Watch | Potential Conflict of Interest Over Rafale Deal Offsets?

Investigation by The Quint and Brut India finds that brother of senior MoD official is a consultant for Reliance.

(Photo: Shruthi Mathur/The Quint)

Brut India and The Quint partnered to investigate a link between the Ministry of Defence and Anil Ambani’s Reliance group, that could have serious implications for the process to be followed for the Rafale deal offsets.

The link arises out of the relationship between two senior officers in the Defence Accounts Department and a consultant for Reliance’s defence companies, Shantanu Sukul. Shantanu’s brother Prashant Sukul is the Additional Controller General of Defence Accounts, and Prashant’s wife Madhulika Sukul is the Controller General of Defence Accounts (CGDA) and was also recently appointed as Financial Adviser (Defence Services).

The office of the CGDA handles audits and payments relating to the Armed Forces, and is under the administrative control of the Financial Adviser. Crucially, the CGDA is also supposed to audit the performance of the offset contracts that are required under the Rafale deal.

As is well known, Reliance is looking to be a major offset partner for Dassault and the other French companies, and has already set up joint ventures with Dassault and Thales for this purpose.

Shantanu Sukul’s involvement with the Reliance defence companies created a serious potential conflict of interest, since the contracts these companies were trying to secure were going to be reviewed and assessed by the CGDA, in which his brother and sister-in-law were employed.

It should be made clear that this is not an attempt to allege that any wrongdoing has taken place. However, the situation as it stands gives rise to the possibility that the process could be influenced, which would be a violation of Rule 4(3) of the Central Civil Service (Conduct) Rules 1964, which prohibits bureaucrats from working on matters in which a family member has an interest.

You can read the full story here.

You can also read Prashant Sukul’s response to our questions to him below. The arguments raised in this response have been addressed in the full story.

Prashant Sukul’s Response

I have gone through the contents of your questionnaire. Do note that in most of the period from 2006 onwards, I have been solely in the civil aviation sector in various appointments and was India’s representative to ICAO in Montreal Canada. I only rejoined the defence sector on my return in 2016. My wife has mostly been in the Finance Ministry from 1995 -2014 and then was on 2 years study leave. After this she was posted in the consumer affairs ministry until February 2018. So there can be no question of any disclosure relating to conflict of interest until then because none of these assignments has anything to do with Rafale or Reliance.

I am still Addl CGDA and have nothing to do with Rafale/Reliance in my present job. My wife who is now FA defence services, upon joining in Sep 2018 had intimated the conflict of interest in that job to the government on the 19th Sep 2018. In that intimation she has recused herself from all dealings with Reliance because by then Shantanu Sukul has not yet resigned from his position. Shantanu resignation was accepted on the 30th Sep 2018.

Although Shantanu has resigned his position from Reliance, my wife continues to recuse herself from all Reliance matters until today.

I, thus, do not see any necessity for your story even if it presents these facts. It will still damage our reputation and we will have to take legal recourse in that event. It sensationalises an occurrence that did never take place. As regards Mr Sule we are completely unaware of the position.

We reached out to the Ministry of Defence, Madhulika Sukul, Prashant Sukul, Shantanu Sukul and Reliance for responses to the questions raised by this story, more than 24 hours before its publication. We only received a response from Prashant Sukul which has been reproduced in its entirety above. We are expecting a formal response from Shantanu Sukul shortly, but have received no responses from the others till now, and will update the story with their responses as and when we receive them.

(This story has been published as part of an investigation by The Quint and Brut India)