Madhulika P Sukul and Prashant Narain Sukul have been transferred from their respective positions at the Ministry of Defence after an exclusive report done by The Quint and Brut India pointed to a potential conflict of interest involving the husband-wife duo over the Rafale offsets.
In a story published on 23 November 2018, The Quint and Brut India had reported that the appointment of Madhulika P Sukul as the Controller General of Defence Accounts in the Ministry of Defence in February 2018 and Prashant Narain Sukul's appointment as the Additional Controller General of Defence Accounts (Addl CGDA) in June 2016 was a possible conflict of interest, since Prashant's brother Shantanu Sukul had been working for Anil Ambani’s Reliance defence group since 2015. Madhulika P Sukul was also the Financial Advisor (Defence Services). The full report can be accessed here.
A notice dated 20 December 2018 by the Ministry of Personnel, Public Grievances and Pension, was the news of the transfer of both Madhulika P Sukul and Prashant Narain Sukul. As mentioned in the notice below, Madhulika Sukul will take charge as the new Secretary, Central Information Commission (CIC) and Prashant Narain Sukul has been appointed as the Secretary, National Commission for Minorities.
Why Is This Transfer Significant?
The transfer is significant because of the role of CGDA in auditing all the transactions under defence contracts, including offsets in the Rafale deal. In early 2015, Anil Ambani's Reliance defence companies were mostly incorporated or acquired and have previously been involved in government defence contracts. In the Rafale deal, Reliance is attempting to secure contracts to fulfill the offset obligations under the deal.
Manufacturers of the Rafale aircraft and its components have to plough back half of the price of the deal into offset contracts to be performed in India. As part of this trade-off, the government has to scrutinise the contracts to see if they’re genuine, and if there is anything irregular about them. This is where the CGDA comes in, and where the possibility of conflict of interest between Madhulika Sukul- Prashant Narain Sukul and Shantanu Sukul becomes clearer.
CGDA audits all the transactions under the offset contracts and their reports will also decide penalties or credits for the companies, including Reliance. In this scenario, the presence of Madhulika Sukul and Prashant Narain Sukul in the CGDA in the Ministry of Defence could influence the award of the offset contracts under the Rafale deal.
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