PARIS (AFP) - France has dropped some of the charges against an associate of former Malaysian prime minister Najib Razak over alleged kickbacks paid on a major submarine deal, judicial sources said on Monday (May 20).

Najib himself is currently embroiled in a massive corruption scandal involving the state economic development fund 1Malaysia Development Berhad (1MDB), where he has also been questioned on the submarine case.

The associate, Abdul Razak Baginda, advised Najib when the latter was defence minister between 2000 and 2008 on a deal worth €1 billion (S$1.53 billion) to buy two Scorpene-class submarines and one Agosta-class submarine from French naval dockyards unit DCN, linked to French defence group Thales.

An investigation into the deal launched in 2010 revealed that Terasasi, a firm whose main shareholder was Baginda, received an equivalent sum for what was billed as consultancy work.

Investigators believe it was really a front for kickbacks.

Baginda was charged in France in July 2017 with "active and passive complicity in corruption" and "misappropriation of corporate assets". Judicial sources said the Paris appeal court had dropped the charges of "passive corruption" while retaining the remainder of the charge sheet.

Baginda's lawyer Caroline Toby indicated she would appeal.

Four French defence industry executives have already been charged in the case.

They are two former chairmen of DCNI, Philippe Japiot and Dominique Castellan, and two former heads of Thales International Asia, Bernard Baiocco and Jean-Paul Perrier.

All four men deny the charges and say they did not have direct contact with Baginda.

The French investigators are also looking into allegations that €114 million was paid to a purported Malaysia-based shell company, Perimekar, as part of the deal. That company was controlled at the time by Baginda's wife.

However, that payment is likely to ultimately fall outside French jurisdiction, as it was not made to a French company.