RMAF may lease Gripens an option

The Royal Malaysian Air Force (RMAF) is considering an offer from Sweden to lease up to 18 JAS39 Gripen fighter jets for its Multi-Role Combat Aircraft (MRCA) programme.

RMAF chief Tan Sri Rodzali Daud told theSun leasing the Gripens is a cheaper solution considering the huge capital expenditure needed for the procurement of new fighters.

"The Gripens had been leased to European air forces, so there is nothing new about such a deal.

"The aircraft also meets all of our MRCA requirements although I admit it is short on gas and range due to its small size," he said when asked to comment on claims by defence industry sources that Sweden has offered a lease-buy option for the Gripens.

Sources told theSun that offer was made after Gripen and the Sukhoi Su-30MKM were eliminated from the MRCA programme following technical evaluation by RMAF test pilots.

They said the three top contenders, namely Boeing F/A-18 Super Hornet, Dassault Rafale and Eurofighter Typhoon, would compete for the final stage of the programme, where their transfer of technology packages and off-set offers would be evaluated before the winner is selected.

Rodzali denied that Gripen and Sukhoi were no longer considered for the MRCA programme as "we are still evaluating all of the aircraft".

He also denied that RMAF had ranked the aircraft in the technical evaluation.

Instead, he said, the aircraft's strengths and weaknesses were documented for further evaluation.

According to him, one important factor for the final selection would be the lowest support cost. "If the Super Hornet is seen as the favourite, it is because we already have the Hornets (eight units) in service."

Asked how many Gripens will be leased if the offer is accepted, he said "preferably it will be 18 planes as specified in the MRCA".

He said despite budgetary constraints, the MRCA programme will go ahead as the air force has planned to retire the 10 MiG-29N Fulcrum air superiority fighters by 2015. "We may need a special budget, one that covers three Malaysian plans," he added.

Rodzali declined to confirm the budget allocation for the MRCA programme but sources told theSun the air force could only procure 12 jets if it opts for the Super Hornet, Rafale or Typhoon.

Hungary and Czech operate the Gripens under a 10-year lease-and-buy contract, for around RM398 million a year, which covers servicing and training.

Rodzali dismissed any hint of an arm race in the impending buy.

"The reason we are looking for new fighters is because of the capability gap. We need to ensure we are on par with other nations.

"Another reason is technology. Technology is moving rapidly. We cannot afford to be left behind.

China has territorial claims to nearly 20 countries

Chinese leader Mao Zedong not only built a strong country but also outlined a global goal: "We must conquer the globe where we will create a powerful state." Today, China has territorial claims to all its neighbors. Naturally, the U.S. is dreaming of becoming a mediator in resolving disputes in the region. But it seems that Beijing absolutely does not care about their opinion.

Burma, Laos, Northern India, Vietnam, Nepal, Bhutan, Thailand, Malaysia, Singapore, the Ryukyu Islands, 300 islands of the South China, East China and Yellow Seas, as well as Kyrgyzstan, Mongolia, Taiwan, South Kazakhstan, the Afghan province of Bahdashan, Transbaikalia and the Far East to South Okhotsk - here is the complete list of areas that, according to Zedong, were lost due to the fall of the Qing empire. All of these countries and regions combined exceed the territory of modern China. Not all complaints are voiced by the Government of China in the international arena, but within the country the imperialist ambitions have not been lost, but rather, are actively promoted.

   

The PRC authorities talk out loud only about the areas that, at least theoretically, can be taken away from Japan and Korea. Tokyo is regularly frustrated not only because of the travel of the Russian leaders to the Kuril Islands, but also about the Chinese ships freely entering the disputed Senkaku Islands waters. Beijing believes that the Islands are called Diaoyu, and they belonged to China, but the malicious Japanese tricked the U.S. into giving them to Japan because after World War II the uninhabited archipelago was in the US jurisdiction.

Significant reserves of natural gas were found on the islands. For the growing industry of China and stagnant Japan it is more than a serious argument in favor of the struggle for the archipelago, no matter what it is called. Not to mention the fish that is found there in large quantities. To date, the only agreement the parties have reached in the negotiations is on the joint development of oil fields. In addition, if the Japanese behave more or less decently, the Chinese are regularly caught for illegal fishing in the area.

Any territorial dispute, but rather, its resolution, is a serious precedent. If China's claim in respect of at least one territory from the list of the "lost" is satisfied, the Chinese machine would be unstoppable. Despite the fact that the Chinese are very pleased to partner with Russia and have always supported Russia in the UN Security Council, in person, on the sidelines, its diplomats supposedly jokingly hint to their Russian colleagues: you must understand that soon you will have to share the Far East? China has more than a billion people, while Russia's vast territory barely has 150 million.

These dangerous trends - demographic, and as a result, geopolitical - must sound scary to the Russian government, but so far it seems that it is happy with the fact that Beijing makes territorial claims only to Seoul and Tokyo. In 2005 Russia had already given China a bounty in the form of 337 square kilometers of land in the area of ​​Big Island (upper Argun River in the Chita region) and two sites in the vicinity of the islands Tarabarov and Big Ussuri near the confluence of the Amur and Ussuri.

However, none of the leaders of the military departments of ASEAN that includes all debating countries agree to recognize, for example, the fact that Diaoyu belongs to Japan. Instead, the defense ministers of Vietnam, Indonesia, Australia, Thailand and Singapore urged the Japanese authorities to proceed with caution and within the framework of the international law. These countries certainly do not need a resolution to the dispute because in that case their territory will be separated from China only by perseverance of the latter.

They are silent about the "Iodo island" (the Chinese version is Suenchzhao. - Ed) in the East China Sea. The sneaky Chinese took the principle of dividing the Arctic as an example and now claim that the underwater ridge of this tiny piece of land is under close control of the Chinese. Since the Iodo is closer to Korea, in 2003 the Koreans built an uninhabitable marine research station there. From the standpoint of the international law, this rock in general should not be the subject of a debate.

In any case, the controversy continues, Japan and South Korea remain to be supported by their all-time ally - the United States. For the US, the unification of Southeast Asian Nations is a chance to save their own economy, because in that case the World Trade Center will move there, where currently there are no transnational corporations in the amount sufficient for the U.S. 

The success of the White House in the region does not depend on the strength that America loves to show any chance it has, but rather, diplomacy, as the countries of ASEAN and Asia-Pacific region do not trust each other or anyone outside the regional boundaries. However, Washington is trusted here because of the support of Seoul and Tokyo. However, China has already pushed Japan out of the ranks of the largest economies in the world, and the structure of the region is no longer formed on spatial basis.

Therefore, territorial claims of China, and not Russia, India or, for example, Australia are so important for Washington. Beijing is the only capital of the world, ready to use force in the struggle for the sake of expansion. During the last ten years, while America was blowing up its financial bubble, China has not only developed the industry, but also equipped its area of ​​interest with military equipment. China has placed 38 new diesel and nuclear submarines in the region, purchased four destroyers of class "Modern" from Russia and built another dozen on its own, and has launched a network of ground-based ballistic missiles to destroy naval targets.

Only one other country has done this before - the Soviet Union during the "Cold War". It is no wonder that the Americans are very concerned with the regular quarrels between China and its major allies. Construction of a naval base on Hainan Island does not add confidence to the U.S. The proximity to the Malacca Strait poses a threat to the smooth supply of Washington's main allies in the region - Japan, South Korea and Taiwan - this is the way the US sees the situation. The American senators have already decided that such behavior is a threat to Beijing's regional peace and stability, economic development and even "food security". The international community is well aware what usually follows such wording.

‘No commission paid for purchase of submarines’

KUALA LUMPUR: No commission payments were made directly or indirectly to any company for the purchase of the Scorpene submarines by Malaysia or sale of classified documents connected to the deal, said Defence Minister Datuk Seri Dr Ahmad Zahid Hamidi.

“The procurement of the submarines were made via direct negotiations in line with the guidelines of government procurement and French and Spanish manufacturers, with the agreement of the respective governments,” he said.

He said the ministry did not have any information on the allegations of documents claimed to be classified by Hong Kong-based company Terasasi to Thint Asia (Thales International) for the alleged sum of 36mil (RM143.6mil).

Zahid said Malaysia had been made to understand that there was no trail in France over the submarine issue and as such would not apply to be observers for the “Tribunal deGrande Istance”, the French court.

He also said that there was no need for the setting up of an independent commission to probe the purchase of the vessels as it was done in accordance with procedures.

He said that there was no need for the establishment of a Parliamentary Permanent Select Committee for Defence as plans for the procurement formed part of the Budget tabled and passed in Parliament.

Deep and Dirty: Malaysia's Submarine Scandal

Leaked prosecution documents show a pattern of official misdeeds in two countries

A two-decade campaign by the French state-owned defense giant DCN and its subsidiaries to sell submarines to the Malaysian ministry of defense has resulted in a long tangle of blackmail, bribery, influence peddling, misuse of corporate assets and concealment, among other allegations, according to documents made available to Asia Sentinel.

View the Documents Here

Some of the misdeeds appear to have taken place with the knowledge of top French government officials including then-foreign Minister Alain Juppe and with the consent of former Malaysian Prime Minister Mahathir Mohamad, according to the documents, comprising 133 separate files and hundreds of pages. They were presented to the French Prosecuting Magistrate at the Court de Grand Instance de Paris in May and June of 2011. French lawyers have begun preparing subpoenas for leading Malaysian politicians including Prime Minister Najib Tun Razak, the current Defense Minister, Ahmad Zaki Hamad and several other figures.

The documents were sent anonymously to Asia Sentinel via a circuitous route that took them to Brussels, Belgium; Lagos, Nigeria; Brazzaville,Congo; Libreville, Gabon; then to Leipzig, Germany and finally to Hong Kong. The documents, written in French, can be found in a collection in Asia Sentinel's Scribd account.

The documents were compiled as a result of a raid on April 7, 2010, when scores of investigators from the anti-organized and financial crime unit of the French Directorate of Judicial Police swooped down on DCN’s offices at 19 rue du Colonel Pierre Avia in Paris’s 15th Arondissement, and four other locations, demanding that stunned officials give them access to safes, files and computers. They collected thousands of documents that form the bulk of the files delivered to Asia Sentinel.

Together, they present a damning indictment of Malaysian officials whose goal was to steer a €114.96 million (US$114.3 million at current exchange rates) payment through a private company called Perimekar Sdn Bhd, wholly owned by Abdul Razak Baginda. Razak Baginda was then the head of a Malaysian think tank called Malaysian Strategic Research, which was connected with the United Malays National Organization, the country’s biggest political party.

The payment appears to have been in violation of the OECD Convention on Bribery, which France ratified on June 30, 2000. On Sep. 29, 2000, according to document D00015, DCNI, a DCN subsidiary, “took corrective actions” after France joined the bribery convention. Contracts concluded after that date were to be routed to Eurolux and Gifen, companies held by Jean-Marie Boivin, DCN’s former finance chief, and headquartered in Luxembourg and Malta respectively Boivin is being investigated for having played a central role in the “corrective actions,” with what were described as “outlandish commissions” traveling through the welter of companies that he established in tax havens around the world. Among the documents is one that shows Boivin paid to send Razak Baginda on a jaunt to Macau with his then-girlfriend, Altantuya Shaariibuu, a Mongolian national who was later murdered by two of Najib’s bodyguards.

“A separate agreement sets other compensation consisting of a fixed amount independent of the actual price of the main contract,” one document reads in reference to the payment to Perimekar. “This has been made to be consistent with [DCN’s] internal rules and [its subsidiary] Thales and those of the OECD. The beneficiaries of these funds are not difficult to imagine: the clan and family relations of Mr. Razak Baginda. In addition, these funds will find their way to the dominant political party." Malaysia’s dominant political party was and is UMNO.

Malaysian Defense Spree

The story in essence began when Najib Tun Razak was appointed defense minister in Mahathir’s cabinet in 1991 and embarked on a massive buildup of the country’s military, arranging for the purchase of tanks, Sukhoi jets, coastal patrol boats – and submarines. That kicked off a stiff competition between French, German, Swedish, Russian and Dutch manufacturers, who in turn went looking for the most effective cronies of the Malaysian leadership to help them out. By 1995, according to document DC00078, DCN’s subsidiary Thales was losing out to the German manufacturer Kockums AB, which was represented by Amin Shah, dubbed “Malaysia’s Onassis” because of his business and shipping interests, who was close to then-finance minister Daim Zainuddin and was suspected of being a front man for Daim’s interests.

French authorities seemed to counter by paying a “consultancy fee” according to a handwritten document called a "Consultancy Agreement” signed in Kuala Lumpur on Oct. 1, 1996 between DCN International representative Emmanel Aris and a Malaysian Army major named Abdul Rahim Saad. The purpose was “to reintroduce DCNI in the short list of tenders after it was rejected by the Government of Malaysia” on Dec. 14, 1995, according to the French documents.

The remuneration was to be paid in two lots, US$20,000 before Jan. 31, 1996, and US$80,000 after acceptance. Apparently it was successful. Rahim is now managing director of a company called ARS Sehajatera Sdn Bhd., which supplies logistical equipment to the Malaysian armed forces.

However, there are questions whether Rahim was ever paid. A memo found in the DCN files said he “expresses discontent and proclaims his support for the Agosta [the Spanish manufacturer of the Scorpenes for DCN] submarines since 1996 but he ‘has not had any news from DCNI to date.’ He says he organized shady activities to promote the French bid…He complains of not having been paid for his services.”

Eventually, according to the documents, Amin Shah began to lose his influence with the government after Daim Zainuddin left his position as finance minister. DCN and its subsidiaries began casting around for other sources of influence within the Malaysian government.

An attempt to woo Tan Sri Razali Ismail, one of Malaysia’s most distinguished diplomats, failed. “It was ultimately unsuccessful and Mr. Abdul Razak Baginda was chosen in his place,” the documents note. “The role of the latter was to facilitate the submission procedure to the Malaysian government and the responsible ministers, in particular the Minister of Defense, with whom he claimed to have a close relationship.”

According to Document D000112, “…Razak Baginda has maintained excellent relationships with the Defense Minister and Prime Minister. Moreover, his wife, Mazlinda Makhzan, is a close friend of the Defense Minister’s wife. Thus, Baginda has become the center of the network. Both companies are at the center of this network: Terasasi, related to Baginda, and Perimekar, which was initially controlled by Mohamad Ibrahim Mohamad Nor,” who was also close to Daim Zainuddin. However, with Daim stepping down as finance minister after a spat with Mahathir, Razak Baginda took over sole proprietorship of that company through his wife.

“The major defense contracts in Malaysia as in other countries require substantial money transfers to individuals and/or [political] organizations,” the document noted. “In Malaysia, other than individuals, the ruling party [UMNO] is the largest beneficiary [rather than Perimekar, the company to which the commission was directed]. Consultants [agents or companies] are often used as a political network to facilitate such transfers and receive commissions for their principals.”

The Heart of the Deal

Over the next few years, the documents show, as the contract came closer to fruition Razak Baginda and Najib maneuvered in France to get the best possible deal for themselves and UMNO, establishing a tangle of companies through which funds would ultimately pass.

Their activities included the founding of several companies including Perimekar in 2000 as a vehicle to funnel the €114.9 million commission to Razak Baginda and others, with Razak Baginda’s wife the principal shareholder. The plan appears to have had the approval of Mahathir. A diplomatic cable to Foreign Minister Juppe said, “The company chosen by the government for the submarine project is…Perimekar. This choice is the subject of an official notification from the Malaysian Ministry of Finance to the Ministry of Defence... Note that this decision of the Ministry of Finance was taken while the Prime Minister himself held the post of Minister of Finance, after the departure of Tun Daim.”

The French company appears to have had no illusions as to Perimekar’s function. Documents note that “Perimekar was a limited liability company with a capital of MR5 million (€1.4 million) of which 1 million is available. It was created in August 1999 … it has no record of sales during 2000. Its ownership is in the process of restructuring.”

As Asia Sentinel has previously reported, document D00087 shows that Najib demanded a US$1 billion “condition” for Perimekar Sdn Bhd’s “stay in France.” The notes, however, don’t make it clear exactly what that means. The information is contained in a note faxed from Francois Dupont, the Asian representative of Thales International Asia, to his bosses but the notation in the documents presented to the court doesn’t elaborate. Dupont indicated that a meeting with Najib on July 14, 2001 would take place with the above mentioned “condition” but it was not known if the meeting transpired.

Along the way, Jasbir Singh Chahl, one of Razak Baginda’s associates at Perimekar, decided he hadn’t been paid enough. In several memos to DCN, Jasbir Chahl demanded a full fourth of Perimekar’s total €114.96 million. Despite several demands, there is no indication that Chahl has ever been paid. He has been subpoenaed as a witness in the case, but after first indicating to French lawyers that he would cooperate, he has since said he knows nothing of the affair. He is said to be extremely ill and suffering from some form of cancer.

Other documents made public by Asia Sentinel earlier show that at least €36 million flowed from the DCNS subsidiary to Terasasi Hong Kong Ltd., whose principal officers are listed as Razak Baginda and his father. Najib was defense minister from 1991 through the time when the submarines were delivered in 2002. Terasasi only exists as a name on the wall of a Wanchai district accounting firm in Hong Kong.

Malaysia to extradite Iranian accused of plotting to attack Israeli targets abroad

Iranian man accused of plotting to bomb Israeli targets in Bangkok in February denies any involvement in terrorist organizations; court rules to extradite the man to Thailand.

Injured man lies on the ground after a bomb he was carrying exploded, in Bangkok February 14, 2012

A Malaysian court ruled Monday that an Iranian man accused of plotting to attack Israeli targets in Bangkok must be extradited to Thailand. Masoud Sedaghatzadeh said he planned to appeal the decision. He is not expected to be immediately deported.

Sedaghatzadeh was arrested at a Malaysian airport soon after an apparently accidental explosion rocked a Bangkok neighborhood on Feb. 14. Bombs were found at the house, where the explosion occurred, and Thai police say Sedaghatzadeh, and two other Iranian men now in Thai custody, had been seen leaving the house. Thai officials have said Israeli diplomats may have been the targets of the alleged plot.

A Kuala Lumpur district court on Monday ruled in favor of the Malaysian government's bid to deport Sedaghatzadeh to the Thai capital. Sedaghatzadeh has 15 days to file an appeal, said his lawyer, Nashir Hussin.

Malaysian prosecutors have said the Iranian was wanted by Thailand on suspicion of "taking part in making and possessing an explosive device" as well as causing an explosion that led to human injuries and property damage. He faces life in prison if convicted in Thailand.

Israel has blamed Iran for the explosions, which wounded five including one of the alleged bombers, as well as two incidents the day before: a bombing in India that wounded an Israeli diplomat's wife and driver, and an attempted bombing in the former Soviet republic of Georgia. Iran has denied involvement.