fmt: Scorpene middleman tells nothing new... by Kua Kia Soong

Scorpene middleman tells nothing new

fmt: July 30, 2013

A middleman like Jasbir must be beaming with pride at being hailed as the “architect” of the Scorpene deal.

COMMENT

By Kua Kia Soong

The New Straits Times has never been the beacon of investigative journalism in Malaysia.

Resurrecting Jasbir Singh Chahl to try to whitewash the Scorpene scandal is hardly a scoop – Jasbir’s churlish account fails to answer the many questions raised by the scandal and the murder of Altantuya Shaariibuu.

Suaram has all along stuck to the facts and this can be checked in our publication: “Questioning Arms Spending in Malaysia: From Altantuya to Zikorsky” by Kua Kia Soong, 2010.

By no means does Jasbir disprove the chronology of events noted in the book nor shed any light on the revelations by the French enquiry thus far.

But first, let us examine the credentials of this man touted as the “architect” of the Scorpene submarine deal, the most expensive arms purchase by our country to date, costing well over RM7 billion.

Who is Jasbir Singh Chahl?

When the submarine deal was signed in 2002, the Far Eastern Economic Review commented that it “…provides a rare peek into the normally opaque process of Malaysian arms purchases…Finally, it underscores the importance of political connections in winning a defence contract in Malaysia.” (FEER, 15.8.2002)

According to this FEER story, in 2000 then private French company Thomson-CSF (now called Thales) had been working with a middleman by the name of Jasbir Chahl in an attempt to sell a Crotale missile system to the Malaysian government.

A middleman like Jasbir must be beaming with pride at being hailed as the “architect” of the Scorpene deal when in fact middlemen in international arms deals normally try to keep a low profile as Jasbir has done for so many years.

This is how The Independent describes the work of a middleman in arms deals:

“1) He brings together buyers and sellers of weapons and military equipment, rather as estate agents bring together buyers and sellers of property;

2) He arranges the supply of specialised services, for example training and maintenance for complex Western combat jets that are bought by nations without the expertise to keep these planes flying themselves;

3) He obtains weapons for nations, guerrilla groups, mercenaries or others not legally permitted to buy them from Western governments or defence manufacturers;

4) He acts as a financial ‘cut- out’ in the extraordinarily complex flow of funds generated by multi-billion-pound arms deals. That is to say he helps to conceal the payment of bribes.” (Peter Koenig, The Independent, Oct 16, 1994)

According to the 2002 FEER article, Thales introduced Chahl to French government-owned DCN and the submarine deal was set in motion. Chahl then brought in Ibrahim Mohamed Noor, a businessman close to Daim Zainuddin, then Finance Minister.

Ibrahim’s private company, Perimekar, was to become the linchpin between the Malaysian and French governments. Ibrahim then brought in Abdul Razak Baginda, a military analyst who headed the Malaysian Strategic Resources Centre and also adviser to Defence Minister Najib Tun Razak.

In August 2001, Ibrahim sold Perimekar to Generasi Mulia, which served to hold the shares temporarily, paving the way for new, well-connected investors to step in.

By January 2002, everything had fallen into place. Generasi Mulia sold its 100% stake in Perimekar to Ombak Laut, a private company owned by associates of Abdul Razak Baginda. Ombak Laut then sold 40% to the Armed Forces Superannuation Fund, or LTAT and a sister company.

In that 2002 story, the FEER speculated on the payoff for Malaysian businessmen in the submarine deal:

“Defence analysts estimate that for all the effort, and for its continued involvement in the contract, Perimekar will receive, over the next six years, 8% of the total contract value: about RM288 million, and possibly more, as the euro, on which the contract is based, has appreciated 13% against the ringgit since the signing.” (FEER, 15.8.2002)

Perimekar never more than a travel agency

Jasbir tries to justify the exaggerated payments to Perimekar. He tells us nothing new to what the Defence Ministry has told us.

What the documents from the French judicial inquiry show is this view of Perimekar by the French state company DCN:

“The amount to be paid to Perimekar is over-evaluated. It is not worth it…They are never more than a travel agency…The price is inflated and their support function is very vague…Yes, that company created unfounded wealth for its shareholders.”

From the French investigations so far, the former finance director of DCN, Gerarde Philippe Maneyas had made a claim for 32 million euros (RM124 million) allegedly used to bribe Malaysian officials for purchase of the Scorpenes. The budget minister had questioned such a large bribe although he did eventually authorize the tax break.

From the French documents, it emerges that the commissions and dividends for the Scorpene deal were funneled through two companies, Terasasi and Perimekar, both owned by Abdul Razak Baginda. His wife, Mazlinda is a director in Perimekar while his father is also a director in Terasasi. Malaysians have been told about Perimekar and its “coordinating service” in the submarines deal. But so far there has been no mention of Terasasi. Neither has Jasbir mentioned Terasasi.

With the new French law and OECD Convention against corruption in place after 2002, the French arms merchants had to find an alternative way to pay commissions to their foreign clients. The method used was to create “service providers” that could “increase invoices” in order to take the place of commissions.

Thus, when the French state company DCN terminated its contracts, Thales took over as a private company, not involving the state. Thales International was appointed to coordinate the political connections.

A commercial engineering contract was then signed between DCNI and Thales, referred to as “C5”. It covered 30 million euros in commercial costs abroad. The companies used in the Malaysian case were Gifen in Malta, Eurolux in Luxemburg and Technomar in Belgium. The travel expences of Baginda and Altantuya were covered by these.

Another “consulting agreement” was signed in 2000 between Thint Asia and Terasasi for 2.5 million euros. From the Paris Papers, we know that at least 32 million euros (RM144 million) were paid by Thales International (Thint) Asia to Terasasi.

There is an invoice by Terasasi dated Oct 1, 2000 for 100,000 euros. There is also an invoice from Terasasi to Thint Asia, dated Aug 28, 2004 for 359,450 euros (RM1.44 million) with a hand-written note saying: “Razak wants it in a hurry.”

Altantuya’s links to the Scorpene deal

Altantuya was a translator. According to Baginda’s bail affidavit, she met Baginda in 2004 and became his lover, two years after the submarine deal was signed.

I don’t think the French officials who negotiated the deal needed a translator in the first place. What has transpired is that Altantuya knew about the deal from her liaison with Baginda and she had come to Kuala Lumpur expecting a cut in the commission.

During the Altantuya murder trial, when Baginda’s counsel read out the events following Altantuya’s fateful night, he skipped the part about Baginda going to the Deputy Prime Minister, Najib’s office, which made Justice Segara interject:

“Why did you skip that? There is nothing to worry. He just went there. It is in the affidavit. He should have known better and go straight to the police or IGP and not embarrass the DPM…Facts must surface. You cannot hide. The truth will always prevail.” (The Star Online, Jan 20, 2007)

Baginda, accused of abetting the murder, was acquitted in November 2008. He was acquitted without his defence being called while the two policemen charged, Chief Inspector Azilah Hadri and Corporal Sirul Omar, were sentenced to the gallows for killing her. After the verdict was made known, the government announced it would not be appealing against the Razak Baginda acquittal.

Murder accused Kpl Sirul Azhar Umar said he had been made a scapegoat by certain parties in the murder of Altantuya to protect their “evil plan”. The trial was deemed questionable by many observers.

Apart from painstaking attempts to keep then Deputy Prime Minister Najib’s name from being mentioned in the trial and probing the motive for the murder, other irregularities included: the sudden removal of the presiding judge just before the trial started without a plausible explanation to the lawyers; the changing of the head of the prosecution team at the last moment; the changing of the defence lawyers for the accused, one alleging interference by “third parties” in his work.

A witness testimony by Altantuya’s cousin alleging that the victim had shown her a photograph of herself, Baginda, Najib and “others” having lunch in a Paris restaurant was stopped by defence lawyers and prosecutors from testifying further. Nor did the court ask the witness to produce the photograph.

In the course of the trial, evidence was given that Altantuya’s entry into Malaysia had been erased from the records of the Malaysian Immigration. This could only have been directed by a higher authority.

As we can see, this middleman in the Scorpene deal has hardly illuminated us on all these questions surrounding the murder of Altantuya. What is surprising is the naivete of the high-brow propagandists in the NST in not pursuing the answers to these questions.

Any truth seeker would at least be interested to know the motive for the murder of the Mongolian lass.

This recalls Voltaire’s reminder that “…those who can make you believe in absurdities can make you commit atrocities.”

Kia Kia Soong is Suaram’s advisor. Suaram is involved in suing the Scorpene submarine makers in the French courts for corrupt practices.

TMI: A necessary riposte to Dr M - the Chinese know their place - by Ice Cream Seller

A necessary riposte to Dr M - the Chinese know their place - Ice Cream Seller

TMI: JULY 30, 2013
LATEST UPDATE: JULY 30, 2013 04:20 PM

Tun Dr Mahathir's latest tirade about the Chinese wanting political power assumes we are mostly naive and ill-educated to see otherwise.

What a load of codswallop from someone who seems to be in a time warp of his own. There is an Afghan proverb that says that what you see in yourself is what you see in the world.

1) Chinese do not appreciate their gains upon independence?

What gains is he talking about? A white master was replaced by a brown one. In the process, we lost an excellent education system, a well-respected judiciary and our moral fibre, and then were given an economic system so convoluted that only the bacteria of corruption thrives. To say that DAP argued these issues on behalf of the Chinese gives the DAP unnecessary credit.

2) Under the British, the Chinese were not allowed to go beyond becoming petty traders and shopkeepers?

Let us not forget that we are talking about the 1950s and earlier. What shopping malls were there then? Then, many Chinese were still poor. Still, the people had reliable water supply, electricity that was cheap (even without petroleum income), there was no need to go to private schools and universities to get a better education than what the government provided, no need for private hospitals (we had excellent doctors, nurses and administrators) and the police force was multi-racial.

Being a shopkeeper gave one a dignified existence and they served all races - even giving credit to customers. They were in no position to take on the British firms then but have demonstrated that today, despite the handcuffs of the NEP, they can take the world stage.

3) Government procurement had to go through crown agents.

What's the beef? The crown agents existed then and today it is no different except that we have our own crown (Umnoputra, Bumiputra or whatever putra) agents. In fact it is our own putra agents that have benefited by leaps & bounds to scales never imagined in the exercise of rent seeking.

If the British crown agents were indeed still around, our submarines would be able to function properly, there will be less Mongolians dead, our indelible inks would not be edible instead, our public transport would be better and there would be no PROTON.

4) British banks with government accounts, Chinese banks (OCBC, Ban Hin Lee) not doing much business with the government.

Just replace the British banks with Maybank, CIMB, Affin Bank, RHB Bank and a host of others. See the same picture (maybe in different colours now?). On top of it, Ban Hin Lee Bank does not exist today - no thanks to post-independence policies. And the British banks were PLCs, not GLCs where bailouts are an easy option.

5) Replacement of British firms by Chinese firms.

This line of argument is part of the problem. Don't you see it as Malaysian firms as opposed to (Malaysian) Chinese firms?  In any case, it's not as if the Chinese got government loans or grants to buy over the British ones. Some took loans to buy over the businesses - others pooled their resources. In any case, I am sure the British firms would only exit if they knew that, among other considerations, the new owners would be able to sustain or grow the firms.

6) Independence has clearly benefited the Chinese much.

Looking at the Chinese in Indonesia who had their backs to the wall (until unfettered by the half-blind Gus Dur but with better than 2020 vision), the Chinese in Thailand where there was no independence from any colonial master to speak of, this argument holds as much water as a Malabari fishing net.

How does one explain the success of the Chinese diaspora in Canada, Australia, the US, the Philippines, Burma and even in Mauritius? Because of Malaysian independence?

Dr M, for one, was probably the greatest beneficiary of our independence by having 22 years to steer the ship. On either side of the 22 years, he was and is pulling the strings to some extent or other as an adroit puppeteer. But alas, on his watch, the ship was steered on a journey beyond our shores and Kerala only to benefit a select group.

7) Chinese success under the BN "kongsi" government.

Yes, the Chinese became billionaires and started getting involved in businesses globally. I would argue that it was despite the shackles and hurdles that were imposed on them. Look at the Singapore companies operating globally - is it because of an Umno style "kongsi" in Singapore? I dare say that had it not been for the "mal-implementation" of the NEP, our Malaysian companies (Chinese owned or not) would be streets ahead of Singapore. Instead, our brains just walked and left to help make Singapore what it is.

8) Chinese not well represented in government administration because they do not like salaried jobs or have a distinct dislike for uniformed services.

Who then runs the government in China and Taiwan - Africans? As a boy, when I went to a government department, Chinese were well represented. In schools, they probably made up half the number of teachers (and they did not do tuition on a private basis big time either). The army and police had visibly a good number of them. So many nurses in the government hospitals were Chinese - and pretty good looking too!

Today, the Chinese are simply absent because of the lack of promotion prospects, the impression given that they are not trusted/welcome, and also the kind of work culture that permeates such establishments.

9) Chinese colleges and universities.

Restore the quality of education we had up to the 1960's and you will see the demand for Chinese schools diminish. They send their children to Chinese schools simply because the ordinary schools have become sterile, ineffective, with poor quality teachers, fear of Islam forced upon their children in subtle and not so subtle ways and a host of other reasons you are actually familiar with. Besides, in Chinese schools, the canteens never close - so no need to eat in the shower rooms.

10) DAP/MCA

It is not correct to say that the Chinese aspire for political power via DAP. The MCA simply lost support because the Chinese were fed up of a corrupt government that the MCA helped keep in power. If the Chinese really were after political power, they would have have done so along the lines of your paternal ancestors - became Muslims and married locals and morphed into Malays. They would then control Umno -instead of the Indians. And Ridhuan Tee would not have the platform he now struts on.

My arguments above are not motivated because I am of Chinese ancestry. I am not.  My extended family and close friends include Chinese, Malay, and others. In fact, the biggest group of my extended family have roots as deep in the same district as your paternal ancestors. Fortunately, that is where the similarity ends. - July 30, 2013.

* Ice Cream Seller reads The Malaysian Insider.

* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.