Sherpa Pursues Alleged Corruption Inquiry Into Indian Rafale Acquisition
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Sherpa Pursues Alleged Corruption Inquiry Into Indian Rafale Acquisition

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by Pierre Tran

Paris – Sherpa, a French non-governmental organization, said it filed April 28 a request for a judicial inquiry into alleged corruption on India’s acquisition of 36 Rafale fighter jets in a deal worth €7.8 billion ($9.4 billion).

“Sherpa, represented by its lawyers William Bourdon and Vincent Brenghart, is filing a complaint and requesting the opening of a judicial investigation for corruption, favouritism and various financial offences likely to have occurred in the context of the sale of 36 combat aircraft produced by Dassault Aviation and sold to India in 2016,” the NGO said in a statement.

The filing was in response to a lack of official action following Sherpa’s Oct. 26 2018 call for a French investigation into the pick of Reliance as the Indian industrial partner for Dassault, the anti-corruption office said. Reliance had little experience in the aeronautics industry,

The French National Financial Prosecutor, in the wake of the 2018 filing, failed to conduct a full enquiry into the selection of Reliance, which was then in financial difficulty and was led by an executive close to the Indian prime minister, Sherpa said.

Before the appointment of Reliance, Dassault had been in talks with state-owned Hindustan Aeronautics Ltd. (HAL) as local partner on a prospective deal for 126 Rafales. New Delhi in 2015 ditched the talks with Dassault and switched to a government-to-government order for 36 units.

It was part of that €7.8 billion deal for 36 Rafales that India selected Reliance as local partner to Dassault.

Apart from an informal interview with a Dassault lawyer, the French prosecutor’s office failed to conduct a detailed inquiry, and in June 2019 ruled “absence of an offence,” reported the website Mediapart, Sherpa said.

Sherpa has worked on the case separately from Mediapart, a lawyer for the NGO said.

Sherpa has conducted its own inquiry over the last two years, the NGO said, and the reporting of Mediapart pointed up a “passivity” of the French Anti-Corruption Agency, while there were suspicious payments, “hidden commissions” and the absence of anti-corruption clauses in weapons contracts.

Mediapart reported that Dassault paid €1 million to Sushen Gupta, an Indian “middle man” who helped secure the Rafale contract. The French aircraft builder told the Anti-Corruption Agency the payment covered 50 reduced size models of the fighter, to be presented as gifts to customers in India.

There was concern that the €1 million payment may have covered illegal commissions, and the excising of anti-corruption clauses from the Indian contracts may be related to that payment, Mediapart reported.

The Indian authorities have conducted investigations on Gupta following corruption allegations on the 2010 sale of AgustaWestland helicopters. The Anti-Corruption Agency reported to two ministries — budget and justice — seen as placing the office under political pressure.

There were flaws in a French anti-corruption system which gave “too much leeway for the implementation of internal procedures in companies to fight corruption,” Sherpa said.

“The present case is an example of the failure of this approach, which relies on a convergence of the private interests of the company and those of the general interest that criminal law is supposed to protect,” Sandra Cossart, executive director of Sherpa, said in the statement.

“Those latest revelations show to what extent the admissibility of associations to bring judicial actions before the courts is a central component of our democracy.”

A Dassault spokesman declined to comment and referred to an April 8 company statement in response to the Mediapart reporting.

Official organizations, including the French Anti-Corruption Agency, had conducted “numerous controls,” the Dassault statement said, and no violations were reported in the Indian contract for 36 Rafales.

The company acted in strict compliance with the OECD anti-bribery convention and in line with national laws, particularly the French law known as Sapin-2, adopted Dec. 9, 2016, the company said.

“Since the early 2000s, Dassault Aviation has implemented strict internal procedures to prevent corruption, guaranteeing the integrity, ethics and reputation of the company in its industrial and commercial relations,” the company said.

“In the context of the Sapin-2 law, the company has completed and strengthened its system for the prevention and detection of corruption and influence peddling, both at the level of the parent company and its subsidiaries.”

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