June 4, 2018 / 12:00 PM / a year ago

Malaysia mulling task force to probe French submarine deal

KUALA LUMPUR (Reuters) - Malaysia’s cabinet is discussing setting up a special task force to investigate alleged corruption during the purchase of two French submarines in 2002 when the defence ministry was headed by ousted Prime Minister Najib Razak.

Malaysia's former prime minister Najib Razak arrives to give a statement to the Malaysian Anti-Corruption Commission (MACC) in Putrajaya, Malaysia May 24, 2018. REUTERS/Lai Seng Sin

Since his surprise defeat in an election last month, Najib has been barred from leaving the country, and anti-corruption agents have re-launched a probe into how billions of dollars went missing from a state fund that he founded.

Najib has denied any wrongdoing, but during nearly a decade in power he was dogged by scandal, mostly financial, including over suspected kickbacks paid in the submarine deal.

French financial prosecutors are probing the sale of the Scorpene-class submarines built by state-controlled warship builder DCN International (DCNI), and have placed Abdul Razak Baginda, a former aide to Najib, under formal investigation in connection with the deal.

Malaysia’s new defence minister said on Monday that a proposed task force looking into the deal will be discussed in cabinet, but did not elaborate further.

“It’s too early for me to comment because this task force will be discussed with Cabinet,” Defence Minister Mohamad Sabu was quoted as saying in an online report by Singapore-based broadcaster Channel News Asia.

Abdul Razak advised Najib on the 2002 submarine deal. He has denied wrongdoing, and the previous Malaysian government denied allegations of corruption. Telephone calls made by Reuters to Abdul Razak were unanswered.

The French probe began after Malaysian human rights group Suaram alleged that the sale resulted in some $130 million of commissions being paid to a company linked to Najib.

There has been no evidence linking Najib directly to corruption in the deal, and he and his supporters have consistently denied any wrongdoing. Najib could not be reached on Monday for a comment on the task force.

DCNI later became a new entity called DCNS, which in turn rebranded itself as Naval Group last year. French defence company Thales owns around a third of Naval Group.

Suaram also linked the 2006 murder of a 28-year-old Mongolian model to the submarine sale.

Altantuya Shaariibuu, an interpreter and associate of Abdul Razak, was killed and blown up with military grade explosives in a forest on the outskirts of Malaysia’s capital.

Last month, Mongolia’s President Battulga Khaltmaa urged Malaysian Prime Minister Mahathir Mohamad to reopen investigations into Altantuya’s murder.

Reporting by Liz Lee; editing by Praveen Menon and Simon Cameron-Moore

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