Hours after a French media outlet stated that Dassault Aviation was obligated to enter into a deal with Anil Ambani-led Reliance Defence, the aerospace major issued a clarification on Thursday, saying that it had freely chosen to enter into a partnership with the Indian firm.
Downplaying the controversy, Dassault Aviation said the comments made by one of its top executives were to explain to the trade union why the Falcon manufacturing unit needed to be taken out of France.
The explanation came hours after Mediapart claimed it had accessed an internal document of Dassault Aviation showing that the joint venture with Reliance Defence was an “obligatory trade-off” and “mandatory” for the Rs 59,000 crore deal.
Countering the charges, Dassault in a statement observed that its Chief Operating Officer Loik Segalen informed the Central Works Council on May 11 on the creation of the Dassault-Reliance (DRAL) joint venture in order to fulfil some of the offset commitments. Such a disclosure is essential as per the French law.
"In order to deliver some of these offsets, Dassault Aviation has decided to create a joint venture. Dassault Aviation has freely chosen to make a partnership with India’s Reliance Group. This joint-venture, Dassault Reliance Aerospace Ltd (DRAL), was created February 10, 2017," the company stated.
Julien Bouissou, the South Asia correspondent of popular French daily Le Monde, tweeted: “Please note that in France, the top management of a company has to inform the Central Works Councils (trade unions) about their strategy/important decisions. And in that case, the important decision conveyed to the Central Works Council, was the construction of a plant in India that will not create jobs for French workers. It's about French labour laws, not so much about Anil Ambani."
The French company observed that besides Reliance, it also signed contracts with BTSL, DEFSYS, Kinetic, Mahindra, Maini and Samtel as offset partners for the Rafale deal. “Other negotiations are ongoing with a hundred odd other potential partners,” it said.
While Dassault didn’t mention the volume of contracts that Reliance will get out of nearly Rs 30,000 crore offset kitty, critics like Supreme Court lawyer Prashant Bhushan claimed the Anil Ambani-led firm will corner the lions share of the contracts worth nearly Rs 21,000 crore.
The Mediapart’s latest revelation came as Defence Minister Nirmala Sitharaman left for France where she would meet the French defence minister for bilateral talks and also have discussions with Dassault officials on the production of 36 Rafale jets that India has purchased.
The mega defence deal has triggered a huge political controversy in the run-up to the 2019 Parliamentary election with principal Opposition Congress making allegations of corruption and crony capitalism.