Razak Baginda-DCNS: LCS nightmare repeat of Scorpene scandal?

KUALA LUMPUR – Abdul Razak Baginda’s name has resurfaced in the littoral combat ship (LCS) controversy after he was mentioned in the newly declassified forensic audit report on the project.

Once dubbed a political analyst, his name was well known after he was charged with abetting the murder of Mongolian woman Altantuya Shaariibuu in 2006, and later acquitted in 2008.

He was also implicated in a shady RM4 billion deal for two Scorpene submarines, in which Shaariibuu was a translator.

The LCS forensic audit report, which was prepared for Boustead Heavy Industries Corporation Bhd (BHIC), mentioned Razak in a section dedicated to highlighting “unethical means” adopted by French shipbuilder DCNS (now Naval Group) in the Malaysian government’s “procurement of two submarines”.

The report claimed that under the submarine agreement, “Malaysian officials” had targeted to secure a RM514 million payment using “private company Perimekar Sdn Bhd, wholly owned by Abdul Razak Baginda”.

It added that he also headed local think-tank Malaysian Strategic Research, and that the organisation has ties with Umno. 

Based on Companies Commission of Malaysia (SSM) documents sighted by The Vibes, Razak is not listed as current or past director of Perimekar.

However, a major Perimekar shareholder is KS Ombak Laut Sdn Bhd, in which Razak’s wife Mazlinda Makhzan and daughter Rowena Abdul Razak have been directors since 2001 and 2010, respectively.

The two women also own majority stakes in KS Ombak Laut, while Rear Admiral (rtd) Datuk Mohd Hussin Tamby – who was also a former director in Perimekar – holds a 1% ownership.

Other shareholders of Perimekar include the Armed Forces Fund Board (LTAT) and Boustead Holdings Bhd, the parent company of BHIC and Boustead Naval Shipyard Sdn Bhd (BNS). 

BNS had received the RM9 billion LCS contract from the Defence Ministry – none of the six warships have been delivered to date.

LTAT and Boustead Holdings each hold a 20% stake in Perimekar. 

According to SSM documents, Perimekar’s nature of business is related to, among others, the marketing, supply and maintenance of submarines and surface vessels.

Besides that, another former director of Perimekar was Tan Sri Lodin Wok Kamaruddin, an ex-BHIC chairman who was accused of ignoring red flags raised by contractors of the LCS project.

He was on Perimekar’s board from 2002 to 2010, and left BHIC on December 31, 2018.

In 2010, human rights group Suara Rakyat Malaysia had filed a complaint against DCNS with the French courts for supposedly illegal commissions to Perimekar, leading to a raid on DCNS’ office and the seizure of numerous documents.

The documents reportedly supported claims of illegal payments and outlined the use of a network of intermediary companies – including Perimekar.

Najib-Razak Baginda connection

At the height of the Scorpene scandal, Razak was described as a close associate of disgraced former prime minister Datuk Seri Najib Razak.

Najib was defence minister from 1990 to 1995, and 1999 to 2008.

According to the BHIC audit report, French authorities had in 2012 appointed a pair of examining magistrates to investigate the case.

Subsequently, Najib and Razak were named by the court in 2016 as “likely bribe recipients and the focus of the investigation”, with Razak being placed under formal investigations the following year.

Following a high-profile trial in Malaysia, two Special Branch officers – Azilah Hadri and Sirul Azhar Umar – were found guilty in 2008 for the murder of Altantuya. 

Azilah is currently on death row in the same prison complex with Najib while Sirul is now in a high-security detention centre outside Sydney, Australia.

Meanwhile, Altantuya’s father, Shaariibuu Setev, and his family filed an RM100 million civil suit against Azilah and Sirul, Razak, and the Malaysian government.

Tonny Anak Lunggan, the investigating officer of the murder, testified in court in May this year that a police report lodged by Altantuya on the same day she went missing stated that “if something were to happen to her, they should look for Razak Baginda”.

DCNS’ history of misdeeds

The LCS audit report noted that DCNS’ complicity in prior problematic defence projects hints at LCS-related misdeeds, saying: “The procurement of two submarines by the Malaysian government (indicates) the possibility of (DCNS) involvement in the wrongdoing related to LCS.”

The inference had been reached based on testimonies from “various sources” stipulating how DCNS had “created a network to bribe individuals to fulfil its objective” to secure the Scorpene deal.

Based on the audit report, DCNS contracts concluded after France joined the Organisation for Economic Cooperation and Development Convention on Bribery in 2000 were channelled to offshore companies held by the firm’s former finance chief Jean-Marie Boivin.

It stated that Boivin is under investigation for having received “outlandish commissions through the many companies he (had) established in tax havens around the world”, including Luxembourg-based Eurolux and Malta company Gifen.

The audit report added that some of the official documents obtained were from the French National Police and the Judicial Police Directorate’s anti-organised and financial crimes unit, and had been presented to a French anti-corruption court in 2011.

Some documents also recorded that Boivin had paid to send funds to Razak, “the person representing politicians”.

“The two-decade campaign by DCNS and its subsidiaries to sell Scorpene submarines to the Defence Ministry was ultimately successful but by developing an understanding to bribe certain persons in Malaysia,” it said.  

Previously, The Vibes had reported how DCNS/Naval Group had claimed about RM90 million from financially troubled BNS for incomplete works in the LCS project, with payments being made despite the firm not reaching targets outlined in award letters. – The Vibes, August 27, 2022