Anil Ambani’s Loss-making Company Receives Dassault Investment After Rafale Deal, Shows Rs 284 cr Profit
Reliance Infrastructure sold 34.7% of its stake in Reliance Airport Developers Limited, a subsidiary holding, to Dassault for 40 million Euros.
The Reliance Anil Dhirubhai Ambani Group (ADAG) faces more scrutiny as it has emerged that the company had made a profit to the tune of over Rs. 284 crore after selling a part of its stake in its subsidiary, the Reliance Airport Developers Limited (RADL), to Dassault.
In an exclusive report, The Wire detailed that the RADL, which was part of Reliance Infrastructure, sold 34.7% of its shares for about 40 million Euros to Dassault Aviation in the financial year (FY) 2017-18. Around 24,83,923 shares with face value of Rs. 10 each were sold at a premium to Dassault which helped the company post profits for the first time in two years. For the FY 2016-2017, RADL had posted a loss of about 10.35 lakhs, while for the FY 2015-2016, it had posted a loss of about six lakhs.
The sale of stake has been documented in the annual reports of both parties. Dassault listed the purchase of stake as a part of its “non-listed securities” and cited in its report that, “In 2017, we also strengthened our presence in India through an acquisition of a 35% stake in Reliance Airport Developers Limited, which operates in the management and development of airport infrastructures.” However, RADL’s annual report, which is included in the website of Reliance Infrastructure, only has a barebones of the sale of shares with the rest being blotted out, seemingly on purpose.
The Land Agreement
This could have been considered as a routine business activity coming as a follow-up to the joint venture for the defence agreement signed between the French organization and the ADAG. However, what has made it murky is the convoluted passage of monetary outflows which seem to lead back to the Rafale agreement itself.
RADL received lucrative contracts from the Maharashtra government in 2009 to develop airports in second and third tier cities. On account of RADL’s inability to complete the project, in October 2015, the state government decided to pull-out five airports — in Yavatmal, Nanded, Latur, Osmanabad and Baramati — which were a part of the project.
However, in July 2015, the Maharashtra Airport Development Council (MADC) allotted another ADAG entity, Reliance Aerostructure, about 289 acres of land at around Rs. 63 crores, in its Special Economic Zone (SEZ) in Mihan, Nagpur. Reliance Aerostructure, which said that it would need only 104 acres of land, paid its pending dues nearly two years later, in July 2017.
The timing of, and the financial transaction for this land allotment stand out specifically. For one, the land was allotted merely months after Reliance Aerostructure was announced as the offset partner for the Rafale deal with Dassault. Secondly, there is the circuitous route by which it paid its longstanding dues for the land it had received.
Reliance Aerostructure received an in-house company deposit of Rs. 89.45 crores in the FY 2017-18 from Reliance Infrastructure, seemingly after the latter company had sold its RADL stake. Post this deposit, Reliance Aerostructure paid off its dues to the tune of about Rs. 38 crores to the MADC.
Given that Dassault Chief Executive Officer (CEO) Eric Trappier had stated in an interview to CNBC that Reliance had been selected as the offset partner on account of ready availability of land near an airport, these business activities add fuel to the raging fire of Rafale scam.