Thales, a French multinational defence firm, is now facing a bribery probe from French prosecutors over allegations related to a contract to modernise the Indian Air Force’s (IAF) Dassault Mirage 2000 planes.
Sanjay Bhandari, who claims to have assisted Thales in winning the $2.5 billion contract in 2011, has made the accusations, with the focus of the investigation on whether the payments made to Bhandari were hidden bribes. Thales has denied any wrongdoing and highlighted that prosecutors have not yet questioned the company.
However, these allegations have not been without consequences for the company’s stock prices, with Thales’ shares dropping by 3.5% to €132.00 and Dassault Aviation, which owns a 25% stake in Thales, falling by 2.6% to €168.10 (as of 5 May 2023, 3:11 PM in Paris); Share prices have since stabilised.
This development comes at a challenging time for Thales, which has already faced difficulties, including a cyberattack in 2019 that led to the theft of sensitive data and the impact of the Covid-19 pandemic on its business.
Moreover, Thales is already under investigation for complicity in the active corruption of a foreign agent related to a corruption probe linked to the 2002 sale of submarines to Malaysia. The company denied the allegations and has requested the Paris Appeals Court to cancel the probe.
The fallout from the current bribery investigation could have significant financial and reputational consequences for Thales, a company that emphasises compliance with the law and a zero-tolerance policy on corruption and influence peddling.
Bhandari, the alleged defence middleman, has filed for political asylum in Britain following his €11 million claim against Thales. Bhandari claims that Thales owes him a commission for helping to secure a €2.4 billion contract to upgrade the IAF’s Mirage 2000s. Thales, on the other hand, denies having signed a contract with Bhandari or his companies in connection with the project.
Meanwhile, Bhandari has accused the ruling Bharatiya Janata Party (BJP) of persecuting him, seemingly for his association with the opposition. These allegations of corruption and illicit financial practices add to the challenges facing Thales, which has recently faced multiple headwinds over its business practices.
Nevertheless, Thales maintains that its integrity programme is regularly evaluated and updated to reflect changes in applicable legislation and best practices. The company complies with the law and has a zero-tolerance policy on corruption and influence peddling.