The Union defence ministry on Friday suspended its business dealings with private firm Defsys Solutions Private Limited, citing its alleged involvement in the AgustaWestland corruption case, ANI reported.
The case pertains to allegations of bribery and money laundering linked to a deal signed in 2010 with the British-Italian company for the supply of 12 VVIP helicopters to India. The Congress-led United Progressive Alliance government was in power at the Centre at the time of the alleged scam.
Sushen Gupta, who owns Defsys Solutions, had been arrested by the Enforcement Directorate in March 2019 on allegations of money laundering in connection to the chopper scam. He was later released on bail.
Incidentally, in April 2021, French online journal Mediapart had reported that Defsys Solutions had received a payment worth one million euros (Rs 8.62 crore) in connection with the deal to supply Rafale fighter jets to India. The manufacturer of the fighter jets, Dassault Aviation, had not been able to explain the payment to French anti-corruption authorities, the report had said.
On Friday, the defence ministry said that it had received inputs from the Central Bureau of Investigation about the investigation against Defsys Solutions in the AgustaWestland case. The ministry said that business dealings with the firm will remain suspended for a year, or until further orders.
Six arms manufacturing companies have been debarred by the government as well, the circular issued by the defence ministry stated. Besides, business dealings have been suspended with 14 companies and have been restricted with two firms.
The debarred entities include four foreign companies and two Indian ones, according to The Times of India. The four foreign firms are Singapore Technologies Kinetics Limited, Israel Military Industries Limited, Rheinmetall Air Defence (based in Switzerland) and Corporation Defence (based in Russia).
The two debarred Indian companies are Delhi-based TS Kisan & Co Private Limited and Ludhiana-based RK Machine Tools Limited.
Rafale deal - Defsys links
Soon after the Rafale deal was finalised on September 23, 2016, Dassault Aviation had agreed to pay one million euros (Rs 8.62 crore) to Defsys Solutions, one of its sub-contractors in India. Dassault said that money was used to pay for the manufacture of 50 large replica models of Rafale jets, Mediapart reported last year.
The French company was, however, not able to provide any proof to the country’s anti-corruption agency, Agence Française Anticorruption, or AFA, to show that the models had actually been made.
In 2017, the AFA had been set up to check whether large companies have implemented the anti-corruption procedures set out in the French law known as Sapin 2, Mediapart said in its report. In October 2018, as various reports flagged possibilities of corruption in the Rafale deal, the AFA decided to audit Dassault.
During this process, the anti-corruption agency came across an item of expenditure in Dassault’s 2017 accounts under the heading “gifts to clients”. The payments made to Defsys Solutions had been listed under this head.
In spite of the apparent irregularity, the AFA, which is answerable to both the budget ministry and the ministry of justice in France, did not refer the matter to the prosecutors, according to Mediapart.