All you need to know about what’s going down between Reliance and Congress-owned National Herald

By Prarthana Mitra

As controversy over the Indo-French defence agreement continues, the Reliance Group has brought a Rs 5000 crore defamation suit against Congress-owned National Herald for a “libellous and derogatory” article titled “Anil Ambani floated Reliance Defence 10 days before Modi announced Rafale Deal.”

Rafale and the Reliance connect

The accusation is rooted in certain alarming and inexplicable decisions made by the Centre before the deal was finalised in 2015, regarding the metamorphic nature and contents of the deal, the total inclusive cost of building a Rafale fighter jet, and over booting out Hindustan Aeronautics Limited (HAL) from the project. The most baffling question right now concerns the mysterious timing of Reliance Defence’s foundation and entry as a stakeholder.

On April 10, 2015, the government signed off on a deal with the French government to purchase 36 of the 126 Rafale fighter jets, just days after Reliance Defence entered the fold and was tasked with the building the remaining jets along with Dassault. According to The Wire, Reliance is to hold 51% of the equity and Dassault, 49%. This brand new company is the one that has been assigned 70% of the offset benefits – that is, orders worth Rs 21,000 crore out of a total offset liability of Rs 30,000 crore.

What did Ambani say?

According to Reliance Infrastructure, Ambani wrote a letter to Rahul Gandhi earlier this month, expressing deep anguish over the latter’s “baseless, ill-informed and unfortunate” accusations in the parliament.

Reliance Defence was not to take part in the manufacturing process, clarified a press release, adding that their jurisdiction extended to defence offset exports based on a work-share agreement. All 36 jets would be 100% French-manufactured, thus rendering Reliance’s inexperience in aircraft manufacture a moot point.

When was Reliance Defence set up?

Last week, Ambani expressly denied Gandhi’s allegations that Reliance Defence was set up ten days before the new deal was sanctioned, which according to confirmed reports and expert opinions, is a much more expensive deal than the one initially agreed upon. He had even sent “cease and desist” notices to several Congress leaders, to check their campaign.

Calling Gandhi’s speculation “factually incorrect”, Ambani attempts to rectify it, saying that the group’s decision to venture into defence infrastructure was on the table since December 2014. “In February, we informed the stock exchange of the companies we had incorporated,” he said.

What does the suit allege?

The civil defamation suit filed by Reliance Defence, Reliance Infrastructure and Reliance Aerostructure, now alleges that National Herald publisher Associated Journals Limited, Editor-in-Charge Zafar Agha, and author of the article Vishwadeepak, have conveyed a negative image that “misleads the general public to believe that undue business favours are being extended to them by the government of the day”.

According to the petition, the article makes unfounded assumptions that “adversely affects the public perception”, causing “considerable damage” to the plaintiff firms.

The suit was filed on Friday in the court of city civil and sessions judge P.J. Tamakuwala, who issued notices to the respondents and sought replies by September 7.

Prarthana Mitra is a staff writer at Qrius