The Financial Imbroglio of Prime Minister Najib Razak, where "friends & associates rule"

THE 1MDB AND THE SCORPENE SUBMARINE SCANDALS REVISITED

The complex web of the 1MDB scandal, has placed it as one of Malaysia’s biggest financial catastrophes. The money trail has been a maze, keeping the scandal snowballing beyond control, much to Prime Minister Najib Razak’s great peril. The “friends & associates” of the Prime Minister and his family have been given huge powers to direct the deals worth billions of ringgit, turning confusion into rage for many Malaysians.

The staggering RM42 billion ringgit in debt for the 1MDB in just 5 years has clearly shown how power play, patronage politics and corruption has systematically ruined this nation of ours. Financial scandals in Malaysia are aplenty, and so it isn’t a surprise to note that the 1MDB is indeed not the first mega financial scandal involving Prime Minister Najib Razak.

Surely we recall with the same fervor, the SCORPENE Submarine Deal that was another multi-billion dollar purchase, reeking of corruption that scandalized the nation just prior to the last General Elections. The numerous inconsistent answers dished out at Parliament finally led human rights group SUARAM to file a judicial complaint in the French tribunal.

There are interesting parallels between the 1MDB and the SCORPENE case. So what do they have in common?

Lets look at some of the parallels:

PRIME MINISTER NAJIB RAZAK FEET IN THE MUD IN BOTH DEALS

SCORPENE: Back in 2002 when the SCORPENE deal was inked, Najib Razak was Malaysia’s Defence Minister. He further assumed his position as the Deputy Prime Minister 2003 onwards when the submarines were being manufactured and delivered. He signed on to the contract with French Shipbuilder DCNS in 2002, and as such is responsible for the purchase. He was well aware of the wheeling and dealing of the chief negotiators, and the elements of the deal agreed by both parties.

1MDB: Najib Razak is chairman of the Board of Advisors of the 1 MDB. The 1MDB is wholly owned by the Finance Ministry, and he is also the Finance Minister. The buck stops with Najib on the 1MDB fiasco.

NAJIB HANDPICKS HIS CLOSE “FRIEND & ASSOCIATE” TO HEAD MEGA DEALS

SCORPENE: Prime Minister Najib contracted his close family ‘friend & associate” Abdul Razak Baginda to lead the negotiations. Razak baginda was not a personnel of the Defence Ministry, but was handpicked by Najib to lead the negotiations. In fact in documents confidentially shown to SUARAM by French lawyers then, it was highlighted that Razak Baginda was handpicked also because of his wife (Mazlinda Makhzan) close relationship with Najib’s wife (Rosmah Mansor). It was also made known to us that Najib had favoured Razak Baginda over Tun Daim Zainuddin back then.

1MDB: Now isn’t Jho Low, the man at the centre of the 1MDB controversy also Najib’s friend and associate? What really was Jho Low’s role in the Petrosaudi deal remains a huge mystery.

Did Razak Baginda and Jho Low take centre stage in both these mega deals only because they are friends & close associates of Najib Razak? Isnt this practice one that stinks of cronyism and patronage politics?

NAJIB’S FRIENDS & ASSOCIATES FUNNEL MONEY INTO THEIR OWN COMPANIES. HOW SIMILAR ARE RAZAK BAGINDA & JHO LOW?

There is an uncanny similarity over how these “friends and associates” of Najib, run the treasure chest of the government like its their own money, to be used, thrown around and siphoned away as they please.

SCORPENE: Documents show that Razak Baginda in SCORPENE Deal has set up 2 companies specific to the French purchase. The first, PERIMEKAR, a subsidiary of Ombak Laut Sdn Bhd, is largely controlled by his wife, Mazlinda. The second, a more discreet company found out mainly through the French probe called TERASASI, was formed to receive illicit funds never meant to be made public. Here his father and himself are the controlling Directors. While it was reported in Parliament that Perimekar had received close to RM 550 million (Euro 114.9 million), for coordination services, TERASASI received amounts of up to Euro 42 million. A Hong Kong chapter of the company was then established to continue the business deals between TERASASI and the French companies.

1MDB: Much has already been reported about Jho Low dealings with the Petrosaudi deal, and how RM700 million of the 1 billion investment money from 1 MDB was eventually siphoned off into a Swiss Bank account owned and controlled by Jho Low called Goldstar Ltd.

The largesse received by Najib’s “friends & associates” in such mega deals are no small bonus. They run into millions of ringgit of public money.

Both men have not been probed over their roles in these deals reeking of power abuse and financial mismanagement. They obviously receive protection from the system, and continue to roam around scot free.

LODIN WOK KAMARUDDIN, NAMED IN BOTH 1 MDB and SCORPENE. WHO IS HE?

SCORPENE: Lodin Wok Kamaruddin, another close associate of Najib has his name tainted in both scandals. Lodin was a Director of Perimekar, the go between company involved in the submarine purchase till 2010. He over saw the transfer of money amounting to Euro 114.9 million into Perimekar’s account. Ironically Perimekar’s only client was the Malaysian government.

1MDB:
Lodin incidentally is also on the Board of Directors and Chairman of the 1MDB.
Lodin is also the chief executive of the Lembaga Tabung Angkatan Tentera (LTAT), a fund, for military pensioners. The LTAT owned 20% of PERIMEKAR hence the use of public funds was involved in the purchase of the submarines.

We draw parallels here with how Najib directs Funds Contributed by Tax Payers with so much ease in business investments, with no clear oversight mechanisms, and no care for accountability and transparency. The LTAT, Lembaga Tabung Haji (LTH), and the Pensioners Fund (KWAP) have all been thrown into controversy. Najib has no qualms over safeguarding government linked companies tasked with administering public funds.

CONCLUSION

THE MONEY TRAIL EXTENDS TO MORE THAN JUST FRANCE & MALAYSIA. ITS AN INTERNATIONAL WEB OF POWER & DECEIT

SCORPENE: . The deal took on a complicated money trail, not just involving France and Malaysia. French lawyer Joseph Breham had revealed at a press conference that several companies including TERASASI, had parked themselves in Hong Kong to receive monies, purportedly from the sale of a confidential report from the Royal Malaysian Navy, that eventually won them the deal. .

The money trail further extended to Malta and Luxemberg where French companies set up to facilitate kickbacks and payments, in order to avoid the OECD convention in which the French government had signed in 2002. Payment slips of airfare tickets with the names of Baginda and Altantuya were issued from covert companies in these countries.

1MDB : From the middle east to Caymen Islands, the money trail has been laden with controversies and problems.

The similarities drawn between SCORPENE and the 1MDB are deeply worrying and illustrate the true machinations and plotting of Najib Razak. Too much money has been plundered with zero accountability at the expense of ordinary Malaysians. His empty chest beating, pledges to combat corruption and promote people centered governance, rings hollow. As the English idiom says “what goes around comes around”.

Najib must be held responsible for these scandals.
C4 thus joins the chorus of concerned voices and demand that he relinquish his finance minister portfolio with immediate effect, to save Malaysia from further catastrophe.

END

Note: The French probe on SCORPENE is still in progress at the Tribunal de Grande Instance. Despite the extended long lull, we remain hopeful that corrupt wrongdoers will eventually be caught and punished, and urge the Malaysian Anti Corruption Commission to pursue investigations onto the both the scandals without delay.

Released By
Cynthia Gabriel
Executive Director
Centre to Combat Corruption & Cronyism (C4)

* Cynthia Gabriel is the Former Director of SUARAM