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No Graft In Submarine Purchase, Say Malaysia Leaders

Officials of Malaysia’s ruling UMNO party, including Prime Minister Najib Razak, left, are denying there was corruption in connection with the $1.25 billion purchase of two submarines from France in 2002.

Documents seized in France during raids on French shipbuilding giant DCNS in 2010 indicate ‘commission’ payments to Malaysian companies of more than $190 million.

Many of the documents seized in the raids were published this week by the Asia Sentinel. The site said the material came from an anonymous and untraceable source. 

Among the allegations is that the Malaysian Defense Ministry sold classified documents to DCNS that helped it win the bid to supply the two submarines. Najib was Defense Minister at the time. He hasn’t been linked to any commission payments and has denied they occurred. He became Prime Minister in April 2009.

This week, Defence Minister Zahid Hamidi said no classified defense documents were sold and no commissions were paid.

Najib blamed opposition groups for making the corruption allegations. He has to call a general election before March 2013. His ruling party has been in power since 1970 but opposition parties are gaining popularity.

French lawyers representing the Malaysian human rights group SUARAM said the leaked documents appeared to be authentic. They showed that a company based in Hong Kong called Terasasi was paid nearly $50 million by Thales International, a subsidiary of DCNS. Terasasi was allegedly set up and controlled by an associate of Prime Minister Najib.

‘Terasasi only exists as a name on the wall of a Wanchai district accounting firm in Hong Kong,’ the Asia Sentinel said.

Another Malaysian company, Perimekar, received about $140 million for ‘support services’ it provided in the deal. Perimekar, which has been acknowledged by the Malyasian government, is also owned by an associate of the Prime Minister.

SUARAM is suing in France over the commission payments, which it said were kickbacks from DCNS for the submarine sale. 

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