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Govt Note to SC Throws up More Modi Wrongdoing in Rafale Scam

The document on the decision-making process for buying 36 Rafale provides ample legal basis for the Supreme Court to act against Modi government.

The document submitted by Modi government to the Supreme Court last month, a copy of which was shared with the petitioners on Monday, has brought out more major wrongdoing by Prime Minister Narendra Modi in the Rs 59,000 crore Rafale scam.

The document shows that while Modi government accepted necessity of 36 Rafale fighter jets for Indian Air Force (IAF) on May 13, 2015, Modi had personally announced on April 10, 2015, in Paris that his government was buying 36 Rafale jets from France. That makes it amply clear that the IAF had never asked for only 36 Rafales nor was it consulted in any manner before the announcement. It was possibly done for extraneous reasons which could include illegal gratification and corruption with the likely connivance of a crony businessman with the Modi government.

Paragraph 23 of the document tells us that the Acceptance of Necessity (AON) for 36 French fighter jets was approved by the Defence Acquisition Council (DAC) chaired by the defence minister on 13 May 2015. The AON is the first step in the process of acquiring any major defence item, which is approved by the DAC: there can be nothing announced or done for procurement before the acceptance of AON.

To make it clearer, each of the defence services can have a wishlist for a large number of defence platforms and equipment but each of those wishes doesn’t result in government initiating the process of procurement. The government initiates any process only after it approves the AON. In case of Rafale scam, Modi made the announcement a month before even the government accepted the need of 36 fighter jets. The obvious question is: why did Modi do it?

The answer comes in two parts. One is the absolutely clear statement of former French President, Francois Hollande under whose Presidency the Rafale deal was signed with India. Hollande had told MediaPart that “The Indian government proposed this service group, and Dassault negotiated with (Anil)Ambani. We did not have the choice; we took the interlocutor who was given to us.”

Hollande also told MediaPart that Modi government “imposed Reliance on us”. To news agency AFP, Hollande reiterated in Montreal that the name of (Anil Ambani’s) Reliance Group had appeared as part of a “new formula” in negotiations over the Rafale deal, decided by the Modi government after it came to power.

Now to the second bit. So, Modi wanted Anil Ambani to get the offsets for Rafale deal and pushed for buying 36 Rafale against the wishes of the IAF. Fine, but how does it lead to any financial wrongdoing?

That is where the price of 36 Rafale fighter jets agreed upon by India comes in. As this report shows, Modi government paid Dassault Euro 7.85 billion for 36 Rafale fighters, or an average-per-fighter cost of Euro 217 million. That is 40 per cent higher per aircraft than Dassault’s quote of Euro 19.5 billion for 126 fighters, or Euro 155 million per Rafale. Yes, 40 per cent more is what Modi government paid.

The aircraft in both the deals are the same, as stressed by the government in its document (Paragraph 20) submitted to the Supreme Court, which runs contrary to media reports that 36 Rafales have any additional features. Modi government has often claimed that inflation accounts for the Rafale’s higher cost in 2016. In fact, the 2007 RFP mandates (in Annexure 1 to Appendix E) that prices must be reduced to the Net Present Value (NPV). This discounts inflation during the delivery period.

But what about the money trail from the additional amount paid by Modi government? That is possibly seen from this report, wherein Dassault made an unexplained investment in 2017 of approximately 40 million euros in a non-defence Anil Ambani venture that is loss making and has almost zero revenues. The investment translated into a Rs 284 crore profit for the Ambani group company, Reliance Infrastructure, which sold shares in a subsidiary, Reliance Airport Developers Limited (RADL) at a premium.

Assuming that Modi govt has already paid 15 per cent of the Rs 59,000 crore deal to Dassault, Rs 284 crore is three per cent of the amount paid, a significant proportion. With opaque electoral bonds started by Modi government, it is highly possible that three per cent of the amount paid so far to Dassault has come back to India’s ruling party. There is no way anyone can track any funds coming via electoral bonds to BJP, but considering all the wrongdoing unearthed in the Rafale scam, the beneficiary should not be hard to guess.

The scam, including the money trail, in the Rafale scam is not hard to establish. A CAG and a JPC can find much more but we don’t hear a word from the CAG; a JPC has sent shivers down Modi’s spine. The matter is already with the CBI but it is the Supreme Court we should expect to act on the wrongdoings in the Rafale scam under Modi government. The document on the decision-making process for buying 36 Rafale provides ample legal basis for the Supreme Court to act against Modi government. India looks up to its apex court with bated breath.

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