Malaysian Submarines : The trail of retrocommissions is becoming clearer
In the string of « suspicions over corruption relating to arms deals » a new case is about to join those that followed the sale of frigates to Taiwan and submarines to Pakistan : French submarines sold to Malaysia.
Further legal action is due to be initiated in the next few days, with Suaram, a Malaysian NGO dedicated to the fight against corruption and member of the International Federation for Human Rights (FIDH), applying to join proceedings as a civil party, which already applied for a judicial review in November 2009.
Suaram would thereby have access to the details of the investigation, which is also a way to force the prosecution service to contact an examining magistrate, the last step before a trial that could last for years.
As was the case for contracts won by the DCN for submarines to Pakistan and frigates to Taiwan, there are increasing suspicions of retrocommissions to French political parties (See following graph). This case concerns the sale of two Scorpène submarines and an Agosta submarine to the Malaysian government. A contract worth approximately one billion euros, that was signed in 2002 with the Malaysian DCNS (former DCN, Department of Naval Construction) and Thalès.
A model’s body blown up with explosives Sex, murder, bribery, and suspicions rocommissions : the cocktail is explosive. It all started with the 2006 murder of Altantuya Shaaribu, a young model, interpreter and also an intermediary in this contract. Her body was found in the Malaysian jungle after being blown apart with explosives. The young woman appears to have been assassinated for having loudly demanded her share of the commission in an arms deal, in which the other parties involved were her lover, Abdul Razak Baginda, a friend and adviser of the other person involved, Rajib Nazak, then Malaysia’s Minister of Defence and now the country’s prime minister.
However, this shady affair hides another, which the French courts took note of. In December 2009, Suaram filed an initial suit against X at the Paris court for « active and passive corruption, trading of favours and abuse of corporate assets ». The state prosecutor Jean-Claude Marin then opened a preliminary investigation. At the time, it was suspected that a bribe of 114 million euros had been paid by the company Armaris (a subsidiary of DCNI and Thalès) to the Prime Minister Najib Razak and his entourage, through the company Perimekar. This company, which was officially established to « coordinate » the sale of the three submarines, had Abdul Razak Baginda’s wife as its majority shareholder.
France in violation because of the OECD Convention However, in the suit filed in December 2009, the plaintiffs argued, that in light of the way the company operated :
« There is no doubt that this legal entity [Perimekar] was created with a single goal : to organise the payment of commission and distribute the amount amongst the different beneficiaries - Malaysian officials and/or Malaysian or foreign intermediaries. » However, this contract was signed after the OECD Convention came into force in France in 2000, which punishes corruption of foreign public officials with ten years’ imprisonment and a 150,000 euro fine. Following this complaint, a preliminary investigation was conducted by prosecution : the hearings were made and searches were made at the premises of DCNS and Thalès.
Revealed in September 2008, the note books of Gérard-Philippe Menayas, former chief financial officer of the DCN, who was indicted in the Karachi Case, also confirm the suspicions of hidden commissions. In his memorandum (PDF), Menayas mentioned the Malaysian submarine contract as follows : « Since the entry into force of the OECD Convention regarding the fight against corruption in September 2000, only two contracts have been signed ; the first with India, and the second with Malaysia in 2002. These two contracts are the result of commercial actions undertaken prior to the OECD Convention. Furthermore, they are both suspected of non- compliance with this Convention. I have evidence to support this ». At the time of the contract’s signature Alain Richard was the Minister of Defence, in Lionel Jospin’s government (socialist party).
Three commissions instead of one for the sale of submarines With the forthcoming indictment, and the revival of this case, new items have been contributed to the case by the plaintiffs. First, according to sources cited by the plaintiffs, it was not the company Armaris that paid 114 million euros to Perimekar, but rather the Malaysian government, « with the sole purpose of circumventing the OECD Convention. » This is a true revelation, while the Malaysian Minister of Defence ended up « confessing » to the payments made by foreign companies to Perimekar ... Where did this money go ? Were there retrocommissions to French politicians ? Secondly, there does not appear to have been a single commission, but rather three. In addition to that of 114 million euros, there are two further instalments :
- one paid by the DCNI to the commercial networks of Thalès, for over 30 million euros, corresponding to « commercial fees relating to the negotiation and execution of the contract » ;
- the other for 2.5 million euros.
However, according to Gerard Philippe Menayas :
« Until the OECD Convention against corruption came into force in France, no contract for the sale of defence equipment to an emerging country could take place without the payment of commissions to policy makers (euphemistically called “commercial fees for exports” or “FCE”). »
The second commission was paid by Thalès to a recipient, who remains unknown, in order to convince the Malaysian government of the need to conduct additional work.
Finally, according to the complaint filed by the firm Bourdon, Suaram’s lawyer, the company Gifen, which was established by Jean-Marie Boivin in Malta, intervened in the negotiations « so as to facilitate the money transfers in this case », and particularly finance the trips of Baginda and Altantuya. The « catch » is that Jean-Marie Boivin is also cited in the Karachi case... for his role in the system for supplying slush funds to political parties.
Photos : Altantuya Shaaribu (DR), the first Malaysian submarine, a Scorpène made in France, in the port of Kuala Lumpur in September 2009 (Bazuka Muhammad/Reuters).
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