News Top German minister tried to get defence firm off the blacklist, Modi govt didn’t budge


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Dec 4, 2017
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Gun maker Rheinmetall also allegedly paid controversial arms agent Abhishek Verma to get it off the hook, was misled by an undisclosed Indian industrial group.

New Delhi: A top German politician tried to intervene on behalf of tainted defence company Rheinmetall to get it off an Indian corruption blacklist. But the attempt was thwarted by the NDA government, a joint investigation by ThePrint and German media partners has found.

Sigmar Gabriel, who is currently Germany’s foreign minister, actively backed efforts by Rheinmetall for diplomatic lobbying with India during bilateral visits after the Narendra Modi government came to power in 2014, internal documents and official notes accessed by ThePrint, Stern Magazine and ARD’s Report Munich show.

Rheinmetall, whose group is headquartered in Dusseldorf, makes air defence guns, radars, fire control systems and ammunition. It got into trouble with the Indian government in 2009, first by filing a court case against the government, and later hiring lobbyists to campaign for it, resulting in the company being blacklisted in 2012 for 10 years.

Rheinmetall has maintained that it has done no wrong and has been trying get off the blacklist.

Gabriel’s intervention
In this effort, the company was helped by Gabriel when he was the minister of economic affairs in 2014, according to a series of internal notes exchanged between the German embassy in India and the economic ministry in Berlin, ThePrint and its partners have found.

One internal note gives the background of the case against Rheinmetall by India’s Central Bureau of Investigation and “admits” to the company hiring controversial Indian arms agent Abhishek Verma to get it off the blacklist.

“In order to get off the blacklist, Mr Bodo Garbe, now a member of the executive board of Rheinmetall AG got a middleman Abhishek Verma (and paid) $ 500,000 without a contractual basis,” a note sent on 17 November 2014 by the Defence Technical Attache at the German embassy reads.

The CBI case against the company and Verma hinges on this very argument. While the CBI case was dismissed by a lower court last year on account of lack of supporting evidence, the matter is currently being heard by the Delhi High Court, with the next hearing scheduled for April.

“I always had faith in the Indian judiciary, who saw through this false case foisted upon us and discharged us from the case in April 2017,” Verma said in response to joint queries by ThePrint and its German media partners.

Rheinmetall also reached out to Gabriel, who in turn roped in his juniors for assistance during the next round of bilateral talks between New Delhi and Berlin.

Accordingly, parliamentary state secretary Uwe Beckmeyer from the ministry of economic affairs pushed the case of the defence firm with Indian defence secretary R.K. Mathur during a visit to India in February 2015, but the request was turned down by the Indian side.

Sources said that suggestions were made during the meeting to meet with top representatives from the German company, including its CEO Armin Papperger, but were rejected as Rheinmetall was barred from doing any business in India.

It is believed that the advice given was to follow the procedure by applying for relief as and when the new blacklisting policy would be promulgated by India.

Misled by undisclosed Indian industrial group
Documents accessed by ThePrint and its partners also show that the German company took advice from Indian ‘industrial sources’ on getting off the official blacklist. The Indian ‘partner’ suggested that then-defence minister Manohar Parrikar would be open to a meeting with the Rheinmetall management to sort out the issue, a communication to then German ambassador Michael Steiner from Berlin reveals.

The 29 January 2015 note by Beckmeyer says “I have received indication that the Indian minister of defence, Mr Manohar Parrikar, is interested in a meeting with the management board of the company about the blacklisting. Rheinmetall AG bases its information on indications from an Indian industrial group, which have been considered to be quite reliable.”

However, as it turned out, Parrikar did not meet with any representative from the German company, which is thought to have been misled by its Indian industrial partner. Rheinmetall never publicly revealed which Indian private sector company it was working with for an entry into the ‘Make in India’ initiative.

In 2016, Rheinmetall wrote to the Indian defence ministry seeking relief under a new blacklisting policy. But India has not responded to the request. Sources say that Rheinmetall’s India operations have now been wound down to minimum levels as it has become clear that little relief is expected till the blacklisting period gets over.

‘No reason for blacklisting’
Responding to questions from ThePrint and its partners, Rheinmetall said it did not do anything wrong or illegal in India, and does not see any valid reason for its blacklisting.

“There is no justification for the blacklisting from 2012. Accusations of misconduct are rejected. That is why we took legal action against the blacklisting. This is still pending at the Delhi High Court,” a spokesperson from Rheinmetall HQ said.

“The Indian authorities did not inform Rheinmetall in detail about the basics of the allegations or showed evidence. Neither Rheinmetall nor any employee was charged in the OFB case that led to the blacklisting,” the spokesperson said, and added that further comments were not possible because of the ongoing legal process.

The OFB case refers to alleged bribes paid to the public sector Ordnance Factory Board for purchase of air defence guns in 2009.

‘Incredible scandal’
The revelation that a top German politician tried to intervene on behalf of a tainted company is expected to kick up a storm with Left-wing German MP Kathrin Vogler terming the activities as “shocking”.

“On the one hand, Germany is telling other countries how they have to fight against corruption. On the other hand, the German government is trying to interfere in the anti-corruption procedures of another country in favour of a German company that obviously violated the law,” Vogler from The Left Party (Die Linke) told ThePrint and its partners.

“This is an incredible scandal. The German government is undermining its own credibility when it comes to the international fight against corruption,” she said.


Top German minister tried to get defence firm off the blacklist, Modi govt didn’t budge