French judge to investigate Rafale deal

The Parquet National Financier (PNF) or national financial prosecutor refused to investigate the deal in 2019, when the agency’s then head Eliane Houlette dismissed a complaint filed by French anti-corruption NGO Sherpa.
Following a fresh complaint from Sherpa on the basis of a series of reports on the Rafale deal by news website Mediapart, PNF appointed a judge to lead a judicial investigation into suspected “corruption” and “favouritism”, Mediapart reported.
Following a fresh complaint from Sherpa on the basis of a series of reports on the Rafale deal by news website Mediapart, PNF appointed a judge to lead a judicial investigation into suspected “corruption” and “favouritism”, Mediapart reported.
Updated on Jul 04, 2021 12:37 AM IST
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ByHT Correspondents, New Delhi

A French judge has been tasked with investigating suspicions of “corruption” in the 59,000 crore (7.8 billion euro) deal with India for 36 Rafale jets, the French national financial prosecutor’s office has said.

The Parquet National Financier (PNF) or national financial prosecutor refused to investigate the deal in 2019, when the agency’s then head Eliane Houlette dismissed a complaint filed by French anti-corruption NGO Sherpa.

Following a fresh complaint from Sherpa on the basis of a series of reports on the Rafale deal by news website Mediapart, PNF appointed a judge to lead a judicial investigation into suspected “corruption” and “favouritism”, Mediapart reported. The investigation was formally launched on June 14.

PNF was also cited by AFP news agency as confirming the appointment of a judge to investigate the deal that was inked in September 2016, following the scrapping of the Indian government’s earlier plans to acquire 126 jets.

There was no immediate response to the development from Indian officials, while the Opposition Congress party on Saturday demanded a probe by a joint parliamentary panel.

In its latest complaint, Sherpa cited “corruption”, “influence peddling”, “money laundering”, “favouritism” and undue tax waiver related to the Rafale deal. Mediapart reported PNF, the financial crimes branch of the French public prosecution services, had confirmed the new investigation will focus on all four allegations.

In April this year, Mediapart carried a series of reports on alleged irregularities in the Rafale deal. In one of those reports, Mediapart said former PNF head Éliane Houlette shelved an investigation into alleged evidence of corruption in the Rafale deal despite the objection of colleagues. It added that Houlette justified her decision by saying it was meant to preserve “the interests of France”.

“Now, her successor as head of the PNF, Jean-François Bohnert, has decided to support the opening of a probe, after the complaint was updated with details from Mediapart’s recent series of investigations,” the website reported.

The new criminal investigation, Mediapart reported, will “examine questions surrounding the actions” of former French president François Hollande, who was in office when the Rafale deal was inked, current French President Emmanuel Macron, who at the time was Hollande’s finance minister, and foreign minister Jean-Yves Le Drian, who held the defence portfolio in 2016.

Mediapart claimed in April that “millions of euros of hidden commissions” were given to a go-between who helped French aircraft manufacturer Dassault, the manufacturer of the Rafale jet, conclude the deal.

Dassault has said the group’s audits had not flagged any wrongdoing. The firm said in April that it “acts in strict compliance with the OECD Anti-Bribery Convention and national laws”.

According to an official French website, PNF’s jurisdiction is limited to France and it examines three categories of offences – breaches of probity (such as corruption, influence peddling and favouritism), breaches of public finances (such as aggravated tax fraud or VAT fraud), and damage to proper functioning of financial markets (such as insider trading or price manipulation). Under certain conditions, PNF can investigate crimes committed abroad.

In its latest report, Mediapart cited confidential reports and said Dassault had “no interest in forming a partnership with Reliance other than for political reasons”. The two firms had created a joint venture called Dassault Reliance Aerospace Limited (DRAL) in 2017.

Mediapart also cited the documents to report that the two firms agreed on a total investment of 169 million euros in DRAL, and that Dassault, which held a 49% stake in the joint venture, pledged to provide up to 159 million euros, while Reliance would provide 10 million euros.

The website further cited the documents to report that Dassault and Reliance had signed their first memorandum of understanding setting out the “broad outlines of an agreement” on March 26, 2015, or 15 days before the Indian government announced that it was scrapping the earlier plan of buying 126 Rafale jets in favour of a deal for only 36 jets.

The Congress party said its allegations had been vindicated by the reports that a French judge will probe suspected “corruption” in the Rafale deal. The Congress’s chief spokesperson Randeep Surjewala told media that Prime Minister Narendra Modi must “submit” the government to a probe by a joint parliamentary panel, reiterating an earlier demand.

He described the developments as “a scandalous expose of the Rafale scam” that caused a “loss to public exchequer”. Surjewala said: “The French have ordered investigation into the Rafale deal for corruption and influence peddling. The sweetheart deal is now exposed. It calls for a thorough JPC probe. Will the PM answer to the nation and when will the government submit to a JPC probe?”

Surjewala maintained it is not a Congress versus BJP issue, but a matter related to national security.

The Bharatiya Janata Party alleged on Saturday that Rahul Gandhi was acting as an agent of rival defence companies and being used as a “pawn”, and also said he and the Congress keep raking up allegations of corruption in the Rafale deal in an attempt to “weaken” India. BJP spokesperson Sambit Patra played down the appointment of a judge in France to lead the judicial investigation, saying the development was the outcome of a complaint by an NGO and should not be seen as a matter of corruption.

While the Congress had focused on the cost of the jets, the French probe will focus more on alleged corruption, favouritism and influence peddling. The Rafale deal became controversial when the Opposition, led by the Congress, claimed that the price for each Rafale jet was 1,670 crore, three times the initial bid of 526 crore by Dassault when the previous UPA government was trying to buy the aircraft.

The NDA government has said it cannot disclose details of the price of the jets on two counts: a confidentiality agreement with France, and the strategic reason of not showing its hand to India’s enemies. However, the NDA said the current deal includes customised weaponry.

The NDA’s decision to enter the government-to-government deal with France to buy 36 warplanes was announced in April 2015, and an agreement was signed a little over a year later. This replaced the previous UPA regime’s decision to buy 126 jets, 108 of which were to be made by state-owned Hindustan Aeronautics Limited (HAL) with transfer of technology.

In early 2019, the Comptroller and Auditor General of India, the government’s auditor, said there was nothing untoward in the deal, although, in late 2020, it pulled up Dassault for not meeting the terms of an offset clause. The Centre said later that it would henceforth scrap the offset clause for all government-to-government deals. The Supreme Court, in 2018 and later in 2019, rejected all petitions and said there were no irregularities related to the deal.

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Monday, December 06, 2021