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Billions, if not trillions, of Ringgit in corruption monies are stashed in overseas financial institutions by corrupt Malaysians. - Facebook image
PMX Anwar on Mindef ‘financial scandals’
KUALA LUMPUR, Jan 17, 2024: Over the years, Malaysia Defence Ministry (Mindef) has cost the Governments (elected every five years) multi billions of Ringgit in leakage.
The three high profile Mindef purchases that went awry were:
> THE Government paid S$1.86 billion to a contractor though no ship was delivered;
> THE Government bought two Northrop Grumman F-5E Tiger II fighters but the engines, the General Electric J85-21A engines, each worth about RM$50 million (US$15 million were missing; and
> THE Altantuya Shaaribuu (the Mongolian French translator abd model) who was murdered by police commandos in 2006 and exposed the EUR 1.2 billion sale of French ‘Scorpène’ submarines to Malaysia in 2002, and the dubious commissions that accompanied the sale.
And Malaysia’s 10th Prime Minister (PMX) Anwar Ibrahim and his so-called Madani Unity Government have started going after the corrupt, especially politicians who held high public office.
Anwar has also resorted to using the social media (see video clip above, in Bahasa Malaysia) to explain the rampant corruption and impropriety in the country and why his administration is committed to bring to book the corrupt.
No News Is Bad News reproduced below the background articles of Mindef-related purchases that went awry:
Questions raised in Malaysia Parliament on why contractor was paid $1.86b though no ship delivered
The Malaysian government has paid out RM6 billion in the RM9 billion project to build six Littoral Combat Ships. PHOTO: SCREENGRAB FROM THE STAR/ASIA NEWS NETWORK
PUBLISHED
AUG 8, 2022, 3:54 PM SGT
KUALA LUMPUR - Malaysia's locally built Navy ships are expected to be completed within the next year or two, said Defence Minister Hishammuddin Hussein on Monday (Aug 8), as he responded to growing clamour over the scandal-tainted project.
"I said at least within a year or two, I hope we will be able to complete the first ship," he said in Parliament in response to a supplementary question from a senator.
None of the six vessels ordered by Navy have been delivered by local contractor Boustead Naval Shipyard, which was awarded the project in 2013 without an open tender being called.
The government has paid out RM6 billion (S$1.86 billion) in the RM9 billion project to build the six Littoral Combat Ships (LCS), a parliamentary committee said last week.
Five of the vessels should have been delivered by this month, the bipartisan Public Accounts Committee (PAC), a body that reports to the Malaysian Parliament, said last Thursday (Aug 4).
The LCS are relatively-small ships generally designed for operations near the shore.
The contract traces back all the way to 2011, with the contract taking effect on Oct 3, 2013, Malaysian media has reported.
Boustead Naval Shipyard is a subsidiary of Boustead Holdings, whose biggest shareholder is the armed forces fund, Lembaga Tabung Angkatan Tentera.
Anti-corruption watchdog Transparency International Malaysia (TI-M) on Monday criticised how the project has been handled.
It compared the LCS scandal to the 1MDB scandal, where US$4.5 billion (S$6.2 billion) was allegedly siphoned out, and said Malaysia is increasingly becoming known for its bad governance resulting in the loss of billions of ringgit of public funds.
"With numerous governance and audit structures within the public sector which are responsible to prevent corruption and improve good governance practices in place, how could the LCS project which started in 2013 be allowed to become a colossal procurement and governance failure for so long?" TI-M president Muhammad Mohan said in a statement, as quoted by Malay Mail online news. "How could they collectively have missed all the red flags?"
The bipartisan PAC last Thursday issued a statement on its findings on the LCS deal. It said though not a single ship had been completed, the government had already paid Boustead Naval Shipyard RM6 billion, local media said.
The first LCS was supposed to be delivered in 2019, but is only 44 per cent completed, according to the PAC report.
The PAC also said the Navy's view on specifications for the six vessels was ignored by the Defence Ministry and Boustead, and another design was picked.
The deputy president of opposition Parti Keadilan Rakyat Rafizi Ramli had claimed that an internal investigation showed at least RM890 million had been misappropriated from the project due to fraud, duplication of contracts, and various other irregularities, Malaysiakini reported on Sunday.
PAC chairman Wong Kah Woh last week said former defence minister Zahid Hamidi would be called by the committee early next month, to testify on his role in the project.
Former commander of the Royal Malaysian Navy, Tan Sri Abdul Aziz Jaafar and the project's main contractor Boustead Naval Shipard would also be called for the proceedings, Mr Wong said.
Zahid said last week, as reported by Umno Online news: "I held the defence minister position from April 2009 to May 2013. So any party who caused the delay in the construction should be responsible for providing an explanation to the PAC."
The PAC said that of the sums paid out by the government, RM400 million was used by Boustead Naval Shipyard to repay previous debts incurred under its New Generation Patrol Vessel project, RM305 million was used for its facility in Cyberjaya, and another RM700 million was a cost overrun for the LCS contract. - Straits Times
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For image info, go to https://daisetsuzan.blogspot.com/2013/06/of-missing-jet-engines.html
Missing jet engines spark crisis in Malaysia
By Kevin Brown in Singapore
DECEMBER 22 2009
The Malaysian government is facing a fresh corruption crisis after officials admitted that two US-made fighter jet engines had disappeared from an air force base after apparently being illicitly sold by military officers to a South American arms dealer.
Najib Razak, prime minister, said there would be a full investigation of the thefts, which happened in 2007 and 2008, when he was defence minister.
However, opposition parties accused the government of covering up the incidents.
Lim Kit Siang, parliamentary leader of the opposition Democratic Action Party, said the authorities had been “super slow” and claimed that the prime minister’s response had painted “a frightening picture of a government of thieves”.
Idris Ahmad, spokesman for the allied Parti Islam SeMalaysia, said “powerful people” had been involved.
“We don’t want only the ikan bilis [anchovies] to be arrested while the sharks are allowed to swim freely,” he said.
The General Electric J85-21A engines, each worth about M$50m ($15m), were spares for the Royal Malaysian Air Force’s Northrop Grumman F-5E Tiger II fighters, which fly from the Butterworth air base near the country’s northern border with Thailand.
Ahmad Zahid Hamidi, defence minister, said the engines and associated equipment were “believed to have been sent to a South American country” after being moved to the Sungai Besi air force base in Kuala Lumpur for maintenance.
The defence ministry would not identify the company or the country involved or comment on claims in the Malaysian media that the engines may have ended up in the Middle East.
The F-5 went out of production in 1989 but is still flown as a trainer aircraft by US forces and is in frontline or reserve service with many foreign air forces, including that of Iran.
The defence ministry said several senior officers were being investigated.
General Azizan Ariffin, chief of the armed forces, said the engine thefts might have been “the tip of the iceberg”, raising the possibility that other military equipment might also have disappeared.
The disclosure of the thefts is a serious blow to Mr Najib, who has promised a crackdown on corruption as part of efforts to recover support for his long-serving National Front government, which lost many of its seats in a general election last year.
The prime minister last week unveiled a three-year action plan amid concerns about declining investor interest and the impact of Malaysia’s fall to 56th in the 2009 Corruption Index published by Transparency International – down from 47th in 2008. Mr Najib has flatly denied any personal corruption, including opposition claims of involvement in an allegedly corrupt submarine deal while he served as defence minister.
Corruption charges were brought this month against a senior port executive and two other officials linked to a controversial development near Kuala Lumpur known as the Port Klang Free Trade Zone. - Financial Times
The Malaysian Scorpene Submarine Affair
World Peace Foundation - November 12, 2020 (updated September 12, 2022)
Royal Malaysian Navy naval station at Sepangar Bay, Sabah. Image Source: Wikimedia/Creative Commons, CEphoto, Uwe Aranas.
The EUR 1.2 billion sale of French ‘Scorpène’ submarines to Malaysia in 2002, and the dubious commissions which accompanied the sale, might have gone unnoticed were it not for the kidnap and murder of a young translator in 2006.
The victim, who had worked for a key agent on the deal, was targeted when she attempted to get her share of the commissions.
The subsequent murder trial implicated members of the domestic police’s special intelligence branch, who may have served the defense minister and future prime minister Najib Razak as bodyguards.
With investigations in Malaysia stymied by the political implications, momentum shifted to France. DCNS, the French shipbuilding company, was raided in 2010, and it eventually became clear that the company was under scrutiny for operating a chain of intermediaries to bribe Razak and the agent, Abdul Razak Baginda, in violation of the Organization for Economic Cooperation and Development (OECD) Convention on Bribery and its corresponding law in France.
Case details
Seller country: France, Spain
Seller company: Thales, Navantia, DCNS (now Naval Group)
Buyer country: Malaysia
Goods category: Submarines
Equipment sold: 2 Scorpene submarines, 1 Agosta submarine, second-hand
Deal value: EUR 1.2 billion
Sum involved in corruption: EUR 146.5 million
Start year: 2002
Outcome status: Legal Investigation Ongoing
Dramatis Personae
Najib Razak — Malaysia’s defence minister (1999-2008) when the deal was signed, later prime minister (2009-2018).
Abdul Razak Baginda — former director of the Malaysian Strategic Research Center; suspected Malaysian agent for DCNS and controller of companies used to funnel commissions.
Altantuya Shaaribuu — Mongolian translator, formerly in a relationship with Baginda; assisted with the deal and was murdered in 2006.
Azilah Hadridan and Sirul Azhar Omar — Malaysian police Special Action Unit officers, bodyguards to Najib Razak; convicted in 2008 of the murder of Altantuya Shaaribuu. An appeals court overturned the verdict and freed them in 2014, whereupon Sirul Azhar Omar fled to Australia. The appeals court’s judgment was itself overturned in 2015 by the Federal Court, leading to reinstatement of the death penalty against both.
Bernard Baiocco — former president of the Asian division of Thales (which owned a 50% share of prime contractor Armaris and now an indirect share through a stake in DCNS); suspected by French magistrates of paying bribes in relation to the deal.
Dominique Castellan — former president of the international branch of DCNS; suspected by French magistrates of paying bribes in relation to the deal.
Summary of Corruption Allegations
Corruption allegations center on the role of a key agent for the deal, businessman Abdul Razak Baginda, a close associate of Malaysia’s defence minister at the time, Najib Razak. Razak is now Malaysia’s prime minister. The biggest suspicious payment was of EUR 114 million to Perimekar, a Malaysian company of which Baginda’s wife was the primary shareholder. The payment was for “support and coordination services” in relation to the deal, but the company was only set up in 2001, a few months before the deal was signed, and had no relevant experience or expertise in managing this type of project. Further payments of EUR 30 million were subsequently made to Baginda. A further payment of EUR 2.5 million was subsequently made to an unnamed recipient. These commission payments were allegedly used to bribe Razak and other Malaysian officials.
Timeline
1991
Malaysia opened tenders for a number of major military acquisition programs, including tanks, jets, and naval systems.
2002
Malaysia agreed to purchase for EUR 1 billion two Scorpène submarines from Direction des Constructions Navales (DCN, now renamed Naval Group) of France and Navantia of Spain. Armaris, a joint-venture between DCN and Thales, would be the prime contractor for this sale while Navantia would serve as a design and industrial contracting partner.
2007
Thales swapped its direct investment in the Armaris joint venture for a stake in DCN itself; since 2011, the French shipbuilder has been 35% owned by Thales.
Investigation Outcomes
2006
Allegations of corruption relating to the deal emerged following the murder of 28-year old Mongolian interpreter Altantuya Shaaribuu by two officers of the Malaysian Special Branch, Azilah Hadridan and Sirul Azhar Omar, also previously bodyguards to Najib Razak. Shaaribuu had been Baginda’s girlfriend, having met him in 2004, and had assisted in translating documents relating to details of the contract. When Shaaribuu heard that EUR 114 million had been paid to Perimekar, a company controlled by Baginda, she travelled to Kuala Lumpur to pressure Baginda into paying her USD 500,000 which she claimed was owed for her work in relation to the deal. She repeatedly appeared outside his house harassing him, possibly in an attempt to blackmail him.
19 Oct 2006
A trial found that Shaaribuu was kidnapped and shot dead by the two Special Branch Officers, Azilah Hadridan and Sirul Azhar Omar, who subsequently destroyed her body with military-grade C-4 explosives that could only have been obtained with the defense ministry’s permission. The two executioners were caught because her taxi driver, annoyed at not being paid, had noted down the registration number of the kidnappers’ car.
2008
The officers were convicted of her murder in 2008 and sentenced to death. The verdict was subsequently overturned on appeal in 2014, then reinstated by a higher court in early 2015. Azilah remains imprisoned in Malaysia, while Sirul Azhar fled to Australia, which will not hand him over without guarantees against eventual execution. Baginda was charged with abetting the murder, but acquitted.
2009
The case, however, led to investigations into potential bribery in relation to the Scorpène deal. The French newspaper Libération published detailed allegations of illegal commissions and of Baginda’s involvement in the murder. The article revealed details of documents that the Malaysian court had refused to admit as evidence, supporting some of the claims.
2010
The Malaysian civil society group Suara Rakyat Malaysia (SUARAM) pursued investigations, and launched a complaint with the French courts in 2010 regarding bribery of Malaysian officials. A raid on DCNS’ offices in 2010 led to the seizure of numerous documents, 133 of which were subsequently obtained and uploaded to the internet by the Asian Sentinel newspaper in 2012. The documents supported claims of illegal payments, established a possible link between the murder of Shaaribuu and the commissions, and outlined the use of a network of intermediary companies (including Perimekar) to circumvent the OECD Convention on bribery, which France had signed in 2000. The documents also claimed that DCNS was aware that the final benefactor of the commissions was to be the Malaysian ruling party, the United Malays National Organisation.
Mar 2012
French authorities appointed a pair of examining magistrates to investigate the case. In 2016, Razak and Baginda were named by the magistrates as likely bribe recipients and the focus of the investigation. Baginda was placed under formal investigation in August 2017. Former Thales International Asia head Bernard Baiocco and former president of DCNS International Dominique Castellan are also under formal investigation for paying out the bribes. The Malaysian government denies that there was any corruption associated with the deal. Baginda admits receiving the EUR 30 million, but maintains they were for his lobbying services and that no monies were paid to government officials.
Nov 2018
Malaysian online newspaper The Star reported that investigators had re-opened the corruption case against Najib Razak, six months after he was removed from office in an upset election. Najib was reported to have visited the Malaysian Anti-Corruption Commission headquarters at the request of investigators.
References
World Peace Foundation - Compendium of Arms Trade Corruption
https://sites.tufts.edu/corruptarmsdeals/the-malaysian-scorpene-submarine-affair/
“Scorpène’s sting: Malaysia’s bribery and murder scandal,” Defence Industry Daily, March 20, 2013, http://www.defenseindustrydaily.com/scorpenes-sting-liberation-publishes-expose-re-malaysias-bribery-murder-scandal-05347/.
John Berthelsen, “Deep and Dirty: Malaysia’s Submarine Scandal,” Malaysia Sentinel (online), June 25, 2012, http://www.asiasentinel.com/politics/deep-and-dirty-malaysias-submarine-scandal/.
Arnaud Dubus, “Un cadavre très dérangeant,” Liberation (online), Mar. 5, 2009, http://www.liberation.fr/planete/2009/03/05/un-cadavre-tres-derangeant_463577.
“SUARAM starts legal fund to probe submarine commissions in French courts,” SUARAM (website), May 30, 2011, http://www.suaram.net/?p=918.
The arrests followed a damning parliamentary report that found widespread corruption and cost overruns at the project, which has run up debts of more than $1bn. - Corruption Tracker
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