Malaysia's submarine scandal erupts in France

Murky arms deal linked to international pattern of kickbacks

Judges in the Paris Prosecution Office have been probing a wide range of corruption charges involving similar submarine sales and the possibility of bribery and kickbacks to top officials in France, Pakistan and other countries. The Malaysian piece of the puzzle was added in two filings, on Dec. 4, 2009 and Feb. 23 this year.

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Friday, 16 April 2010 Super Admin

Written by John Berthelsen, Asia Sentinel

A potentially explosive scandal in Malaysia over the billion-dollar purchase of French submarines, a deal engineered by then-Defense Minister Najib Tun Razak, has broken out of the domestic arena with the filing of a request to investigate bribery and kickbacks from the deal in a Paris court.

Although the case has been contained for eight years in the cozy confines of Malaysia's courts and parliament, which are dominated by the ruling National Coalition, French lawyers William Bourdon, Renaud Semerdjian and Joseph Breham put an end to that when they filed it with Parisian prosecutors on behalf of the Malaysian human rights organization Suaram, which supports good-government causes.

Judges in the Paris Prosecution Office have been probing a wide range of corruption charges involving similar submarine sales and the possibility of bribery and kickbacks to top officials in France, Pakistan and other countries. The Malaysian piece of the puzzle was added in two filings, on Dec. 4, 2009 and Feb. 23 this year.

For two years, Parisian prosecutors, led by investigating judges Francoise Besset Francoise Besset and Jean-Christophe Hullin, have been gingerly investigating allegations involving senior French political figures and the sales of submarines and other weaponry to governments all over the world. French news reports have said the prosecutors have backed away from some of the most serious charges out of concern for the political fallout.

The allegations relate to one of France's biggest defense conglomerates, the state-owned shipbuilder DCN, which merged with the French electronics company Thales in 2005 to become a dominant force in the European defense industry. DCN's subsidiary Armaris is the manufacturer of Scorpene-class diesel submarines sold to India, Pakistan and Malaysia among other countries. All of the contracts, according to the lawyers acting for Suaram, a Malaysian human rights NGO, are said to be suspect.

With Najib having moved on from the defense portfolio he held when the deal was put together in 2002 to become prime minister and head of the country's largest political party, the mess has the potential to become a major liability for the government and the United Malays National Organisation. Given the power of UMNO, it is unlikely the scandal would ever get a complete airing in a Malaysian court, which is presumably why Suaram reached out to French prosecutors.

"The filings are very recent and have so far prompted a preliminary police inquiry on the financial aspects of the deal," said Philippe Vasset, the editor in chief of a Paris-based military intelligence website. "There isn't a formal investigation yet. The investigation will most likely use documents seized at DCN in the course of another investigation, focusing on bribes paid by DCN in Pakistan."

Vasset said police have confined their inquiry to bribery allegations so far and have not looked into the 2006 murder of a Mongolian woman in Malaysia who was a translator on the deal for Najib and his friend, Abdul Razak Baginda, during a visit to Paris.

There have been numerous deaths involving DCN defense sales in Taiwan and Pakistan. Prosecutors are suspicious that 11 French submarine engineers who were murdered in a 2002 bomb blast in Karachi – first thought to have been the work of Al Qaeda – were actually killed in retaliation for the fact that the French had reneged on millions of dollars in kickbacks to Pakistani military officers.

The Malaysian allegations revolve around the payment of €114 million to a Malaysia-based company called Perimekar, for support services surrounding the sale of the submarines. Perimekar was wholly owned by another company, KS Ombak Laut Sdn Bhd, which in turn was controlled by Najib's best friend, Razak Baginda, whose wife Mazalinda, a lawyer and former magistrate, was the principal shareholder, according to the French lawyers.

"Over the past years, serious cases have been investigated in France by judges involving DCN," lawyer Renaud Semerdjian told Asia Sentinel in a telephone interview. "This is not the first case of this kind that is being investigated. There are others in Pakistan and there are some issues about India. To a certain extent, every time weapons of any kind have been provided, suspicion of violation of the law may be very high."

As defense minister from 2000 to 2008, Najib commissioned a huge military buildup to upgrade Malaysia's armed forces, including two submarines from Armaris and the lease of a third, a retired French Navy Agosta-class boat. There were also Sukhoi supersonic fighter jets from Russia and millions of dollars spent on coastal patrol boats. All have come under suspicion by opposition leaders in Malaysia's parliament but UMNO has stifled any investigation. Asked personally about the cases, Najib has responded angrily and refused to reply.

Despite efforts to bury it, the case achieved considerably notoriety after the murder of Altantuya Shaariibuu, a 28-year-old Mongolian translator and Razak Baginda's jilted lover, who participated in negotiations over the purchase of the submarines. By her own admission in a letter found after her death, she was attempting to blackmail Razak Baginda for US$500,000.

She was shot in October 2006 and her body was blown up with military explosives by two bodyguards attached to Najib's office after Razak Baginda, went to Najib's chief of staff, Musa Safri, for help in keeping her away from him. Not long after being acquitted in November 2008 under questionable circumstances of participating in her murder, Razak Baginda left the country for England. The bodyguards were convicted but no motive was ever established for their actions.

The submarine deal was never brought up in court during a months-long murder trial that was marked by prosecutors, defense attorneys and the judge working studiously to keep Najib's name out of the proceedings. A private detective hired by Razak Baginda to protect him from the furious Altantuya filed a statutory declaration after the trial indicating that Najib had actually been the victim's lover and had passed her on to Razak Baginda.

The detective, P. Balasubramaniam, said later that he was unceremoniously run out of Kuala Lumpur. He eventually emerged from hiding in India to say he had been offered RM5 million (US$1.57 million) by a businessman close to Najib's wife to shut up and get out of town. He also said he had met Nazim Razak, Najib's younger brother, and was told to recant his testimony.

In the current complaint in Paris, the issue revolves around what, if anything, Razak Baginda's Perimekar company did to deserve €114 million. Zainal Abidin, the deputy defense minister at the time of the sale, told parliament that Perimekar had received the amount – 11 percent of the sale price of the submarines – for "coordination and support services." The Paris filing alleges that there were neither support nor services.

Perimekar was registered in 2001, a few months before the signing of the contracts for the sale, the Paris complaint states. The company, it said flatly, "did not have the financial resources to complete the contract." A review of the accounts in 2001 and 2002, the complaint said, "makes it an obvious fact that this corporation had absolutely no capacity, or legal means or financial ability and/or expertise to support such a contract."

"None of the directors and shareholders of Perimekar have the slightest experience in the construction, maintenance or submarine logistics," the complaint adds. "Under the terms of the contract, €114 million were related to the different stages of construction of the submarines." The apparent consideration, supposedly on the part of Perimekar, "would be per diem and Malaysian crews and accommodation costs during their training. There is therefore no link between billing steps and stages of completion of the consideration."

As Asia Sentinel reported on April 1, services for the subs are being performed by a well-connected firm called Boustead DCNS, a joint venture between BHIC Defence Technologies Sdn Bhd, a subsidiary of publicly-listed Boustead Heavy Industries Corp Bhd, and DCNS SA, a subsidiary of DCN. Boustead's Heavy Industries Division now includes Perimekar as an "associate of the Group. PSB is involved in the marketing, upgrading, maintenance and related services for the Malaysian maritime defence industry," according to Boustead's annual report.

Originally Boustead told the Malaysian Stock Exchange that the service contract was for RM600 million (US$184.1 million) for six years, or US$30.68 million annually. However, the contract later ballooned to RM270 million per year. Boustead Holdings is partly owned by the government and has close connections with UMNO.

"There are good grounds to believe that [Perimekar] was created with a single objective: arrange payment of the commission and allocate the amount between different beneficiaries including Malaysian public officials and or Malaysian or foreign intermediaries," the complaint states.


COMMENTS: (29)

written by casper, April 17, 2010 00:18:02

We haven't achieved anything, NOTHING, even with this revelation and interest that is currently making the rounds in Paris. However, it should be all our concern if Ghani Patail would take another look and hopefully make space for an appeal on behalf of the deceased and her family back in Mongolia.

And still, even more puzzling, the two UTK fellas have a date with the hangman BUT no MOTIVE was ever established !!!! To the Yang Dipertuan Agong, the highest official on the bench, No.1 Imam of Masjid Negara and IGP, the lot of you deserve to be spit on if this interest in Paris doesn't pique any of you just a teeny bit.

C'mon, time to bite the bullet and do what is right unless of course all your hands are just as tainted as that of Razak Baginda, Najib, Rosmah and Maslinda(she wasn't a woman wronged, being director and all).

If you have no part in the illicit Euro 114 million, why persist with the charade and make don't know while this caper has now been blown wide open ? JUSTICE FOR ALTANTUYA.
+9 ...
written by Obadiyah, April 16, 2010 23:41:53

I WANT TO BUY THE MOVIE RIGHTS !!! This makes an EXCELLENT script !!!
+10 ...
written by merchant222, April 16, 2010 23:25:44

Unfortunately, the MCA, MIC, GERAKAN bastards dare not say anything about the VAST CORRUPTION of BN because they are as I have implied....SELF-INTEREST, which goes to say they are involved in all projects or purchasing with their hands soiled with dirty money belonging to us all!

When are the people in HULU SELANGOR going to wake up??? I think they are from the kampong style mentality and as Najis just said then, "Pakatan BORROWED from BN to run that constituency".

So, he knows pretty well that these kampong fellas can be fooled. Ha! Ha! Ha!....HULU SELANGOR; ARE YOU FARKERS DAMN DUMB or PLAIN DUMB, I ask.

Bodoh Cina-kui, Bodoh India dan Bodoh punya Melayu if you vote BN! PhhTUI!
+19 ...
written by merchant222, April 16, 2010 23:13:52

But of course, Perimekar just passed the buck to BasTEAD Holdings group because they are "owned" by LTAT (Lembuggers Tabong Angkatan Tentera?) and as the Defence Minister has the avenues and power to "churn" the deal to Baginda's advantage.

So, when 'Tan Si' Wok (you may ask who the farks is that) has to take over the burden, BUT OF COURSE, has to mark- up further to cover the toilet bowl and BUT OF COURSE, the Defence Minister will surely allow.

Who are THE ASS-HOLES? THE TAX PAYING RAKYAT! Again and Again and Again, it is the RAKYAT who always lose.....the money that they pay in form of taxes. Only blind and self interest BASTARDS wil still vote BN, "THE RAPIST"
+15 ...
written by malgal, April 16, 2010 23:10:29

was that why our govt leaders have never expressed any condolences to altantuya's family for the sheer tragedy of her brutal murder?

+13 ...
written by storm62, April 16, 2010 22:51:29

There like i've said many times before, Najis don't dare to sue the French Liberation Front on this.

He have his balls squeeze by the French people. His photos will be splashed across the globe if he tries anything funny with France.....ha ha ha najis, you want to buy from Russia?....we'll expose you, ha ha ha.

This is the best news for this weekend, i guess more to come next week.
+15 ...
written by rastamasta, April 16, 2010 22:48:48

Well done Suaram!!!
+14 ...
written by Aduh, April 16, 2010 22:45:28

Before this najis together with his senior prime minister , the fatty had lots of time to woo Pakatan MPs and ADUNs to cross over to strengthen beEND .and to enable him, the najis to stay longer as pm. But that has become history. It is no longer his priority. His main and only focus now is how to avoid ending up in jail.
+14 ...
written by HJ Angus, April 16, 2010 22:43:20

Defense contracts are quite prone to corruption.
I can remember the Bofors scandal that happened way back when we had the first and only Indian as head of the Navy.
The basic problem is that defense contracts are supposedly TOP SECRET and I guess that even some bribes are not accounted for!
Let us watch as observe how efficient is the French justice system - they have caught ministers before.

http://malaysiawatch4.b******t...thing.html
+7 ...
written by AlwaysFair, April 16, 2010 21:59:37

Tak Malu!!!! International fame and shame!!!
+22 ...
written by Alice, April 16, 2010 21:44:08

This news keeps emerging again and again....... it never dies.....hehehe.Let justice prevail.
+23 ...
written by Aduh, April 16, 2010 21:38:44

najis and roastmah.
You must be dead scared and having sleepless nights now. And you must be shitting and peeing in your pants without you realizing it. Hope it gets worse by the day for all the cruelty you have done to mankind.



+35 ...
written by betasigma, April 16, 2010 21:27:46

what's next??najis n umno be end might hav to engage APCO's service to work in France next for millions paid with the rakyat hard earned money again????
+36 ...
written by philip25, April 16, 2010 21:19:35

Where in the world you have leaders taking a cut for equipment bought for rakyaat & country. They steal from the people. After all it now cost more for the taxpayer. May you and razak burn in hell when the time comes and both of you die a slow painful death for cheating the rakyaat.
+37 ...
written by arazak, April 16, 2010 20:06:08

Hello Jibby,

You think the Tel Aviv’s APCO can now clean up your tarnished image internationally?

You think with that RM70 million paid meeting with Obama could boost your rotten image?

“All the perfumes of Arabia will not sweeten your bloody hand and you bloody bank accounts in Dubai, London and New York.” (this quote originally was Shakespeare, but I modified it to suit you).
+61 ...
written by justice seeker, April 16, 2010 18:42:19

A potentially explosive scandal in Malaysia over the billion-dollar purchase of French submarines, a deal engineered by then-Defense Minister Najib Tun Razak, has broken out of the domestic arena with the filing of a request to investigate bribery and kickbacks from the deal in a Paris court.

Although the case has been contained for eight years in the cozy confines of Malaysia's courts and parliament, which are dominated by the ruling National Coalition, French lawyers William Bourdon, Renaud Semerdjian and Joseph Breham put an end to that when they filed it with Parisian prosecutors on behalf of the Malaysian human rights organization Suaram, which supports good-government causes.

WE COULD HARDLY WAIT FOR ALL THE SHIT TO BE EXPOSED.
+79 ...
written by ganbing, April 16, 2010 18:31:24

This has all the elements of an action thriller movie starring Najib Razak, no?

+66 ...
written by educationist, April 16, 2010 18:19:23

Good!!
Let's hope the French will do a better job unearthing the slimy and stinking aspects of this corrupt deal!!
Altantuya had paid with her life!!
malaysian court and police have not provided any closure for her family!!
Perhaps the French police can!!
+81 ...
written by Better My, April 16, 2010 18:04:42

This submarine scandal has the potential to blow up in Pm's face during the next GE.
Then it would be justice for the miseries that government has caused the rakyat.

Thrash ISA. Save Malaysia.
+78 ...
written by carlitos, April 16, 2010 17:47:01

We should start a petition and send to the Judge in Paris - Why France have to pay $500 to a company when a lot of Malaysian are still poor. France participation in that corrupt practice is denying Malaysian of better life.
+70 ...
written by kclim, April 16, 2010 17:41:37

ironically highly questionable clandestine deeds that seems submerged and unsinkable to Malaysia's iron clad corrupt leaders may now surface and be finally torpedoed in the long arm of a French court of law. Hope the French authorities expose and prosecute all the culprits involved on both sides of the shady arm deals. Vive la France !! Malaysia Boleh !!!
+81 ...
written by kevinD, April 16, 2010 17:33:46

ALL IN THE NAME OF KETUANAN MELAYU !!!!!! BRAVO BRAVO BRAVO !!!!!!!
+93 ...
written by cheekhiaw, April 16, 2010 17:14:46

"None of the directors and shareholders of Perimekar have the slightest experience in the construction, maintenance or submarine logistics,"

----

Who says no experience? Under them the whole country has gone underwater faster than the Scorpene!

xxx
+140 ...
written by Angela Ooi, April 16, 2010 16:58:03

Admiral Tojo, you have taken the words off my mouth. May she continue to give these 'natangs' hell till justice is done.
+70 ...
written by sandokan, April 16, 2010 16:57:44

FUKK U NAJIS, FUKK U FAT ROASTMAHH, FUKK U BEGGINDAS, FUKK U AMNO.
+90 ...
written by batsman, April 16, 2010 16:54:22

Is the red boat following the Scorpene trying to put out the fire??? heeheehee
+48 ...
written by hellosunshine, April 16, 2010 16:50:41

It's good the French have started investigations and maybe prosecutions on the French side but on the Malaysian side, the umnoputra monkeys will say "See no evil. Hear no evil. Speakee no evil." Until after GE13, that is. Just you wait, Najis and his lanuns.
+98 ...
written by Fart Fart Wah, April 16, 2010 16:43:18

Here come Altuntuya.....comes again round the mountain..round the corner..straight for the fat mama's ass and baginda razak's too....of course the quiet pilot...don;t forget...Najib...The ghost of Altuntuya never sleeps...fat mama!!!
+101 ...
written by Admiral Tojo, April 16, 2010 16:41:54

The Ghost of Altantuya continues to haunt Jibby and Rosmah. They have no shame and honor. Oh Shit!

Shalom