Malaysia minister denies French sub graft claims

(AFP) - Malaysia's defence minister on Tuesday denied allegations that a classified ministry report was sold to a French firm to land a controversial submarine deal.

Prime Minister Najib Razak has previously dismissed graft allegations linked to the $1.1-billion submarine purchase in 2002, when he was defence minister, saying it is an opposition-backed attempt to smear his image.

But in recent months, Malaysia's online media have been aflutter with new "evidence" that opposition-leaning rights group Suaram and its lawyers say has been turned up by French judges probing the case.

The claims come at a sensitive time for Najib, who is preparing for elections, which he is expected to call soon.

They include an allegation that a classified Malaysian defence ministry report on the country's naval needs was sold to submarine maker Thales, possibly to help the French firm land the $1.1 billion deal.

Malaysian Defence Minister Ahmad Zahid Hamidi, responding to opposition allegations of abuse, told parliament late Tuesday that no confidential information leaked out, and the deal was done through "direct negotiations in accordance with procurement procedures".

"To the best knowledge of the ministry, up to now there is no information detected to have been taken out of Malaysia," he said. "The ministry has never paid any commission directly or indirectly to any companies in the procurement of the Scorpene submarines."

At the request of Suaram, French judicial officials opened an investigation in March 2010 into the sale of the two Scorpene submarines, which were made by French shipbuilder giant DCNS.

Suaram alleges DCNS, which owns Thales, paid a commission of 114 million euros ($142 million in current terms) to a company called Perimekar, which is linked to Abdul Razak Baginda, an associate of Najib's.

On Monday, Asia Sentinel published 133 documents, obtained from the French inquiry, which showed securing the deal "has resulted in a long tangle of blackmail, bribery, influence peddling, misuse of corporate assets and concealment, among other allegations", the news portal said.

It also alleged top French and Malaysian officials, including then foreign minister Alain Juppe and former Malaysian prime minister Mahathir Mohamad, appear to have known of some of the "misdeeds" based on the documents.

Suaram representative Cynthia Gabriel said the documents all seemed authentic. Suaram's lawyer Joseph Breham could not immediately be reached to verify this.

The Malaysian government has long maintained that the submarine deal, brokered when Najib was defence minister, was free of graft and that Perimekar had not improperly benefited.

Abdul Razak, Najib's associate, has also been acquitted of charges of abetting the 2006 murder of his mistress, Mongolian interpreter Altantuya Shaariibuu, which the opposition has also been trying to link to Najib.

But Najib has denied any link to that case. Two Malaysian policemen have been convicted for the murder and sentenced to death.