Michel Sapin

French Magistrate Seeks India’s Cooperation in Rafale Corruption Probe: Report

French news site also reveals letter Anil Ambani sent Macron and France’s finance minister after Narendra Modi’s 2015 Paris visit, seeking reduction in €151 million tax bill.

New Delhi: Days ahead of Prime Minister Narendra Modi’s visit to France, the French news portal Mediapart has revealed that Paris magistrates have sent an official request to the Indian government seeking its cooperation with an ongoing investigation into payments allegedly made in India by Dassault Aviation as part of the 2015-16 deal for the sale of 36 Rafale fighter jets.

“The magistrates are notably interested in studying the case files of two Indian investigations which, as Mediapart has previously revealed, detail evidence that Dassault secretly paid several million euros to Indian based business intermediary Sushen Gupta in its attempts to secure the deal signed in 2016,” the report, written by Yann Phillipin, says.

It is not immediately known what the Indian response will be. Requests of this kind are usually channeled through the external affairs ministry and taken up by the concerned department in India – in this case most likely the Department of Personnel and Training (DOPT) and Ministry of Finance, which look after the Central Bureau of Investigation and Enforcement Directorate respectively.

The Wire has written to the Indian embassy in Paris seeking information on the status of the French request and this story will be updated when a reply is received.

Gupta is currently the subject of a money laundering investigation by the ED in the VVIP chopper scam. Reports published by Mediapart in 2021 exposed Gupta’s deep business connections to Dassault and Thales over a 15-year period, which allegedly involved paying him “several million euros in secret commissions to offshore accounts and shell companies” using inflated invoices for software consulting.

Today’s explosive Mediapart story also looks at another part of the Rafale puzzle – the tax reduction Reliance Group billionaire Anil Ambani secured from France in 2015.

Mediapart reveals how Ambani wrote to French economics minister (and now president) Emmanuel Macron and finance minister Michel Sapin, requesting their personal intervention to reduce a €151 million tax bill.

What Anil Ambani eventually was asked to pay was a greatly reduced amount, € 6.6 million, the report says – a sum that was close to the amount the Indian businessman had proposed as a settlement with the tax authorities.

Ambani was with Modi in France in 2015, during the visit where the prime minister decided to scrap an earlier deal for co-production of 126 Rafales with Hindustan Aeronautics Ltd with one for the outright purchase of 36 aircraft from the French manufacturer Dassault.

Mediapart found evidence of Ambani’s letter in confidential documents gathered by France’s tax administration. Its sources said that some of these have been added to evidence collected in the French judicial investigation into the corruption allegations surrounding the 2016 sale of 36 Rafale fighter jets to India.

Ambani was brought into the deal as Rafale’s partner because that is what the Modi government had insisted on, former French president François Hollande revealed in a 2018 interview. Dassault Aviation and Reliance have denied this and the Indian government said at the time that it had no say in the ‘commercial decision’ taken by the French company. The Indian Supreme Court refused to order a probe but the deal is the subject of a current criminal investigation in France.

The Indian Air Force’s Rafale jets will participate in the Bastille Day military parade on July 14, in which Modi is a guest of honour – a decision that has been criticised by quarters in France who have cited the downslide of human rights in Modi’s India.

Macron role raises eyebrows

The Mediapart report says that as the Rafale deal – of which Reliance would be the main beneficiary in India – was being worked out during 2015, Anil Ambani’s Flag Atlantic France was granted a € 144-million tax reduction. This action came after he wrote to ministers Sapin and Macron on April 14, 2015.

While Sapin was finance minister and had direct control over the tax department, the report highlights that “Macron’s involvement raises questions because, at the time, he had no authority over the public finances directorate, the Direction Générale des Finances Publiques (DGFIP).”

This tax reduction was first reported by French daily Le Monde, which had further quoted an unnamed Reliance employee as having said that he and Anil Ambani had met Macron at his office, “where the tax problem was settled in a phone call to his administration”.

Macron and his office have not directly addressed questions on this. Macron’s former advisors at the economy ministry had told Le Monde that they had no recollection of a meeting between him and Ambani.

Sapin also told Mediapart that he had “no recollection” of Ambani’s letter. “The only possible thing that my cabinet may have done is to transfer the correspondence to the DGFIP for [their] study,” he told Mediapart.

The report highlights how Reliance Flag Atlantic France, which operated a cross-Atlantic underwater telecommunications cable linking France and the US, drew the French tax inspection directorate’s attention with its alleged tax evasion and avoidance practices.

Reliance artificially transferred the profits from its French subsidiary to the mother company of its telecommunications activities, Reliance Globalcom Limited, which is registered in Bermuda, the British overseas territory which until recently featured on the European Union’s blacklist of non-cooperative tax havens, the report said.

Anil Ambani’s ‘trump card’

French tax authorities pored over detailed documents on Reliance Flag Atlantic France’s internal operations to determine that it owed them € 151 million in taxes and penalties for the 2008-2012 period. This amount is high largely thanks to a taxing strategy. As an expert told Mediapart: “The tax authorities come up with [this] atomic weapon to push the company into providing the documents and reach an amicable settlement. It is therefore normal that there is a very steep reduction of the tax due if the company finally plays the game.”

By the end of 2014, Reliance provided documents and in early 2015 proposed that it pay € 6.2 million. French authorities said this was too little.

“But Ambani had a trump card to play,” the report said.

In March 2015, Reliance secretly became designated as Dassault’s new principal Indian local partner in the as-yet unsigned Rafale contract, undoing the Indian government-owned HAL’s appointment in this role three years ago.

A month later, in April 2015, Modi visited France with Anil Ambani. Thus, Mediapart notes: “In all probability, with the Rafale deal still not inked, the French authorities would have been cautious not to upset Ambani, whose group was appointed as Dassault’s new principal partner by Modi’s government, as François Hollande confirmed in a previous interview with Mediapart, adding that France “didn’t have the choice” in the matter. The Indian government, Reliance and Dassault all denied the former French president’s version of events.”

Anil Ambani’s letter, dated April 14, 2015, named Modi. “I am pleased with the strong momentum of bilateral exchanges between our governments led personally by Visionary Prime Minister of India, Mr. Narendra Modi during his visit to France on 10 and 11th April 2015,” it began.

In it, Anil Ambani also said that he was put in an “extreme and unreasonable situation” with the tax amount. “It is requested that the matter may kindly be reviewed in a fair, reasonable and transparent manner, and the highly unjust and unfair tax demands proposed as above may kindly be quashed, to give reassurance to Indian investors like Reliance that they will not be subjected to unnecessary tax litigation and high-pitched demands,” he added.

Tax deal struck in a week

The reaction to Anil’s letter was swift, as according to the report, on April 20, 2015, the central directorate of the tax inspection services wrote to its regional office asking for a copy of the Reliance case file “following the written request by the company (Indian CEO) made directly to the minister”, which was a reference to Sapin. The documents were sent the very same day.

The report says that the next day, the head of Ambani’s other French subsidiary, Reliance France, wrote to Sapin, with copies sent to Macron, Ambani and also India’s ambassador.

“I am pleased to inform you that an agreement has been reached on the terms of a settlement with the French Tax Authorities […] and that, in our opinion, this represents an equitable and appropriate settlement in all the circumstances,” she wrote, adding: “We have been requested by Mr. Anil Ambani to advise you that (a) we do not require any further assistance from your department and (b) the request set out in his letter of April 14, 2015 is hereby withdrawn.”

She also concluded by thanking Sapin “for your time and attention to this matter”.

By October 2022, the matter was resolved with Reliance’s deal with tax services formally signed.

While Mediapart’s source at the economy and finance ministry told the outlet that Ambani’s letter “had no effect on the final settlement,” experts consulted by the reporter pointed out that while the reduction may be justifiable, the fact that no penalties were imposed on the debt – thus affecting a gain of around 1 million euros – pointed to favourable treatment. Further, Reliance was deemed as having acted in “good faith” – something that experts said were odd given that it used a “structure of aggressive tax optimisation in a tax haven.”

Men and the Conspiracy of Silence Around Sexism

“Liberal” and “progressive” men who do not voice their disagreement with sexist acts are just as implicated in the culture of perpetuating institutional sexism.

“Liberal” and “progressive” men who do not voice their disagreement with sexist acts are just as implicated in the culture of perpetuating systemic sexism.

IMF chief Christine Lagarde, one of the authors of the op-ed demanding an end to impunity for sexist men. Credit: Reuters

Former ministers in France have recently launched an attack on sexism in politics. The group consists only of women and includes current IMF chief Christine Lagarde. The women presented their collective voice in an op-ed in a French weekly, Journal Du Dimanche. Despite their political differences, they unanimously agreed on one thing: sexism simply has no place in any society. “Like all women who reached circles that were once exclusively masculine, we have been forced to fight against sexism. It’s not for women to adapt in these circles; it’s the behaviour of certain men that must change. It’s enough. The immunity has finished. We will no longer shut up,” the article said. This bold move is refreshing in the arena of politics, where successful women are usually expected to tolerate what has been described as “casual sexism”. These range from casual jokes to an institutional and systemic sexism that assumes that an all-male political establishment or absence of women at the upper echelons of power is simply normal. The demand for more visibility and presence is regarded as favour rather than an entitlement or right.

Different forms of sexism

Casual or everyday sexism is subtle and more difficult to tackle than explicit sexual coercion, blatant bigotry or overt forms of sexual harassment. It is the experience of more indirect forms of discrimination on a daily basis that women are expected to tolerate – it includes subtle everyday slights and gendered expectations in the workplace, where women are expected to perform maternal or domestic tasks. And yet it is equally humiliating, subordinating and infuriating. What is most evident is that actions to counter it, it seems, must always be taken by women – though in India there are no signs of women in the political establishment coming together on any shared platform regarding sexism. But what is more troubling is that despite the presence of liberal men in positions of power and in nearly every profession, there is no sense of responsibility that they need to take any affirmative action to call out other men on their behaviour or to take the lead in bringing about the requisite institutional reform that can produce positive change. When measures are adopted in the name of women’s rights, these are invariably protectionist, implemented most often as a reaction to a particularly appalling event or act of sexual violence, or as a cultural intervention to restore women to a position of “honour and respect” that they enjoyed in some mythical past. This is not the recipe for increased respect or freedom for women. Safety and security measures have almost nothing to do with gender equality, which is a right, not a privilege. And culture has become a stultifying edifice invoked by those who seek to safeguard their own privileges and positions of power.

France’s female politicians have taken an important step in encouraging all victims of sexism, sexual harassment and sexual aggression to speak out and complain. The fact that Lagarde has lent her support to this opposition to rampant and pervasive sexism is particularly significant in light of the disgraceful behaviour of her predecessor, Dominique Strauss-Kahn, who was forced to resign after he allegedly attempted to rape a hotel employee in New York. And it follows on the heels of complaints by nine women accusing the deputy speaker of the French national assembly, Denis Baupin, of sexual harassment as well as the admission by French finance minister Michel Sapin of inappropriate behaviour towards a female journalist.

Need for men’s intervention

In India, the focus on sexual violence and criminal law has almost completely overshadowed the ways in which sexism is pervasive, institutionalised and experienced by almost every single woman across religion, ethnicity and caste in this country, though the experience is intensified because of these differences. It exists on university campuses and in the workplace, within the political arena including the Lok Sabha and Rajya Sabha, as well as in the public and private sector. The fact that many women do not speak out is partly out of fear of damaging their careers or losing their jobs.

But what is so egregious is the absolute silence amongst men – even those who claim to be liberal, progressive men – who either fail to provide a supportive environment or remain complicit in the silence. They may be fully aware that their colleague – a fellow doctor, professor or senior counsel – has indulged in these offensive and humiliating practices. These men are as implicated in the culture of sustaining and perpetuating institutional and systemic sexism where “respectable” senior colleagues in the legal profession, medical profession as well as academia are exonerated for what under any circumstances would be deemed as offensive, disgraceful and shameful behaviour. Without this support it is left to women to either organise against it or to simply adapt to it. Sexism flourishes not simply because some men get away with it. It flourishes because most men refuse to call out their colleagues, friends and family for indulging in it. Sexism is not exclusively a woman’s problem. It is first and foremost a problem of complicity amongst men. Sexism is widespread, persistent and insidious discrimination that will not be repaired through more laws or sexual harassment policies.

Women who refuse to participate in this culture of silence or decide to complain pay a heavy price. It remains appalling that in the 21st century women continue to have to fight for their humanity – the very right to be treated as humans who are entitled to dignity and respect. Yet it is also simply impossible for women to bring about this change on their own. It requires a conscious exercise of male privilege in a direction that makes them better human beings who are respected rather than feared, who do not find their masculinity in the humiliation of women or refuse to speak against such behaviour. It requires an attitudinal change that must be brought about by men and not just women, who are in positions of power. Men need to become role models in demonstrating respectful treatment towards women as fellow colleagues rather than as worshipped maternal figures or their personal domestic help in the workplace. These are men who do not find the validation of their masculinity in denigrating women or accepting that they are hardwired to harass women. It is a performance of masculinity that earns its respect through finding such male behaviour unacceptable and intolerable, from those who are determined to challenge and change it.

The French politicians have demanded an end to male impunity, for men to change their behaviour and be called out on it if they don’t. The op-ed concluded: “It cannot be said by a colleague that a woman, whatever her status, whether she be an employee, student, unemployed, housewife or elected representative ‘apart from her magnificent breasts, what’s she like?’ It cannot be said with a grave voice, ‘your skirt is too long, you should shorten it’ or ‘are you wearing a thong? And when a woman says no, it’s no’. Women have had enough. When will men also feel that they are no longer prepared to put up with such treatment of women any more and initiate similar campaigns to make public spaces respectful and welcoming for women? How long will the liberal man stay silent and remain complicit?”

Ratna Kapur is a professor at Jindal Global Law School.

Top European Powers Join Forces to Clamp Down on Tax Evasion

Responding to the Panama Papers revelations, countries have agreed to share detailed data on the ownership of companies, trusts and foundations.

An activist shows fake banknotes during a demonstration outside the European Commission (EC) headquarters ahead of statements by the EC on the effectiveness of existing measures against tax evasion and money-laundering in light of the recent Panama Paper revelations, in Brussels, Belgium, April 12, 2016. REUTERS/Yves Herman

Washington: Europe’s biggest nations launched a joint scheme on Thursday to clamp down on tax evasion and corruption, responding to revelations of the rich and powerful stashing money in far-away tax havens in the so-called Panama Papers.

“In the future, nobody should be able to hide behind complex legal structures,” German Finance Minister Wolfgang Schaeuble said as he unveiled the initiative. “Fighting tax evasion requires a global response.”

The leak of thousands of confidential documents from a Panamanian law firm earlier this month has had political repercussions in many countries, forcing Iceland’s prime minister to quit and putting British Prime Minister David Cameron under pressure over his family’s financial affairs.

Britain, Germany, France, Italy and Spain agreed to share detailed data on the ownership of companies, trusts and foundations, making it more difficult for actual owners to hide their wealth and income from tax authorities.

“Britain will work with our major European partners to find out who really owns the secretive shell companies and the trusts that have been used as conduits for evading tax and laundering money and benefiting from corruption,” British Finance Minister George Osborne said.

Unveiling their proposals alongside IMF Managing Director Christine Lagarde and OECD Chief José Ángel Gurría, the five nations committed to establishing a register to detail the beneficial owners of companies, trusts, foundations, and shell companies, making it available for tax administration and law enforcement authorities.

French Finance Minister Michel Sapin said the joint effort should be followed by even tougher measures against countries that will not comply. “We have to speed up and we have to implement and we have to have the proper sanctions against those countries that would not join the international consensus,” he said.

The OECD has for years criticised Panama for its refusal to join the global push for transparency but its government appears to have taken heed of the backlash, announcing on Thursday that its commitment to financial transparency was “irreversible”.

“We need much stronger international tax cooperation. A lot of things have gone global, and it’s unlikely to recede,” Lagarde said.

In their first step, the five European nationals will launch a pilot initiative for automatic exchange of information on beneficial ownership and hope to broaden the scheme to include other nations.

Urging a global exchange of beneficial ownership information in order to remove ‘the veil of secrecy under which criminals operate’, the ministers acknowledged cracks in the current framework and called on others to apply enhanced standards of transparency.

(Reuters)