Money may have been funneled to UMNO officials through Hong Kong incorporated company, writes Asia Sentinel’s John Berthelsen

French investigating magistrates probing the US$1.2 billion sale of submarines to the Malaysian Defense Ministry are targeting, among other things, a Hong Kong-based company called Terasasi (Hong Kong) Ltd., whose principal officers are Prime Minister Najib Tun Razak’s close friend and the friend’s father.

Investigators believe that at least some of the €36 million funneled through Terasasi ended up in the pockets of Najib, who was Malaysia’s defense minister and deputy prime minister when the two Scorpene submarines were purchased from Thales International or Thint Asia. The state-owned defense giant DCN, later known as DCNS, and Thales established a joint company named Armaris to manufacture the submarines in 2002.

The two Armaris Scorpenes, named for the first prime minister of Malaysia, Tunku Abdul Rahman*, and Najib’s father, Tun Abdul Razak, are on duty in Malaysian waters.

Abdul Razak Baginda, the former head of a Malaysian think tank who was at the center of a 2006 investigation into the death of Mongolian translator and party girl Altantuya Shaariibuu, is listed as one of the two directors of the company, which was previously incorporated on June 28, 2002 as Kinabalu Advisory and Support Services Ltd according to the Hong Kong Companies Registry. The other director is Abdul Malim Baginda, Baginda’s father.

The Terasasi offices are located on the 19th floor of an office at 3 Lockhart Road in the Wan Chai district of Hong Kong. There is no indication in Hong Kong government records of what Terasasi’s business is. It is only listed as a “local company.” However, French authorities say Terasasi apparently received regular payments from Thint Asia. One payment was for €360,000 accompanied with a handwritten note saying “Razak wants it to be paid quickly.”

The magistrates have documents that show that the money was funneled from Thint Asia to Terasasi — €3 million of it when Terasasi was still domiciled in Malaysia, and €33 million after it was incorporated in Hong Kong. There is no indication at this point where the money went. French investigators, however, theorize that it was part of €146 million that may have been funneled to officials of the United Malays National Organization and Najib, who traveled with Abdul Razak Baginda several times to France as defense minister at the time the Malaysians purchased the submarines from DCNS.