Corruption scandal in France’s sale of warplanes to India

According to the special report of the Mediapart website, France and India signed an agreement in September 2016 for the sale of 36 Rafale fighter jets, worth a total of 7.8 billion euros, during the presidency of François Hollande.

The sale of 36 aircraft produced by the French defense company Dassault Aviation to India was the biggest arms deal that France had ever signed.

Following media coverage of allegations of corruption in the deal, a warning of possible corruption in the sale of Rafale fighter jets was issued to the National Finance Prosecutor’s Office, the financial crimes arm of the French Public Prosecution Service, in October 2018.

These allegations coincided with the routine inspection of the French Anti-Corruption Authority (AFA) to Dassault.

AFA inspectors coincided with an expenditure of 508 thousand euros entered under the heading “gifts to customers” in their 2017 accounts, during their inspection at the company.

Investigators asked the company for an explanation, stating that this expenditure was quite high under the laws of the country, where a few hundred dollars’ worth of meal or an expensive watch could be considered corruption.

Nylon bill suspect

The company announced that this invoice is half of the order for the Indian company Defsys Solutions to make 50 model aircraft for 1 million 17 thousand euros.

AFA inspectors questioned why Dassault had made the model of its aircraft to an Indian company, why this expenditure was recorded as a gift to the customer, and whether these models were actually made, suspected that this record was a bubble transaction to hide some financial movements.

Mediapart’s research shows that Defsys Solutions is not a model making specialist, but a company belonging to the Gupta family, which has been intermediaries in the aviation and defense industries for three generations.

Invoice accused of corruption in India

In January 2019, media in India shared information that Sushen Gupta, who works on the Rafale deal, received confidential documents from the Indian Ministry of Defense.

Gupta, who sent the French firm Dassault a 1 million euro bill, was detained in March 2019 on charges of “money laundering” in the helicopter sale of the Italian-British company AgustaWestland to India.

Gupta, who denied the accusation of taking 50m euros from AgustaWestland and distributing it as bribes to the Indian authorities, was released on bail.

AFA suppresses corruption

However, AFA, aware of Gupta’s arrest and the allegations about him, mentioned the model issue in only 2 short paragraphs in the Dassault inspection report, which was completed in 2020, and decided not to report the incident to judicial authorities.

Rafale fighter jets are also a topic of discussion in India

On the other hand, the sale of French warplanes has continued to be a matter of debate in India since the agreement was made.

The opposition Indian National Congress (INC) argues that the planes, which were negotiated for a lower price during their rule, were purchased for 3 times the price after Narendra Modi came to power in 2014.

The Modi government refused to disclose the price paid for the aircraft, citing the confidentiality clause in the contract with the French company.

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