and that it was done in accordance with the guidelines mentioned in the Defence Procurement Policy 2016 (DPP 2016). But this argument doesn’t stand well in front of the earlier information put out by Dassault.
Dassault Aviation put out a Press Release and the same was published on their website. On 23 April 2018, after three years of Modi’s announcement to purchase 36 Rafale in fly away condition from France, Dassault Aviation openly admits that they formed the JV with Reliance Defence in April 2015 itself. That, after considering former French President François Hollande’s revelation, is a crucial evidence to prove that Dassault Aviation under pressure.
Anil Ambani entered the Defence business by incorporating a new company on 28 March 2015. On the thirteenth day, PM Modi announced from France “I have asked President (François Hollande) to supply 36 ready-to-fly Rafale jets to India.” Exactly two weeks from this announcement, Anil Ambani incorporated a new company – Reliance Aerostructure Limited – to enter the Defence sector.
When Dassault Aviation says they formed a Joint Venture (JV) – Dassault Reliance Aerostructure Limited – with Reliance Aerostructure Limited, it is evident that this JV might have come into existence anytime between 25 April to 30 April 2015. Here the question is, why did Dassault choose a company which existed only on paper, and was less than a week old considering that the company’s promoter group was under a humongous debt restructuring programme where it was selling their existing assets and closing down many businesses? Do we still have to believe that Dassault selected Reliance as their JV partner on their own?
When Dassault Aviation says their JV with Reliance Aerostructure is in accordance with the DPP 2016, that is another strange case. As per the DPP 2016, Dassault is absolutely free to choose its Indian partner. The “Defence Offset Guidelines” of DPP 2016, clause 4.1 in Indian Offset Partners (IOP) reads: “Indian enterprises and institutions and establishments engaged in the manufacture of eligible products and/or provision of eligible services, including DRDO, are referred to as the Indian Offset partner (IOP).” It clearly proves, that the company which Dassault chose as its JV partner did not fit this criteria because a newly incorporated company which existed only on papers wouldn’t be “engaged in the manufacture of eligible products and/or provision of eligible services”.
Clause 4.2 reads: “The IOP shall, besides any other regulations in force, also comply with the guidelines/licensing requirements stipulated by the DIPP as applicable.” Logically, Reliance Aerostructure Limited would have taken an industrial licence to produce aircraft parts under the Industries (Development and Regulation Act) 1951 before Dassault chose them as their JV partner. Here, it gets more interesting. 24 April 2015 was a Friday. So, in the last four days of the month, Reliance obtained the license and Dassault agreed for the JV!
Hence, Dassault Aviation saying they chose Reliance as their JV partner is hard to believe
The statement from French Government is a straight-forward one. It clearly states – Dassault as a French company is free to choose its Indian partner as per the DPP and they never influenced the decision of Dassault. Here, the point is, France did not deny what Hollande told Mediaparte! Rather, with such an easygoing statement, they endorsed what Hollande said.
The weak and half hearted attempts, of cabinet minsters and their supported media houses to shield Narendra Modi by waving clarifications issued by French govt, Dassault Aviation and BJP leaders, look like a comedy circus. It becomes more pathetic when the Defence Ministry issues a press release to justify these claims and cleverly adds a couple of lines to blame the previous govt in a typical BJP IT Cell whataboutery.