PARIS • A close associate of Malaysian Prime Minister Najib Razak has been charged in France over alleged kickbacks in the 2002 sale of submarines to his country, a judicial source told AFP yesterday.
Abdul Razak Baginda was an adviser to Datuk Seri Najib when he was defence minister between 2000 and 2008. Mr Najib oversaw the deal worth nearly €1 billion to buy two Scorpene-class submarines and one Agosta-class submarine from French naval dockyards unit DCN, which is linked to French defence group Thales.
An investigation into the deal was launched in 2010 in response to a complaint from Malaysian rights group Suaram. As part of the deal DCN agreed to pay €30 million Thales' Asian unit, Thales International Asia (Thint Asia).
The investigation revealed that another company, Terasasi, whose main shareholder was Razak, received an equivalent sum for what was billed as consultancy work, but which investigators believe was really a front for kickbacks.
Razak was charged in France on July 18 with "active and passive complicity in corruption" and "misappropriation of corporate assets", the French judicial source said.
Four French executives have been charged since the probe 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.
The French investigators are also looking into allegations that €114 million had been paid to a purported Malaysia-based shell company, Perimekar, as part of the deal. That company was controlled at the time by Razak's wife.
But that payment is likely to ultimately fall outside the jurisdiction of the investigation because it was not made to a French company.
Razak was in the news for several years from 2006 after it emerged that his Mongolian mistress had been shot dead and her body blown up with plastic explosives near Kuala Lumpur. A Malaysian court in 2008 cleared him of abetting the murder, sparking an outcry and opposition allegations of a cover-up.