| KUALA LUMPUR, June 26
KUALA LUMPUR, June 26 Malaysia's government will
address allegations on Tuesday over its purchase of two French
submarines, responding to a scandal that threatens to tarnish
Prime Minister Najib Razak ahead of elections he is expected to
call later this year.
Defence Minister Ahmad Zahid Hamidi is due to speak in
parliament on allegations that Malaysian navy documents were
sold to French shipbuilding giant DCNS to help its bid for the 1
billion euro ($1.25 billion) contract it won in 2002.
Najib, defence minister at the time, has for years denied
allegations of wrongdoing in the purchase of the Scorpene-class
submarines. There has been no evidence linking him directly to
corruption in the deal and his supporters say the political
opposition is behind efforts to revive the issue just ahead of
But his government is under mounting pressure to give a
fuller explanation of the dealings after documents in a French
court case brought by a Malaysian human rights group were leaked
and picked up by the country's lively online media.
The documents, including records seized by French
prosecutors in a raid on DCNS's offices, detail payments made to
two companies set up by former political analyst Razak Baginda,
a former associate of Najib who worked on the submarine deal.
The documents, most of which were published this week by
online media group Asia Sentinel, contain a report prepared for
DCNS stating that major defence contracts required "substantial
transfers of money to individuals and/or organisations".
"In Malaysia, usually ... the ruling party is the largest
beneficiary," the document said, referring to Najib's
long-ruling United Malays National Organisation (UMNO).
Another document quotes a former top DCNS executive saying
that Perimekar, one of Razak Baginda's companies, appeared to be
little more than a "travel agency" set up to create "unjust
enrichment" for its shareholders.
Joseph Breham, a lawyer representing rights group SUARAM in
the French case, told Reuters that the leaked documents were
"We cannot prove the money went to UMNO. But we can prove
the money had no counterpart. If it was not for corruption, they
paid for nothing," Breham said.
Officials at DCNS, a state-controlled company part-owned by
defence electronics group Thales, could not
immediately be reached for comment. Malaysian government
officials did not immediately respond to requests for comment.
A source close to Malaysia's government said that SUARAM was
heavily linked to the country's opposition, which is aiming to
topple the ruling Barisan Nasional (BN) coalition in elections
that Najib must call by March. Government supporters say that
civil prosecutions, such as that brought by SUARAM, are common
in France and are no indication that a crime has been committed.
Breham told reporters at a news conference in Bangkok last
month that a confidential Malaysian navy document assessing the
French bid was sold to DCNS by another Razak Baginda-controlled
firm, Terasasi, for 36 million euros. Opposition politicians
have said that would amount to treason, if proved to be
Malaysia's government has acknowledged that Perimekar
received 114 million euros for its support services, but has yet
to comment on the role of Hong Kong-based Terasasi.
The documents also mention Razak Baginda's relationship with
Altantuya Shaariibuu, a murdered Mongolian interpreter and model
who was blown up with military-grade explosives near Kuala
Lumpur in 2006. Razak Baginda was acquitted of the murder but
two of Najib's bodyguards were convicted and jailed for killing
the woman. Razak Baginda is believed to have moved to Europe and
could not be reached for comment.
The allegations emerging from the French court have helped
galvanise Malaysia's opposition. The coalition is expected to
win the election but its victory is far from guaranteed after
the opposition made shock gains in 2008 that shook the BN's
half-century grip on power.
"Any implication that the Scorpene deal involved corruption
would be enough to derail him (Najib)," opposition MP Tony Pua
told Reuters at a recent dinner to raise funds for SUARAM's
(Writing by Stuart Grudgings; Editing by Nick Macfie)