April 12, 2021
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To: either/view subscribers
Good afternoon. Defence purchases in India have always been mired in controversy due to allegations of large-scale corruption. Some of the most controversial scams include the Jeep scandal in 1948, the Bofors scandal in 1980s and 1990s, and the 2013 AgustaWestland VVIP helicopter scandal.
📰 FEATURE STORY
Rafale Deal Controversy: Investigation and Denial
The past week has seen some explosive revelations about the Indian deal to buy Rafale jets from France by a French independent investigative publication named Mediapart. Let us dive right into the details.
Context
In 2012, the United Progressive Alliance government led by Congress party had announced that Dassault Rafale emerged the winner in the competition to supply 126 fighter aircraft to Indian Air Force. 18 of these aircraft were to be fully built, while the remaining 108 aircraft were to be built under license by Hindustan Aeronautics Limited (HAL). However, the contract could not be signed due to delay in negotiations on certain aspects of the deal.
After the National Democratic Alliance led by Bharatiya Janata Party came to power, Prime Minister Narendra Modi visited France in April 2015 and announced that 36 fully built Rafale aircraft would be purchased due to operational contingency. The original deal for 126 fighter aircraft was scrapped.
The Congress party had gone to the Supreme Court in 2018 alleging corruption and irregularities in decision-making, pricing and selection of offset partner in India. However, the Court ruled in November 2019 that the Rafale deal did not have any irregularities or involve corruption.
Mediapart’s investigation into the Rafale deal includes new allegations of corruption.
Mediapart’s allegations:
At the heart of the French journal’s allegations is Sushen Gupta, an alleged middleman in the Rafale deal, and the companies associated with him including Defsys Solutions. Sushen Gupta has been previously arrested and released on bail for his alleged involvement in AgustaWestland VVIP Chopper scam, which occurred during the UPA government’s reign in India.
In its first part of the investigative report, Mediapart noted that during an audit of Dassault group by the French Anti-Corruption Agency Agence Française Anticorruption (AFA), an inflated invoice for the purchase of 50 scale models of Rafale aircraft from Indian company Defsys Solutions was found. The journal claimed that 1 million euros was paid by Dassault to Defsys for the mockup aircraft and was listed as “gifts to clients” in the former’s entries. The report alleged that Dassault group were unable to provide any evidence of receiving the scale models, and France’s authorities had suspected that this was probably a bogus purchase to hide financial transactions.
Mediapart stated in its third part of the investigative report that Sushen Gupta was paid millions in commission over a 15-year period from 2003 to 2018 by Dassault and Thales (another aerospace company based in France). The journal also alleged that Sushen Gupta had illegally obtained confidential documents from the defence ministry of India and had used it to help the French companies bargain better rates with the Indian government.
Response from the accused:
Defsys Solutions had released a statement stating that the allegations by Mediapart were “wholly unsubstantiated, baseless and misleading”. The company released tax invoices which showed that the scale models had been delivered from Defsys office in Bengaluru to Dassault’s office in Delhi. It also said that all the documents related to the delivery of the scale models had been submitted to relevant authorities in India.
The legal counsel for Sushen Gupta released a statement saying that the Mediapart reports were “fabricated, factually incorrect and baseless”. The statement also noted that it was “preposterous to suggest that a private individual could have influenced a government-to-government transaction for the acquisition of 36 Rafale jets”.
Dassault has denied any wrongdoing on its part in the Rafale deal with India. In a statement released to the press, the company claimed that no violations had been reported by French authorities including the French Anti-Corruption Agency.
“The contract with India for the acquisition of 36 Rafales has been established on a government-to-government basis. This contract, as well as the offsets corresponding contract, meet the criteria established by these regulations and are being executed in full transparency between the various government and industrial partners. The aircraft were delivered in respect of the schedule, despite the COVID-19 health crisis, and fully meet the security needs of the Indian authorities,” the statement read.
🕵️ BEYOND ECHO CHAMBERS
For the Right:
- Silence on Kumbh Mela shows Indians think only Muslims spread COVID.
For the Left:
- In the new bipolar world led by US and China, Russia is no longer a strategic ally for India.
🗳️ ELECTION WATCH
Assam
(126 constituencies – 3-phase polls)
- The Congress party has shifted over 20 candidates in the recently concluded assembly polls to Rajasthan, apparently trying to prevent horse-trading before election results are announced. The party’s alliance partner All India United Democratic Front (AIUDF) has also followed suit by shifting 15 of its candidates to Rajasthan.
Kerala
(140 constituencies – 1-phase poll)
- The state Opposition Leader Ramesh Chennithala has alleged that those who cast their votes at the special postal voting centres had also been delivered postal ballots at their addresses to exercise their franchise. This, he claimed, would lead to duplication of votes.
Tamil Nadu
(234 constituencies – 1-phase poll)
- PSW Madhava Rao, a Congress candidate who contested from Srivilliputhur constituency in the recently concluded assembly election, has died of COVID-19. There will not be any re-polling since he died after the election. However, in case he wins, then a byelection will be held.
West Bengal
(294 constituencies – 8-phase polls)
- In the fourth phase of polling held on Saturday, five persons were killed in two separate firing incidents in north Bengal’s Sitalkuchi constituency. Four persons were killed by CISF personnel in one of the polling booths after an altercation with agitating locals, while one person was killed by miscreants when he was returning from another polling booth.
🏴 STATE OF THE STATES
Encounter (Jammu & Kashmir) – A 14-year-old boy was one of the five militants killed in two separate encounters in South Kashmir. The boy had gone missing just two days ago and had joined the militants. Two of the slain militants had killed a soldier of the Territorial Army on Friday.
Cancelled (Andhra Pradesh) – Chief Minister YS Jagan Mohan Reddy has cancelled his campaign for the upcoming Tirupathi Lok Sabha bypoll scheduled to be held on April 14. He cited the recent spike in COVID-19 cases for his decision, stating that his campaign would have attracted large crowds and the risk of the virus spreading among the masses was immense.
Achievement unlocked (Maharashtra) – The state has become the first in India to administer over 1 crore COVID-19 vaccine doses. As the state has a target population of about 3 crore (people over 45 years of age and frontline/healthcare workers), another 5 crore vaccine doses need to be administered (two doses per person).
🔢 KEY NUMBER
$2.1 billion – Valuation of Indian social media app ShareChat after it recently raised $502 million Series E funding from Tiger Global, Light Speed Ventures, Twitter, Snap and others.