Submarine Deal Kickbacks Haunt Malaysian PM Najib As Associate Is Charged In France

An associate of Malaysian Prime Minister Najib Razak has been charged in France with receiving bribes worth 30 million euros in a 2002 deal to buy two Scorpene submarines from the French company DCNS (now Naval Group).

PM Razak’s former adviser Abdul Razak Baginda was charged in France on July 18 with "active and passive complicity in corruption" and "misappropriation of corporate assets", the French judicial source told AFP.

It centres on allegations made by Malaysia's opposition that country’s naval needs was sold to French defence giant Thales, which part-owns DCNS, possibly to help land the contract. 

As part of the deal, French naval dockyards unit DCN agreed to pay 30 million euros to Thales' Asian unit, Thales International Asia. It is reported that another company, Terasasi, whose main shareholder was Baginda, received an equivalent sum for what was billed as consultancy work, but which investigators believe was really a front for kickbacks.  

The investigation is also looking at the allegations that DCNS paid commission of more than 114 million euros ($142 million) to a purported shell company, Perimekar, linked to Baginda.  

Four French defence industry executives have already been charged since the investigation began. They are two former chairmen of DCNI, Philippe Japiot and Dominique Castellan, and two former heads of Thint Asia, Bernard Baiocco and Jean-Paul Perrier. All four men deny the charges against them.