Francois Hollande, who was President of France when the deal for 36 Rafale fighter aircraft was announced and signed with India, has said Anil Ambani’s Reliance Defence was chosen as the offset partner by Dassault because the Indian government had “proposed” its name.
“We didn’t have a say in that. It was the Indian government that proposed this service group (Reliance), and Dassault who negotiated with Ambani. We didn’t have a choice, we took the interlocutor who was given to us,” Hollande was quoted by French news website Mediapart.fr on the offset contract.
Hollande was responding to The Indian Express news report referred by Mediapart that Ambani’s Reliance entertainment had co-produced a French film Tout La-Haut with his partner Julie Gayet when India and France were negotiating the Rafale deal, “That’s why, on the other hand, this group (Reliance) did not have to give me any thanks for anything. I couldn’t even imagine that there was any connection to a film by Julie Gayet.”
The former French President’s remarks contradict the Indian government’s claim that the deal between Dassault and Reliance was a commercial pact between two private parties and the government had nothing to do with it.
In an interview to The Indian Express last week, Defence Minister Nirmala Sitharaman, responding to a question on Reliance Defence being chosen as Dassault’s offset partner, said: “Isn’t that a decision for a commercial enterprise to take on their own? I have nothing to do with it, I have not prompted them, not led him, not told them, I have not instructed them, I have not done any match-making whatsoever, so why am I be worried by what he would tell me? It may be A, B or C, it may be 70 different partners, it may be buying a product, they may be investing, it may be buying a service, so where am I in it? And how can I tell him you can say this and you cannot say that. Whatever he tells, and claims about obligation fulfilled, I have to hear them out.”
In a Twitter response Friday to Hollande’s remarks, the Ministry of Defence said: “The report referring to fmr French president Mr. Hollande’s statement that GOI insisted upon a particular firm as offset partner for the Dassault Aviation in Rafale is being verified. It is reiterated that neither GoI nor French Govt had any say in the commercial decision.”
When The Indian Express sought a comment from the French embassy in New Delhi, its spokesperson said: “No comment.” Messages left on the answering machine of the media officer of Hollande did not elicit a response. The spokesperson for Reliance Defence was not available for comment.
As reported by The Indian Express on August 31, Reliance Entertainment announced on January 24, 2016 that it had entered into an agreement with Gayet’s firm, Rouge International, to jointly produce a French film. Two days later, Prime Minister Narendra Modi and Hollande signed an MoU in New Delhi for the purchase of 36 French jets in flyaway condition.
Hollande told Mediapart that he was not aware of the announcement of the film with Gayet during his visit to India as he was busy with matters of the state. According to Mediapart, the film was made on a budget of Euro 10 million, which included a promised Indian funding by Reliance Entertainment of Euro 3 million, eventually reduced to Euro 1.6 million.
Gayet told Mediapart that the funds were not paid directly by Reliance but through an investment fund, VisVires Capital, based in Paris and Singapore, which was founded by Ravi Viswanathan, a former French business banker of Indian origin. Viswanathan has personally known Ambani for 25 years and had invested with him in wine business in India, which he told Mediapart.
Directed by French actor and film-maker Serge Hazanavicius, Tout la-haut was released in France on December 20, 2017 but never released in India. This was eight weeks after Dassault Aviation chairman Eric Trappier and Ambani laid the foundation stone for DRAL manufacturing facility in Nagpur in the presence of then French Defence Minister Florence Parly; Roads and Highways Minister Nitin Gadkari; Maharashtra Chief Minister Devendra Fadnavis and Ambassador of France to India Alexandre Ziegler.
The deal for 36 Rafale aircraft in a government-to-government agreement was announced by Prime Minister Modi on April 10, 2015 during his visit to Paris, which led to the cancellation of the 126 aircraft deal being negotiated by the previous government. The deal was eventually signed on September 23, 2016 in Delhi between then Defence Minister Manohar Parrikar and his French counterpart.
According to Mediapart, Hollande said the original deal was to be 126 aircraft, “but with the change of government (in India in 2014), the Indians reformulated their proposal, which was less attractive for us, since it was 36 aircraft only. But the manufacture was planned in France, contrary to the previous proposal. So we lost on one side, but we won the other.”
Under the offsets clause, France is to invest 50 per cent of the total order cost in local contracts in India, worth Rs 30,000 crore. The offset obligations of the deal are to be discharged from September 2019 to September 2023, as per the contract.
The Rafale offset was the first project of this magnitude won by Reliance Defence, which placed it at the centre of a major political row. Opposition parties, including the Congress, have alleged that undue favours had been granted to Ambani’s firm in this deal, a company without any defence manufacturing experience.
In a statement, the Ministry of Defence had stated on February 7 that “no Indian Offset Partner for the 2016 deal for 36 Rafale Aircraft has been so far selected by the vendor (DA) because as per the applicable guidelines, DA is free to select the Indian Offset Partners and provide their details at the time of seeking offset credits, or one year prior to discharge of offset obligation.”