France indicts two ex-bosses in Malaysia submarine graft case

PARIS - 19 July 2017: French investigators have indicted two former top executives in a long-running probe into alleged kickbacks from the 2002 sale of submarines to Malaysia, sources close to the inquiry said Tuesday.

The two are Philippe Japiot, former chairman of the French naval dockyards unit DCNI, and Jean-Paul Perrier, former chief executive of the French defence and electronics giant Thales, they said.

The two, interviewed in May, have both been indicted for corruption, one of the sources said.

Japiot has additionally been indicted for "abuse of social assets" and Perrier for "complicity in the abuse of social assets," one of the sources said.

The investigation was launched in 2010 in response to a complaint by Malaysian rights group Suaram.

It centres on allegations that the French submarine maker paid commission of more than 114 million euros ($132 million) to a purported shell company linked to Abdul Razak Baginda, a former close associate of Prime Minister Najib Razak.

Najib was defence minister when the $1.1-billion deal for two Scorpene-class submarines was sealed.

From 2001 to 2007, Japiot headed the DCNI, the international branch of France's centuries-old naval shipbuilding operations, which changed its name last month from DCNS to Naval Group.

The French state holds just under two-thirds of Naval Group, and Thales slightly more than a third.

Two other people are under investigation in France in the same case: Dominique Castellan, also a former DCNI president, and Bernard Baiocco, former president of Thales International Asia.

All four deny any wrongdoing and the Malaysian government has said the contract was free of corruption.

The affair emerged spectacularly in 2006, when Abdul Razak's Mongolian mistress -- who was said to have demanded a payoff for working as a language translator in the deal -- was shot dead and her body blown up with plastic explosives near Kuala Lumpur.

A Malaysian court later cleared Abdul Razak of abetting the murder, sparking an outcry and opposition allegations of a cover-up.