The CEO said that the money invested by Dassault as part of the Rafale deal was not going to Reliance directly but to a JV that included DassaultNew Delhi: Days after Congress president Rahul Gandhi accused French aircraft manufacturer Dassault of giving Anil Ambani’s Reliance Defence Rs 284 crore as the “first installment of kickbacks” in order to secure the deal for Rafale fighter jets, Dassault has launched an offensive. In an interview given to news agency ANI, its Chief Executive Officer (CEO) Eric Trappier dismissed Gandhi’s allegations that he lied about the details of the Dassault-Reliance Joint Venture (JV) for offset contracts in the Rafale Jet deal.
“I don’t lie. The truth I declared before and the statements I made are true. I don’t have a reputation for lying. In my position as CEO, you don’t lie,” said Trappier, responding to Gandhi’s charge.
‘Money invested by Dassault not going to Reliance directly’
Speaking about the investment that Dassault was supposed to make as part of the offset obligations, the CEO said that the money invested by France’s defence behemoth was not going to Reliance directly but to a joint venture (JV) that included Dassault.
Trappier said that Reliance would match the amount since the shareholding pattern is 49 percent Dassault and 51 percent Reliance as per prescribed government norms.
“We are supposed to put in this company together about Rs 800 crore as 50:50. For the time being, to start work in the hangar and to pay workers and employees, we have already put Rs 40 crore. But it will be increased to Rs 800 crore, which implies Rs 400 crore by Dassault in the coming five years,” said Trappier.
He added Dassault has seven years to perform the offset. “During first three years, we are not obliged to say with who we are working. We have already settled work and agreement with 30 companies, which represents 40 percent of total offset obligation as per contract. Reliance is 10 percent out of the 40, while rest 30 percent is a direct agreement between these companies and Dassault,” Trappier said.
No mention of why Reliance was selected by Dassault
In September, when former French President came out in the open and said that the choice of Reliance as a defence partner was thrust upon France by the Indian government, it stirred a storm in India’s political landscape. One of the prime aspects of the deal that was raked up by the Opposition was the fact that Reliance, which was selected as an offset partner by Dassault, came with no experience of manufacturing fighter jets. Documents also showed that the subsidiary that was picked by Dassault was registered 13 days before the agreement was signed.
However, the interview made no mention of why Dassault selected Reliance as a defence partner despite lack of credentials.
‘I Took the Decision to Pick Reliance over HAL’
Speaking about the initial agreement with Indian defence major Hindustan Aeronautics Limited (HAL) and the subsequent breakdown of talks with the PSU for production of Rafale jets, Trappier said, “It’s because the 126 didn’t go smooth that the government of India had to reconfigure to urgently acquire 36 from France. And then I took the decision to continue with Reliance, and HAL even said in the last few days that they were not interested to be part of the offset. So, it has been done by my decision and the decision of Reliance to invest in a new private company.”
‘We could have gone for Tata’
Trappier said that in the initial phase of the negotiation, Dassault was in discussions with several other companies for offset tie-ups like Tata and other family groups: “We were in 2011, Tata was also discussing with other flying companies. We finally decided to go ahead with Reliance as they have experience in big engineering facilities.”
PSU Watch is a business news brand of 27 Frames Communications LLP. It places the spotlight on PSUs, Governance, Bureaucracy, Defence and Public Policy as the sector traverses through a period of radical change.