France’s DCNS says India submarine data leak may be ‘economic warfare’

August 25, 2016 in International

submarie-1French naval contractor DCNS said on Wednesday it may have been the victim of “economic warfare” after secrets about its Scorpene submarines being built in India were leaked.

India opened an investigation after The Australian newspaper published documents relating to the submarine’s combat capabilities, raising concerns over another major contract with Australia.

The leak contains more than 22,000 pages outlining the details of six submarines that DCNS has designed for the Indian Navy.

“I understand there has been a case of hacking,” Indian Defence Minister Manohar Parrikar told reporters. “We will find out what has happened.”

The submarines are being built at a state-run shipyard in Mumbai and the first one was expected to go into service by the end of the year, the first step in the Indian navy’s effort to rebuild its dwindling fleet.

The leak has raised doubts about the security of DCNS’s submarine project in Australia where it is locked in exclusive negotiations after seeing off rivals for a A$50 billion ($38 billion) contract to build the Barracuda next generation of submarines.

DCNS, which is 35 percent owned by Thales (TCFP.PA), said it was working to determine if any harm had been caused to clients with a view to drawing up an action plan.

Asked if the leak could affect other contracts, a company spokeswoman said it had come against a difficult commercial backdrop and that corporate espionage could be to blame.

“Competition is getting tougher and tougher, and all means can be used in this context,” she said. “There is India, Australia and other prospects, and other countries could raise legitimate questions over DCNS. It’s part of the tools in economic warfare.”

DCNS, which is also vying for submarine contracts in Norway and Poland, beat Germany’s ThyssenKrupp AG (TKAG.DE) and a Japanese-government backed bid by Mitsubishi Heavy Industries (7011.T) and Kawasaki Heavy Industries (7012.T) in Australia.

That was a major blow to Japanese Prime Minister Shinzo Abe’s push to develop defense export capabilities as part of a more muscular security agenda.

The leaked documents cover the Scorpene-class model and do not contain any details of the vessel currently being designed for the Australian fleet.

Thales (TCFP.PA), whose shares fell 3 percent before paring back some of the losses, declined to comment.