"The company said the money was used to pay for the manufacture of 50 large replica models of Rafale jets, even though the inspectors were given no proof that these models were made," Mediapart reported citing the confidential audit report on Sunday evening, April 4. THe report of the AFA audit stated that the amount seemed disproportionate in relation to all the other entries.
However, speculations have arisen on the credibility of the justice system of both the countries after the French Anti-Corruption Agency did not flag the prosecution authorities of the alleged payment. The audit coincided with a tip received by the French public prosecution services' financial crimes branch, the Parquet National Financier (PNF), in October 2018 which alleged irregularities in the defence deal.
In the AFA report accessed by Mediapart, Dassault tried to justify 'the larger than usual gift' with a proforma invoice from an Indian company called Defsys Solutions. The invoice, dated March 30, 2017, stated that Defsys was paid 50 per cent of an order worth 1,017,850 for manufacturing of 50 dummy models of the Rafale jets. Each dummy, according to the AFA report, was quoted at a hefty price of 20,357.
The Dassault group, however, failed to provide any documentary evidence to the AFA inspectors, which could establish the existence of those models. Also, Dassault could not explain why the expenditure was listed as a 'gift to clients' in their accounts.
Defsys is one of the subcontractors of Dassault in India which has been linked with controversial businessman Sushen Gupta. Sushen Gupta was earlier arrested and later granted bail for his alleged role in another major defence scam in India, the AgustaWestland VVIP Chopper case. Sushen Gupta was charged by the Enforcement Directorate (ED) for allegedly devising a money-laundering scheme for the payouts during the purchase of the helicopters. So far both Dassault and Defys have not given any statement in this regard.
A deal for 36 fighter jets was signed in 2016 for EUR 7.8 billion which was a government-to-government deal. The first squadron of the Rafale jets were already raised by the Indian Air Force at Ambala and is due to raise the second one at Hasimara in West Bengal.