Dassault flies into fighter sales bung storm

27th October 2004, Comments 0 comments

NEW DELHI, Oct 27 (AFP) - The use of middlemen by French aeronautic group Dassault to push aircraft sales in India raised a storm Wednesday as French Foreign Minister Michel Barnier met New Delhi government leaders.

NEW DELHI, Oct 27 (AFP) - The use of middlemen by French aeronautic group Dassault to push aircraft sales in India raised a storm Wednesday as French Foreign Minister Michel Barnier met New Delhi government leaders.

With India banning middlemen from defence contracts since 1989, The Hindu newspaper headlined "Dassault had middlemen, says court documents ... Indian government was in the dark".

The Indian Air Force (IAF) signed for 10 Mirage 2000H fighters from Dassault Aviation on September 19, 2000, which are expected to be delivered by the end of this year.

The Hindu said Dassault retained Keyser Incorporated, a Panamanian-based firm, to prospect for the deal in India unbeknownst to the government in Delhi. Dassault promised Keyser 2.5 percent of the sale reportedly worth nearly EUR 347 million (USD 443 million).

Keyser even took Dassault to court in Paris in 2001 demanding payment of more than EUR 1.6 million (USD 2.04 million) in commission due for a first tranche of the Mirage contract.

However, in a written verdict the Paris commercial tribunal found that a contract Dassault had signed with Keyser in September 1996 and renewed in June 1997 as well as July 1998 ran out on December 31, 1998.

There was no evidence it had been extended and it ordered Keyser to return to Dassault USD 100,000 dollars paid in 1997 as an advance on commission.

Keyser contended in court that the commission contract had effectively run on since meetings continued with Dassault.

Dassault charged that Keyser threatened to reveal its role to India in a bid to blackmail the company.

Barnier played down any controversy. "I heard about this affair looking at the newspapers this morning," he told a press conference in New Delhi.

"Very frankly it's an affair about which there is a ruling in a French court. I am not going to comment. The Indian authorities have very clearly and publicly stated this position."

Indian air force chief S. Krishnaswamy on Monday said: "Clearly there were no middlemen or agents involved when the deal was signed."

He claimed Dassault hired Keyser for market research in the region, but added that the Indian government would study any document showing Dassault employed Keyser to try to swing the deal.

The Indian Express had also put the controversy on its front page Monday, quoting the IAF as saying the deal was now under the direct control of India's defence ministry, which refused to comment.

India bought 49 Mirage from Dassault in 1985 and signed up for more to replace losses.

Today the IAF is looking to buy 140 multi-role aircraft. Dassault, US giant Lockheed and Britain's BAe are in the running.

Barnier was holding talks with Prime Minister Manmohan Singh, Defence Minister Pranab Mukherjee and Indian counterpart Natwar Singh on Wednesday.

Among agenda items are a EUR 2 billion (USD 2.5 billion) proposal to supply six submarines and 36 missiles and a similarly sized proposed sale of 43 Airbus planes to Indian Airlines.

The issue of middlemen has been sensitive in India since the late 1980s when late premier Rajiv Gandhi was accused in a USD 1.3 billion bribe scandal involving Swedish firm Bofors.

It was Gandhi who then outlawed the use of middlemen.

Although he was finally cleared by a Delhi court last February the scandal rumbles on and Swedish investigators have called for his widow Sonia Gandhi, today "convenor" of the government coalition, to give evidence which they believe is crucial to the case.

Former Indian army chief General V.N. Sharma said the ban had failed to stop the middlemen.

"Thanks to politicians and bureaucrats these things will never change whether it is France, Britain or the United States because India is the largest military procurement market in the world, even bigger than China."

"India is the most corrupt country in the world, but what to do? We need equipment. We are stumped."

© AFP

Subject: French News

0 Comments To This Article