The controversy around the Rafale deal refuses to dissipate. It has appeared full blown in the Central Bureau of Investigation (CBI) scandal and is being cited as the number one reason for CBI Director Alok Verma’s ouster.
A few weeks before the drama in the CBI unfolded, Verma received a criminal complaint seeking an investigation into the purchase of 36 Rafale aircraft. The advocate Prashant Bhushan and two former Ministers in the previous National Democratic Alliance (NDA) government, Arun Shourie and Yashwant Sinha, met him at the CBI headquarters on October 4 to file the complaint. They called upon the CBI to register a first information report (FIR) against Prime Minister Narendra Modi and Defence Minister Manohar Parrikar under the Prevention of Corruption Act and to investigate and prosecute what they described as the largest ever defence scam. They also asked the agency to file FIRs against Dassault Aviation and its CEO Eric Trappier for abetment of offences and Reliance ADAG chairman Anil Ambani for conspiring with the Prime Minister to receive undue advantage or pecuniary gain against the public interest.
The government was reportedly upset with the CBI Director for meeting them. Members of the government were quoted as saying that it was unusual for CBI chiefs to meet politicians. Responding to such reports, Shourie told the media: “There has been no meeting before or after. Prashant’s office rang up the CBI Director’s office to fix an appointment for a meeting and to submit the complaint (on Rafale). We did this during office hours and not in the middle of the night. Procedure says within a week the complaint should be acted into FIR. We still do not know what happened to our complaint after three weeks.”
The complaint, a copy of which was given to Central Vigilance Commissioner (CVC) K.V. Chowdary, stated that Modi had abused his office and his position as a public servant to obtain a valuable thing in the nature of offset contracts for Anil Ambani. The misuse resulted in an increase in the price of procurement and provided a pecuniary advantage to both Dassault and Anil Ambani’s Reliance Aerostructure Limited (RAL). This would amount to criminal misconduct under Section 13(1)(d)(ii) of the Prevention of Corruption Act, the complaint said.
Verma reportedly sought the Defence Ministry’s response on the documents referred to in the complaint. Opposition leaders allege that this was what prompted a jittery government to remove Verma. Congress president Rahul Gandhi tweeted: “The Prime Minister's message is clear. Whoever comes near the Rafale deal will be removed, wiped out.” At a rally in Rajasthan, he said that the Prime Minister had asked the people to vote for him as he wanted to be a “chowkidar” for the nation but now the “chowkidar” himself committed robbery. Congress spokesperson Randeep Surjewala said Modi was scared of the Rafale scam probe and so was trying to kill India’s premier investigative agency. Delhi Chief Minister Arvind Kejriwal wondered whether Verma’s investigations into the deal could become a problem for Modi.
The Rafale deal has been viewed with suspicion ever since its inception. Earlier this year, the Aam Aadmi Party (AAP) asked the CBI and the CVC to investigate it. Lately, BJP supporters, too, have begun to see something fishy in the deal, judging by the government’s defensive behaviour.
Shourie told the media that the decision to send Verma on leave showed disregard to civil services: “These so-called raids, closing and sending officers on compulsory leave during midnight, show complete panic. Just see what this does to the morale of civil services. This is complete disregard to that and conducting such raids looks like Soviet Union, China or Middle Eastern [West Asian] countries.”
On the day Verma was removed, Yashwant Sinha, Shourie and Bhushan approached the Supreme Court requesting a CBI probe into the matter. Bhushan said that their petition had nothing to do with the government’s decision to send Verma on forced leave. “Apart from protecting Asthana from investigation, the Rafale complaint by Shourie, Sinha and myself, entertained by the CBI Director, must be another reason for the government to remove him with such alacrity by this midnight order,” he tweeted. He added that the agency was not able to proceed with the matter because Section 17(A) of the Prevention of Corruption Act required the CBI to take the government’s permission to start an investigation. The petition urged the court to instruct the Centre not to “intimidate or influence” officials who would probe the deal.
The complainants were aware that their request to the CBI to probe the Rafale deal potentially placed the agency in a “peculiar situation, of having to ask the accused himself for permission to investigate a case against him”. They said towards the end of the complaint: “We realise that your hands are tied in this matter, but we request you to at least take the first step, of seeking permission of the government under Section 17(A) of Prevention of Corruption Act for investigating this offence and under which ‘the concerned authority shall convey its decision under this section within a period of three months, which may, for reasons to be recorded in writing by such authority, be extended by a further period of one month’.” They also pointed out that “prior sanction is not necessary for registration of FIR and investigating the offences committed by Mr. Ambani and Mr. Trappier”. Trappier tried to clear the air in an interview to TheEconomic Times in which he said Dassault had chosen to do business with the Ambanis way back in 2011-12, much before Modi became the Prime Minister and former French President Francois Hollande was in the picture. He said the Reliance Group was chosen because the Ambanis were a “respectable family”. What he did not mention was that Dassault had signed a deal with Mukesh Ambani, not Anil Ambani, for 126 fighter jets during the reign of the United Progressive Alliance (UPA) government. The deal fell through in 2014 with Mukesh Ambani pulling out of it. In 2015, Dassault signed a contract with his business rival and younger brother Anil.
‘Serious lapses in procedure’
Detailing serious lapses in due diligence and procedure, the complaint states that the Defence Minister was improperly influenced to approve RAL as an offset partner when it was not even engaged in the manufacture of any defence equipment and was in violation of its industrial licence. Anil Ambani’s group of companies was in dire financial health and had negligible experience in the defence sector, with negligible capital investments in Anil Ambani’s many sham defence companies, in particular RAL. Even though the conditions of its licence did not allow it, RAL publicly stated that it would manufacture civilian business jet components, in violation of the object of offset policy.
The complaint states that “[o]n 3rd of March, 2015, Mr. [Anil] Ambani admitted to a meeting between Modi and himself…, in which Modi invoked him to enter the defence sector”. Modi apparently told him: “Anil, do you know that even the tears we shed in this country are not our own? Every tear gas shell used by our security agencies is actually imported!” The complaint explained that “evidently, proximate to the date [April 10, 2015, when Modi announced the new Rafale deal in Paris] of the commission of the offence, there was a meeting of minds between Modi and Ambani”. It pointed out that it was “most unusual that the PM talked to Ambani about the sensitive defence sector, given that Ambani at the time was being investigated by the CBI for corruption in the 2G scam… Ambani at the time had no interests in the defence sector and it wasn’t a legitimate conversation about any business that Ambani had any actual investment or interest in.” It goes on to say that Anil Ambani’s companies were “buried under a mountain of debt” at that time. “On Mr. Modi’s suggestion, Mr. Ambani promptly forayed into a highly technical, sensitive, and government-dependent sector such as defence, confident of Mr Modi’s authority and influence to swing any deal in his favour. Thereafter, 37 days prior to the commission of the offence, Ambani acquired management control of Pipavav Defence & Engineering on 4th of March, 2015, by purchasing 17.77 per cent stake in the company. A controlling stake of 36 per cent was only acquired one year later on 16th of January, 2016.”
The complaint goes on to say: “Evidently, on 10th of April, 2015, i.e. the date of the commission of the offence, Mr. Ambani did not ‘own’ any company engaged in the manufacture of products and services mentioned in ‘List of Products and Services Eligible for Discharge of Offset Obligations’… . Pipavav Defence& Engineering was later renamed Reliance Naval & Engineering. Reliance Naval & Engineering has been unable to fulfil the orders for Naval Offshore Patrol Vehicles … which are long overdue. The company is close to bankruptcy and insolvency proceedings have been initiated by its creditors against this company…”
Ambani was squatting on many industrial licences granted en masse to his defence companies and also squatting on the subsidised land granted to RAL after it was already chosen as offset partner, the complaint says. “Pursuant to the conspiracy, and with advance knowledge that could only have been provided by Mr. Modi, Mr. Ambani incorporated a company called Reliance Defence Ltd. on 28th of March, 2015, just 12 days before 10th of April, 2015. It is clear that the knowledge as regards [to] what was to happen on 10th of April, 2015, was provided by Mr. Modi to Mr. Ambani.”
Weak excuses
In his recent interview, Trappier said that Dassault chose Anil Ambani’s group as an offset partner because it had land near the runway in Nagpur. But it later came to light that on April 10, 2015, Reliance Defence did not have any land. It was only in June, after the deal was already announced, that Reliance Defence gave a presentation to the Maharashtra government and demanded 289 acres (one acre is 0.4 hectare) of land in the multi-modal international cargo hub and airport SEZ area of Nagpur. The Devendra Fadnavis government approved and allotted the land to the group on August 28. It was then that Anil Ambani announced the setting up of a large greenfield Aerospace Equipment Manufacturing Centre near Nagpur. The formal agreement on Rafale was signed in September 2016. In October, a joint venture between Reliance Defence and Dassault was announced.
On October 31, hearing a batch of petitions on the matter, a Supreme Court bench of Chief Justice of India (CJI) Ranjan Gogoi and Justices U.U. Lalit and K.M. Joseph sought more details from the Centre on pricing and advantages of the Rafale deal. But when Bhushan asked for a CBI investigation, the CJI said that would have to wait. “Let the CBI put its house in order first,” he said to the petitioners. Attorney General K.K. Venugopal objected to the disclosure of pricing details, stating that it was covered under the Official Secrets Act. The CJI asked him to submit the same in an affidavit and said, “We will consider the same.”
The political furore around the deal is not going away any time soon. In a piece published on the NDTV website, Yashwant Sinha said that the Rafale deal had already done a lot of damage and had the potential to destroy this government. “There was a civil war going on in the CBI. The war was set in motion by the government of India in order to serve its petty little interests like preventing an investigation into the Rafale deal. At one stage, however, it lost control; the Prime Minister’s personal intervention was also of no avail and the whole affair turned ugly and came hurtling out into the open,” he said.
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