Rafale deal: Dassault said it "has freely chosen" to partner with Anil Ambani's firm.
New Delhi: Rafale maker Dassault Aviation selecting Anil Ambani's Reliance Defence as offset partner was a "trade-off" that was "mandatory" to win the 59,000-crore deal with India for 36 fighter jets, according to "internal documents" cited in a report by French investigative journal Mediapart. The report says that a top Dassault official, Loik Segalen, had explained to his staff at a presentation on May 11, 2017, that the joint venture was "imperative and obligatory for Dassault Aviation, to accept this condition, in order to obtain the export contract for Rafale from India".
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Dassault Aviation has clarified in a statement that it had "freely chosen" its partnership with Anil Ambani's company. It also said other partnerships had been signed with companies such as BTSL, DEFSYS, Kinetic, Mahindra, Maini, SAMTEL and negotiations were on with a hundred-odd other potential partners.
The French defence manufacturer said on May 11, 2017, its Chief Operating Officer Loik Segalen had informed the Central Works Council of the creation of the Dassault Reliance Aerospace Limited joint-venture "in order to fulfill some of the offsets commitment".
Mediapart's article reinforces the explosive statement by former French president Francois Hollande last month that France did not have a choice in selecting Anil Ambani's rookie defence company for the offset clause in which Dassault has to ensure that business worth at least half the deal's worth -- Rs.30,000 crore -- is generated in India. Dassault had said even then that the decision was its own.
Mediapart stood by its latest report. "These are minutes of a meeting held on May 11, 2017 within the office of Dassault Aviation company which fully confirms the statement of Mr. Hollande on the choice or the imposition of Reliance Group as Dassault's partner for the Rafale contract," Antonn Rouget, a journalist with Mediapart, told NDTV in Paris.
Mr Rouget said: "Very clearly, the number 2 of the Dassault group says, according to the minutes of this meeting, that the choice to make a joint venture for the construction of a factory in Nagpur with Reliance is a mandatory tradeoff for Dassault to obtain the contract of 36 Rafales. Very clearly the initiative to create this joint venture is closely linked to the acquisition of the contract for 36 Rafales for India."
The internal document used the word "contrepartie", which, the Mediapart journalist said, meant - I give something to someone and in return they give me something. "This just shatters all the explanations that the Indian government has been giving for weeks. In France we are really surprised by this explanation that the choice of Reliance is only made by Dassault and that the Reliance group was not proposed, leave alone imposed on the French authorities and Dassault," said Antonn Rouget.
Mr Hollande's statement caused political convulsions in election season in India. The opposition accuses the government of ignoring the state-run defence company Hindustan Aeronautics Limited (HAL) to benefit deep-in-debt Anil Ambani. Both the government and the industrialist have denied it.
On Wednesday morning, the Supreme Court, responding to petitions, asked the government to submit in a sealed envelope the details of the decision-making process leading up to the deal.
The latest Mediapart revelations coincide with Defence Minister Nirmala Sitharaman's France tour, when she will visit the Dassault factory. Ms Sitharaman will also meet her French counterpart, Florence Parly. Sources say Dassault is likely to push for more Rafale jets to be bought by India during the Defence Minister's three-day visit.
The previous Congress-led UPA government had negotiated with Dassault for 126 Rafale jets under which 18 jets were to be sent in a fly-away condition and 108 were to be assembled in India by HAL. The deal was scrapped. Prime Minister Narendra Modi announced the new deal for 36 Rafale jets after holding talks in Paris with then president Hollande.