Alleged defence middleman Sanjay Bhandari has applied for political asylum in Britain and also started a €11m (Rs 92 crore) claim against a French arms company in a French court which could jeopardise future sales of Rafale military aircraft to India, according to the British newspaper, The Daily Telegraph. The paper said it had seen the claim that Bhandari is making against Thales in a commercial court near Paris. Thales supplies the avionics equipment for Dassault Aviation’s Rafale aircraft.
Bhandari is asking the court to order Thales to pay him commission that he says he is owed, which Thales denies. In his claim against Thales, Bhandari alleges that he was hired by Thales to secure a €2.4 billion (Rs 20 crore) contract to upgrade Mirage 2000 military jets for the Indian Air Force. The contract was signed in 2011. The Telegraph states that “Mr Bhandari alleges that from 2008 he helped Thales sell the upgrade of the Mirage jets by facilitating a meeting” with a senior Indian official.
“He claims that he was due a consultancy fee of €20m (Rs 167 crore) but was only paid €9m (Rs 75 crore). Mr Bhandari alleges this was due to political factors in 2016 when he was close to the Indian Congress Party. At this time the ruling BJP party … started persecuting him, he claims. He fled to the UK where he is currently fighting extradition on unrelated matters and is claiming political asylum,” the British newspaper stated. This is the first time it has been alleged that Bhandari, who fled to Britain in 2016, has applied for political asylum in Britain.
According to the claim, Bhandari was paid by Thales via “an elaborate financial covert scheme in India and Dubai which enabled the payment of secret commissions to intermediaries. A special subsidiary called Thales Middle East & Africa is alleged to have been in charge of the deployment of these financial structures”. The claim alleges that Thales awarded offset contracts to two companies based in Bengaluru, which paid part of the sums received from Thales to a Dubai-based company called UHY Saxena Consulting, which paid fees due to Bhandari.
The fugitive arms lobbyist alleged that this was due to political factors in 2016 because he was close to the Congress Party. Bhandari has described himself in the lawsuit as a “well-known commercial intermediary involved in arms and defence in India”, who has “worked with major international defence companies to assist them in negotiating arms contracts with the Indian Ministry of Defence”.
The newspaper conjectured that the case could impact India’s future purchases of Rafale fighter jets. India is in the midst of procuring 26 twin-engine fighter jets for India’s first indigenous aircraft carrier (IAC) INS Vikrant in a deal said to be worth more than $2 billion.
The Rafale-M (marine) fighter jet arrived is being tested by the Indian Navy from its shore-based test facility in Goa. In March the Indian Navy will try out the F-18 Super Hornets supplied by Boeing in the US and then the Indian government will decide which one to order.
The timing is significant as it comes just weeks before Bhandari’s main extradition hearing starts in London on February 21. India is seeking to extradite Bhandari from London to India to face charges of tax evasion in India between April 24, 2016 and September 22, 2019. He is facing multiple other probes and court cases in India.
Extradition Sought
India has moved to the UK for his extradition for money laundering and tax evasion cases against him. A hearing in the case is due in London next month. Bhandari is currently on conditional bail in the UK awaiting the outcome of his extradition case.
Indian agencies in coordination with the Ministry of External Affairs are engaged in preparation for his extradition hearing scheduled in February.
A joint team of the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) is engaged in preparing documents with foolproof evidence that could help both the agencies to put forth their case during Bhandari’s extradition hearing pending in the UK.
Both the agencies have engaged Joint Director level officers who in coordination with the investigating officers have expedited the process to gather documents linked to the case.
Bhandari received over Rs 400 crore
Sanjay Bhandari allegedly received payments worth over Rs 400 crore from foreign companies in connection with weapons deals conducted during the UPA regime, records from transactions conducted in several firms in Dubai reveal.
The bank records, which are available with investigative agencies, indicate that a bulk of the money (Rs 328 crore) was transferred by Switzerland-based Piltaus Aircraft Limited, which had been awarded a deal to supply trainer aircraft for the Indian Air Force, under a questionable procurement process even after alarm bells had been rung on serious lapses in the selection.
The Swiss firm Pilatus was banned from doing any business with the defence ministry in 2019, following the registration of formal cases by the Central Bureau of Investigation (CBI) into charges that corrupt practices were used by the company. The Rs 2,800-crore deal for trainer aircraft was signed in 2012.
According to the records, Bhandari received Rs 328 crore in three different companies registered in Dubai from Pilatus, with the payments starting in July 2011 and continuing till September 2015. The arms agent, who was raided by the Income Tax department in 2015 fled to London the following year with investigative agencies probing several major deals allegedly facilitated by him during the UPA regime.
Bhandari has also been charged under the Official Secrets Act (OSA) after classified documents were found at his residence during raids in 2016. Bhandari’s firms in UAE, Offset Solutions India FZC, allegedly received at least Rs 3.47 crore from France based Thales International, which has supplied a range of products to the Indian armed forces, including major components for upgradation of the Mirage 2000 fighter fleet in 2011. The deal was valued at E2.4 billion.
As per the records, these payments were made in several tranches between September 2010 and June 2012.
The records also show payments worth Rs 70 crore from a South Korean firm to bank accounts controlled by Bhandari in Dubai, allegedly for facilitating a deal with ONGC in 2009.
Proximity to Congress Party
Bhandari, considered close to Congress leader Rahul Gandhi’s brother-in-law Robert Vadra, had fled India in 2016 following raids at his residence for allegedly possessing classified information on the country’s defence purchases. He was later charged under the Official Secrets Act.
Bhandari had purportedly received a kickback of Rs 328 crore in connection with the Pilatus Aircraft deal. He has also been linked to several other business agreements, including the ONGC deal.
Between 2010 and 2012, more than Rs 3.47 crore had been transferred by Thales International, the Middle East into a bank account that is believed to belong to the fugitive defence middleman in conjunction with another defence deal relating to aviation products. The company named in the accessed documents is Offset India Solutions – of which Bhandari is a director.
The Enforcement Directorate had conducted raids on HL Pahwa in May 2017 which linked a land deal connection with the Gandhi family and HL Pahwa who was funded by one CC Thampi, who has close financial links to Sanjay Bhandari. From files seized by the ED during raids at HL Pahwa office the link was established and it needed further probe.
In August 2020, ED had raided 14 locations related to Bhandari in connection to the Pilatus aircraft scam.
Bhandari is also under the scanner of the CBI as well for allegedly purchasing Benami properties for Robert Vadra, the son-in-law of Congress president Sonia Gandhi.
CBI’s inquiry had found that Bhandari’s company had received the kickback amount through his Singapore-based bank account in 2009. From there the money was laundered to Bhandari’s company in Dubai and then, it was allegedly used to purchase properties in London. It is notable here that the ED has already stated in open court that Bhandari was acting on behalf of Robert Vadra for the purchase of properties in London.
Thales’ Denial
Thales denies the claims, saying it never hired Bhandari and does not use middlemen.
Thales told The Times of India, “Mr Bhandari filed a petition against Thales SA in a commercial court in June 2021 for the settlement of sums allegedly due to him on an aeronautical modernisation project. Thales firmly denies the claims by Mr Sanjay Bhandari regarding the sums allegedly due or any other payments to him by Thales SA. Thales has never signed a contract with Mr Bhandari or his companies in connection with this project. Thales complies with the law and applies a zero tolerance policy on corruption and influence peddling. The group’s integrity programme is regularly evaluated and amended to reflect changes in applicable legislation and best practices.”
