Suaram urges Putrajaya to come clean on Razak’s company in Scorpene deal

Suaram director Kua Kia Soong says the rights group has been vindicated by the indictment of a businessman related to kickbacks in Malaysia's submarines purchase from France. – The Malaysian Insider file pic, January 29, 2016.

It is time the Malaysian government revealed the role of Terasasi Sdn Bhd in the 2002 Scorpene submarines deal, following the indictment in France of an arms businessman suspected of having corrupt dealings with Datuk Seri Najib Razak, says rights group Suaram.

Its director Kua Kia Soong said that after six years of the French investigations into the Scorpene deal, the first indictment of the arms maker proved its suspicion of commissions paid to Malaysian officials.

Reports today said Bernard Baiocco, the former president of Thales International Asia (Thint Asia) , was indicted before magistrate Roger Le Loire on December 15 for "active bribery of foreign public officials” including Najib, the then defence minister and one of his advisers, Abdul Razak Baginda.

The former boss of Thint Asia, together with the Directorate of Naval Construction (DCN) who made the submarines, was also indicted for complicity in misuse of corporate assets.

DCN, the French state arms company, reportedly sold the submarines to the Malaysian government through Razak’s company, Perimekar, the main contractor of the Scorpene deal.

It was earlier reported that while Perimekar was nominated as the local vehicle to spearhead the submarine project, Terasasi was incorporated to serve as an external service provider.

Kua, in a statement today, said that the sale of the two Scorpene submarines and a sub Marino Agosta to Malaysia was the most expensive military procurement to date, costing nearly RM5 billion for the hardware plus more than RM2 billion for the training of operatives and maintenance of the submarines.

He added that French judges had been examining contracts which they suspected were used to pay for bribes.

One of these, referred to as "C5 commercial engineering", involved payment of €30 million by DCNI, a subsidiary of DCN, to Thint Asia, in respect of “selling expenses for export”.

He said the French judicial investigations also showed that another company, Terasasi, whose main shareholder is Razak, was paid almost the same amount for consultations.

"Investigators suspect these so-called 'consultations' to be a front for bribes.

"In the investigations, another contract provided for the payment of €114 million to Perimekar, the main contractor of the Scorpene deal.

"All this time, the Malaysian government has not told Parliament or the public about the existence of Terasasi and that it had a share of the spoils from the purchase of the submarines," Kua added.

He said instead, the government only tried to justify the payments to Perimekar, while the existence of Terasasi and payments it received only emerged when the French prosecutors’ documents came to light.

"It is time the Malaysian government reveals the role that Terasasi played in the Scorpene deal," Kua said.

- TMI