MIC’s subservient and self centered support for UMNO has eroded the basic human rights of Malaysian Indians

Deputy Minister in the Prime Minister’s Department Datuk S.K. Devamany supported the proposed race Relations act by referring to incidences such as the Kampung Jawa temple demolition and the Interlok novel controversies which have been could have been avoided. He further added we must understand that Malaysia is a multiracial country and we want to preserve unity in main stream newspapers. The examples Devamany gave seem to be puzzling. Is the Race Relations act just to avoid minorities and victims from voicing their grievances?

Race Relation Act is needed to eliminate racial discrimination in public and private sector employment, entrance to university and matriculation levels, open tender in government procurements and providing equal opportunities in employment.  At the same time, the government needs to set up a Race Relation Commission which is made up of all races in Malaysia.  This act will also outline the mechanics and methodology in implementing the Race Relation Act.

Instead of giving the above mentioned reasons for supporting Race Relations Act, Devemany is giving the examples of Kampong Jawa temple breaking and interlok novel as reasons why Malaysia needs a race relations act. The Sri Maha Mariamman Temple, along with the squatter settlement of Rimba Jaya, was demolished in 2007 by the then BN-led state government as part of its Zero Squatter programme. The kampong Jawa temple breaking in November 2007, infuriated the Indian community to revolt against the BN government which lead to the loss of 5 states to PR and the denial of 2/3 majority in parliament. The introduction of interlok novel upsets and irked Malaysian Indian parents who persistently campaigned against the novel till the government withdrew as school text book.

Before introduction Race Relations act the government must remove all discriminative policies and practices. All race based political parties must be disbanded. All higher education institutions for exclusively one race must be converted into multi racial institutions where students of different backgrounds meet and mingle with each other. Without preparing the ground for such open and inclusive interactions amongst all Malaysians, race relation act will be another peaceful assembly act.

From the incidences referred by Datuk Devemany, as reasons for introducing race relations act, the intent and purpose of Malaysian race relations act looks sinister and restrict Malaysian human rights and not to provide equal rights. With MIC henchmen like devemany around UMNO will wipe out what ever little space the minorities have.  Malaysian Indians must resolve to wipe out MIC from the political scene once and for all to redeem their dignity and pride as citizens of this country.

Senator S. Ramakrishnan

REVIEW - An Analysis of Malaysia’s 12th General Election

1.    Introduction

In our pre-election analysis, we estimated that the Opposition parties will win about 50 parliamentary seats and face a very strong challenge from DAP-Keadilan in Penang. We also warned of the strong wind blowing in the Indian and Chinese communities towards the Opposition. We did not and could not then anticipate the equally strong wave of Malay support for the Opposition which resulted in the Opposition gaining 82 seats in Parliament, denying the Barisan Nasional of its two-thirds majority, the first time since the May 1969 General Election. We had in our pre-election analysis noted the possibility of a divided outcome with a strong Malay government against a strong non-Malay Opposition. However, this did not materialize as Malay support for the Opposition was also strong resulting in multi racial Keadilan winning 31 seats and PAS 23 seat in Parliament. In fact, the popular votes obtained by UMNO (35.5%) and combined PAS/Keadilan (34.8%) was almost equal. Whilst the loss of Penang state to the Opposition did not come as a surprise after the first week of campaign with massive turnout at DAP ceramahs and large donations collected on the spot for the DAP candidates, the fall of Perak and Selangor was totally unexpected. What happened? What caused the massive swing?

Some facts on the 12th General Election should be noted and analysed. The Barisan Nasional within Peninsular Malaysia failed to obtain a majority of popular votes cast. It only obtained 49% of the popular votes in Peninsular Malaysia whereas the Opposition had the majority of popular votes – 51%. UMNO won 35% of popular votes against 34.8% won by PAS and Keadilan. Although the Barisan Nasional won 140 seats in Parliament, 54 seats came from Sabah and Sarawak. So, without Sabah and Sarawak, Barisan Nasional will not have even obtained a simple majority in Parliament. If the Federal Territory was to be considered as a state, the Barisan Nasional actually lost 6 states. In Negeri Sembilan, it survives with only a 4-seat majority. In Pahang, Barisan Nasional even lost the state capital, Kuantan. Even the Barisan Nasional fortress of Johor was successfully penetrated by the Opposition this time with both DAP and PAS winning seats. There are no safe bastions for Barisan Nasional anymore.

Although, the Chinese and Indian votes have decisively swung to the DAP and Keadilan, causing MCA, MIC and Gerakan to lose massive support, it was totally unexpected for UMNO to lose in urban and semi-urban Malay seats like Titiwangsa and Lembah Pantai (in Kuala Lumpur city), Shah Alam, Hulu Langat, Kuala Langat, Kuala Selangor, Gombak, Ampang, Sungei Petani, Merbok, Kulim, Nibong Tebal, Balik Pulau (in Penang), Parit Buntar and Bagan Serai in Perak. Barisan Nasional even loss Kuantan – the capital of Pahang and Indera Mahkota. With increasing urbanization with the urban population projected to increase to 73% in 2020, up from 62% in 2000, can UMNO prevent a slide in urban Malay votes? What made the urban Malays desert UMNO? This question needs to be addressed. For the MCA and MIC, it was clearly their worst ever electoral performance ever. In 1969, MCA won 13 out of 24 seats contested (54%), whereas this year MCA only won 37.5% of parliament seats contested. Gerakan was totally wiped out in Penang – its stronghold. The DAP campaigned that a vote for MCA or Gerakan is a vote for UMNO to capitalize on the anger of the Chinese community over UMNO. Hence, the track record of MCA and Gerakan was ignored with an emotional swing against UMNO.

2. What the Election Results Mean

Several broad conclusions can be drawn from the 12th General Election:-

(i) It is a seismic shift in Malaysian politics. A political tsunami as the Star headlines said. The old ways of campaigning may no longer work. Putting fear into voters minds did not work. The use of mainstream media to create spin or to demonise the opposition was detested by urban voters and had a counter-effect instead. From feedback, many urban voters were turned off by the spin especially in NST and Star.


(ii) The victory of DAP, Keadilan and PAS in many areas showed that voters do not buy the argument that the Chinese won’t support PAS and DAP won’t get Malay votes. As Dr. Farish Noor reported from the PAS Headquarters in Kota Baru on Saturday night (polling night), Kelantan PAS supporters cheered when the DAP gained control of Penang. So the notion Malays won’t support DAP was debunked that night in Kota Baru.


(iii) Makkal Sakhti (People Power), the cry of HINDRAF, caused a tidal wave of support from the Indian community towards the opposition. This seismic shift of Indian voters contributed to the defeat of many Barisan Nasional candidates, not only MIC candidates.


(iv) The Barisan Nasional’s brand of race-based politics is no longer an attractive proposition to voters. Chinese voters deserted MCA and Gerakan. Indian voters swung away from MIC. Many Malay voters switched to Keadilan, making Keadilan the biggest opposition party with 31 parliament seats. The Opposition parties won, not on race-based issues but across a range of issues that cuts across ethnic lines. The MCA and MIC lost whilst trying to portray themselves as defenders of their race. UMNO lost ground to Keadilan even with Anwar calling for an end to NEP. Is this then, a new paradigm for Malaysian politics that Malaysian voters are more taken in by wider national issues such as corruption, crime, cost of living, social justice and human rights which cuts across all ethnic groups rather than narrow ethnic issues that favour any particular race? Even MCA championing the cause of Chinese schools didn’t get much support from the Chinese community. But, PAS delivered votes to DAP and Chinese voters supported both PAS and Keadilan. Should MCA remain purely a Chinese party when it lost more Chinese votes to the DAP or should it become a multi-racial party and widen its appeal to non-Chinese? This has set the stage for a new era of multi-racial politics in Malaysia, perhaps the beginning of a two-party system which is healthy in any democracy.


(v) The loss of Penang, Kedah, Selangor and Perak can perhaps be partially attributed to complacency in the Barisan Nasional camp. Over-confidence in a proven track record may be another factor. In Penang, the non-Malay voters were unhappy with Gerakan for being unable or unwilling to stand up to UMNO. However, the Opposition’s ability to capture, in particular, Penang and Selangor, the jewels in the crown so to speak, and even Perak to a lesser extent, will enable DAP and Keadilan to attempt to provide a new model of governance, which if they succeed, could further strengthen their grips on these states in the next General Elections and extend their support in other states like Negeri Sembilan (remember earlier point: Barisan Nasional only have 4 seat majority in Negeri Sembilan). However, if the DAP and Keadilan mess up, they will lose their opportunity and the voters in the 3 states Penang, Perak and Selangor may revert to the Barisan Nasional. It is however, unlikely DAP and Keadilan will squander their chance. It is left to be seen if the new State Governments in Penang, Perak and Selangor can deliver. If so, expect them to control these states for at least two terms if the state governments are administered well with good governance, accountability and transparency.


(vi) The point has also to be made that never in the history of Malaysia has the Prime Minister ever lost his own home state. In Penang, UMNO/Barisan Nasional only retained 2 parliamentary seats, that of the Prime Minister and Second Finance Minister Tan Sri Nor Mohamed Yakcop. The 12th General Election by any reckoning is UMNO’s worst-ever performance, worse than in 1969 and 1999.

3. What Caused the Swing to the Opposition

The political tsunami was brought about by various factors, foremost of which is the perceived arrogance of power. All racial groups – Malays, Chinese and Indians have the perception that the Barisan Nasional did not hear or listen to the voice of the people. The Barisan Nasional mishandled the Bersih and HINDRAF protests. This show no tolerance for public assemblies and no outlet for grievances which resulted in the aggrieved parties voting against the Barisan Nasional in the ballot boxes. The Barisan Nasional’s over-confidence and poor intelligence failed to identify growing anger and frustration of the people. The Prime Minister’s challenge to Opposition supporters not to demonstrate but to take it to the ballot box also made many fence sitters and opposition sympathizers to vote for the opposition. The Barisan Nasional failed to effectively read the mood on the ground. Many urban voters in particular the fence sitters were put off by the propaganda, spin and one-sided coverage on TV and in NST and Star.

A contributory factor could be internal bickering over the choice of candidates within the Barisan Nasional component parties not only in UMNO but also in MCA and Gerakan. Apart from the above, other factors also contributed to the unprecedented swing in support to the Opposition. These can be attributed as the 9C’s:-

(i)                 Change : A massive mood swing brought about by the opposition’s promise of change and reform.

(ii)                 Crime : Growing anger at the seeming inability of the Federal Government to tackle crime effectively.

(iii)               Cost of Living : Rising frustration over increases in the cost of living.

(iv)              Corruption : Growing perception that corruption has worsened over the past four years. (v)               Courts : Disgust over the Lingham enquiry and concern about judicial independence.

(vi)              Convergence of Issues : All these issues coming to a head at the same time and perception that government is not listening or effectively addressing them. There is really no one single big issue but a convergence of issues that caused people to be dissatisfied and angry with the Barisan Nasional.

(vii)             Communications Technology : The power of the internet and blogs to provide alternative information, that is downloaded, printed and distributed even to kampungs and new villages. With the spin in NST, more people trust the blogs more than the mainstream media.

(viii)            Credible Leadership : For the first time, the Opposition was able to present credible leadership and credible alternatives. The Anwar factor is pivotal. More than the 1998 reformasi campaign this year is much more an Anwar-coordinated campaign. DAP, Keadilan and PAS put up young, credible candidates. Lim Guan Eng, a Monash economics and accounting graduate, taking charge of Penang instead of his father Lim Kit Siang provided a younger and less belligerent face to the electorate backed by credible candidates like Prof. Ramasamy, Lim Chin Tiong and Jeff Ooi.

(ix)              Campaign Strategy : The Barisan Nasional’s campaign strategy was much of the same. The old school approach – some carrots and sticks. It offered development on the one hand, it threatens on the other, warning the Chinese and Indian communities that they will have no representation in government. The Chinese and Indian voters didn’t buy this argument this time. At one point in Penang, feedback from many Chinese voters is they don’t mind not even having a Chinese Chief Minister to teach the Barisan Nasional a lesson. Promises and fear didn’t work this time. UMNO also took Malay voters for granted. On the other hand, the Opposition’s strategy was low-key, humble and non-threatening. PAS didn’t speak of an Islamic State. DAP didn’t campaign to capture Penang as was the case during Tanjung I, II and III. All DAP asked for was to deny Barisan Nasional two-thirds majority both in Penang and in Parliament. This softer approach compared to Kit Siang’s aggressive style in 1990, 1995, 1999 won DAP many sympathetic votes. The use of blogs as alternative media was also highly successful.

For the Chinese voters, memories don’t fade easily. Often politicians tend to think people have short memories. But the Chinese voters are still upset and aggrieved over the waving of the keris incident at UMNO Youth Assemblies and the racial rhetoric in the 2006 UMNO General Assembly. Chinese voters also perceived MCA and Gerakan to be too subservient to UMNO. For the Indian voters, HINDRAF was a key factor. The power of Makkal Sakhti (People’s Power) is real and translated into votes for the Opposition throughout the country where there are sizeable number of Indian voters. For Malay voters, Anwar provided an alternative leadership. He read the Malay mood well. To the Malay voters in Anwar’s campaign speeches, the NEP because of its over-obsession with Bumiputra equity, benefitted only UMNO Puteras and didn’t benefit the ordinary people in the rural heartland. UMNO Youth was also perceived to be brash and arrogant.

4. Looking Ahead

What the 12th General Election provided is a timely wake-up call to all political parties. They need to change, reform and deliver. For the Barisan Nasional, it means reinvention to stay relevant. For the Opposition in control of the 5 State Governments, it means the need to deliver what they promised. Can they work together? The question, looking ahead, is how UMNO will react. Will it be magnanimous and learn the right lessons? Will it change and reform from within and lower racial rhetoric to win back non-Malay support or will it up the ante to become even more ultra-Malay to retain whatever Malay support it still has? Will UMNO remain united and cohesive or will there be a scramble for positions in its coming General Assembly and party elections? The internal dynamics in UMNO in the lead up to party elections need to be watched.

For the Opposition, the key question is whether the new State Governments in Penang, Perak and Selangor can perform and deliver and meet the expectations of the people? Will there be a witch-hunt against Barisan Nasional supporters? Will they be able to cooperate and work closely together? Will they gain the support of civil servants? Will they be able to cooperate and work with the Federal Government? What will be the impact on Government-Linked Companies controlled by or connected to these state governments? For the MCA and MIC, the question is whether they should continue to narrowly fight for Chinese and Indian interests or should they reinvent themselves to become multi-racial parties like DAP and Keadilan and champion wider national issues such as corruption, human rights, judicial independence and economic opportunities.

For the Gerakan and PPP, the key question is whether they should continue to exist and if so, what is their niche in Malaysian politics? Should they bring about the merger of smaller parties in the Barisan Nasional including those in Sabah and Sarawak? Will the 2008 Election lead to the emergence of a two-party system in Malaysia? For the Prime Minister, this is an opportunity to clean house. To listen more to the voice of the people and not to be disconnected to the feelings on the ground. We have in Pak Lah a decent man, a dedicated and pious Muslim. He should use his strength to reinvent himself and renew UMNO and Barisan Nasional. Credit ought to be also given to the Prime Minister for providing more democratic space and a fairer, freer election as well as for his stoic acceptance of the democratic voice of the people, and for not reacting ala the midnite snatch in Sabah in the mid-1980’s or having an Operasi Lallang or May 13/NOC type reaction. There is clearly a need to review certain National Policies that causes unhappiness and decisiveness. Will the Barisan Nasional leadership, be able, perhaps more willing to rise to the occasion to bite the bullet?


In the final analysis, despite the massive swing to the opposition, the Barisan Nasional still remained in office at Federal level and has a comfortable majority to provide continuity and political stability. This analysis provides some key facts and pose some key questions that need to be pondered over in the days and months ahead. Whatever it is, Malaysian politics post March 8, 2008 will not be the same again. It is time for a new beginning. A new era has begun. More importantly, to note that the morning after, most surveys showed that many Malaysians from all races and different walks of life felt good over the election outcome. Dated: 13th March 2008





By Asli

Najib's Pastoral Picture of Malaysia

Despite the prime minister's speech to the UN, his country is facing serious racial tension

Malaysia's Prime Minister, Najib Tun Razak, made an eloquent speech to the United Nations earlier this week, telling the assembled body that, among other things, Malaysia "is a multi-racial, multi-religious, multi-cultural and democratic society that has benefited from the positive interaction and synergy between the various communities. Mosques, temples, churches and other places of worship co-exist in harmony.
"Although Islam is the official religion, we honor other religions – Buddhism, Christianity, Hinduism – by making their religious and cultural celebrations as national holidays and celebrate them as national events. It is this equilibrium that leads to moderation or wasatiyyah in the Islamic tradition of mutual justice."

That picture of Malaysia, thought to have been crafted by the giant US public relations firm APCO Worldwide for delivery in New York, is badly frayed, however. Many people in Kuala Lumpur say racial tension is higher than it has been since 1987, when former Prime Minister Mahathir cracked down in the so-called Operation Lalang and threw lots of top opposition politicians in jail under the Internal Security Act, which allows in effect for indefinite detention without trial.

Political events since the 2008 general election have led to ever-rising tension, particularly between Malays and Chinese although there have been strains in the Indian community as well. It is unclear today how far down into the society that racial bitterness extends. On many occasions, the two races have worked together to attempt to calm racial tensions. Last year, when unknown vandals firebombed a Christian church in a Kuala Lumpur suburb, urban Malays went to the church to attempt to calm anger.

Najib's attempts to unify his country are facing deep problems, many of them caused by former Prime Minister Mahathir Mohamad, who has taken on the question of special rights for the Malay majority and played a major role in the development of a Malay superiority NGO called Perkasa, whose fiery leader, Ibrahim Ali, has been perceived as a Mahathir ally although he is an independent legislator.

"Perkasa's vocal spokesmen Ibrahim and Mahathir seem hell bent – through such vociferous bickering – to stop Prime Minister Najib Razak from implementing his New Economic Model which is supposed to liberalise the economy from the clutches of the economically stifling, much corrupted and skewed New Economic Policy that heavily plays on 'Malay rights," wrote Raja Petra Kamarudin, the editor of the influential blog Malaysia Today.

"The problem is a segment of the Malays fear what is needed to revive private investment, especially domestic private investment, could cause Najib to lose the general election," said an analyst with a Kuala Lumpur-based think tank. "This assumes that the Malay electorate would be hostile to policy measures to ameliorate the NEP's re-structuring objectives. Najib has said this will now be applied on nationally rather than on a company basis while continuing the focus on reducing poverty.  Perkasa's strength comes from its linkage with Mahathir who still commands some support in Umno and among the Malay community. Undoubtedly, Malays who feel threatened by prospect of less contracts etc from the Government will be hostile to Najib's economic plans."

The Sept. 27 death of another lawmaker, Parti Islam se-Malaysia state assemblyman Che Hashim Sulaima, will kick off the 12th by-election since the 2008 electoral surprise that gave the opposition control of four states and shocked the ruling Barisan Nasional. The United Malays National Organisation is expected to pull out all the stops in going after the Kelantan seat. With the Islamic fundamentalist PAS in the unanticipated role of positioning itself as a moderate party seeking to attract non-Malay votes, it remains to be seen if UMNO will attempt to appeal to voters by emphasizing Malay superiority.

Mahathir has been fanning the flames of unrest by his continuing demand for the continuation of special treatment for Malays, a cause he has espoused ever since the publication of his book, The Malay Dilemma. In that book, Mahathir argued that because Malays were rural and backward and because the economy was controlled by urban Chinese, they needed special treatment. After disastrous racial riots in July of 1969, the government agreed with Mahathir and created the New Economic Policy, in affect an affirmative action program for a majority race. For 40 years, they have been given that special treatment but they have advanced relatively little vis-à-vis the Chinese. Today, social scientists argue that affirmative action to help the Malays has been a crutch that has cushioned their lives and kept them from healthy competition.

But changing that policy is messing with a powder keg. Rallies against changing it have drawn thousands of angry Malays. Mahathir fanned the flames considerably by lending his public support to a Malay superiority rally in Terengganu on May 13, the anniversary of the 1969 race riots that took hundreds of lives. The octogenarian former leader has not broken with Najib, partly out of his loyalty to Najib's father, who reinstated him in politics after he was expelled from UMNO following publication of his book. But he continues to demand special treatment for Malays. In his blog, Che Det, on August 30, he wrote that the leader of the Chinese Economic Congress was racist for calling for a meritocratic society.

"It is racial because he was advocating taking away the protection afforded by the NEP and quotas from the bumiputeras (native Malays) and not from any other race," Mahathir wrote. "I am not proud of the protection afforded the bumiputera. It implies weakness. I don't think Malays and other bumiputera like to think that they are inferior in any way. But the reality is that in Malaysia the bumiputeras need new skills and a new culture even. These cannot be had by them in a mere 20 years. The original planners of the NEP were too optimistic."

Najib hired the US public relations firm APCO to come up with a US$40 million program to seek to pull the races together as well as to seek to burnish his own image overseas, tarnished as it has been by a long series of scandals. The program, called 1Malaysia, is considered by most people to have failed.

Despite the fact that the special rights have become a millstone around their neck instead of moving them into a higher income bracket. Especially, critics say, it has created a rentier class of so-called "Umnoputras" who skim off contracts through government–linked companies to enrich themselves and that little of the benefit trickles down to the rank and file

When Najib took office in April 2009, he started seeking to modify the program, called the New Economic Policy. That has led to continuing tension. In May, some 1,500 members of the Malay Consultative Council, a group of 76 Malay-rights organizations, summarily rejected Najib's plans to replace it with what the premier called his New Economic Model.

At the forefront of the protest against Najib's plans has been Ibrahim Ali, who has not only threatened non-Malays but launched a series of attacks on moderates. Among other things, Ibrahim has sought to have top officials including Chua Soi Lek, the president of the Malaysian Chinese Association – the second biggest component of the Barisan Nasional after the United Malays National Organisation – arrested for sedition, basically for talking back at him. He has demanded also that shariah laws be amended to prohibit non-Muslims from entering mosques and prayer rooms – which they have done traditionally. He has also demanded that Nurul Izzah Anwar, an MP and opposition leader Anwar Ibrahim, be jailed as well after Nurul accused Mahathir of inciting racial animosities.

Asia Sentinel.com

Closing the Books on Murder in Malaysia

The episode of a sensational killing of a Mongolian translator appears to be about finished

The closing of a case earlier this week by Malaysia's attorney general over allegedly false statements by a private investigator that tied Prime Minister Najib Tun Razak to the 2006 murder of Mongolian translator Altantuya Shaariibuu literally lets unknown persons close to the prime minister get away with murder.

The closure of the case appears to write the final chapter in one of Malaysia's most sensational murder cases, one involving a gruesome death, intrigue in high places, more than 100 million euros in alleged bribes and a trial that appeared to be rigged to keep prosecutors as far as possible away from Najib, then the deputy prime minister, and his wife, Rosmah Mansor.

The private investigator, P Balasubramaniam, was hired in 2006 by Abdul Razak Baginda, one of Najib's best friends and a defense analyst from the Malaysian Strategic Research Centre think-tank, to attempt to keep Altantuya away from Baginda because he had jilted her. She was demanding revenge and US$500,000 for her role as a translator in the sale of French submarines to Malaysia. A French prosecutorial team continues to probe the sale of the subs to Malaysia and whether kickbacks were paid to top French and Malaysian politicians.

In July of 2008, as the trial droned on, Balasubramaniam issued a statutory declaration alleging that Najib, then the deputy prime minister, was involved in the murder, only to retract the entire contents of the declaration a day later and issue a second saying he had made the first under duress (Note: Both declarations can be found here).

Balasubramaniam's lawyer, Americk Sidhu, denounced the closing of the case, saying that if the supposedly false statements were investigated thoroughly by police, they would have led to the conclusion that people close to Najib were involved in the murder.

De facto Law Minister Nazri Aziz, in a written statement to parliament, said the case was closed because Balasubramaniam had given conflicting statutory declarations, and that anyway, they didn't affect the trial of two of Najib's personal bodyguards and Abdul Razak Baginda, which ended in April of 2009 after a 159-day trial in which the bodyguards were sentenced to death. They are appealing the verdict, with suspicions running high that they will somehow be given their freedom in exchange for their silence on whoever ordered them to kill the woman.

"Although there are contradictions between the two statutory declarations, the contradictions do not affect the outcome of the trial of Altantuya," Nazri said. "Moreover, the individual (Balasubramaniam) is still believed to be abroad." Nazri added that the decision to close the case was made after "careful consideration" of the results of the police probe and witness statements.

Although the two bodyguards were convicted of the crime, Baginda was acquitted under controversial circumstances without having to put on a defense. He then hurriedly left the country for England, where he has remained ever since. One of the two bodyguards said in a cautioned statement that they had been hired to commit the killing and were to be paid RM100,000 to do it. But the statement was never introduced into the marathon trial and never was anybody asked who had done the hiring or made the payment offer.

The 27-year-old Altantuya, the translator in some phases of the billion-dollar purchase of French Scorpene submarines that netted Baginda's company €114 million in consulting fees, was shot in the head and her body was blown up with explosives in a patch of jungle near the suburban city of Shah Alam. Before she died, she told Balasubramaniam she had been promised US$500,000 for assisting in the submarine transaction.

In the bodyguard's cautioned statement, it emerged that Altantuya, almost with her last words, told her two assailants that she was pregnant and begged them not to kill her. That has led to speculation that her body was blown up with C4 explosives to hide any DNA evidence of who the father might be.

Balasubramaniam, who remains somewhere in Chennai, has continued to insist loudly that Razak Baginda, who is married, had told him that the translator had been Najib's sexual companion before the then-deputy prime minister passed her on to Baginda because it wouldn't look good for a prospective prime minister to have a girlfriend.

After making the first declaration, Balasubramaniam was hauled into a Kuala Lumpur police station, where he was forced to recant it in a second under threat to his family, he later testified. After that, according to statements he made under oath, he was taken to meet with Mohamad Nizam Razak, Najib's brother, and Deepak Jaikishan, described as a "business associate" of Najib's wife, Rosmah Mansor, where he was promised RM5 million to leave the country and shut up. He later displayed cancelled checks showing he had been paid RM750,000 out of an account maintained by Jaikishan. According to his sworn statement, Balasubramaniam said Rosmah was "very pleased" that he had agreed to retract the statutory declaration and wanted to have breakfast with him.

Nazri told the parliament that Balasubramaniam was initially investigated for providing false statements, which would make him liable to three years in jail and a fine. That makes it a mystery why the case was dropped against him, since one of the statutory declarations was demonstrably false – either the one implicating Najib and describing the murder, or the one recanting it.

A team from the Malaysian Anti-Corruption Commission first made an appointment to interview Balasubramaniam in the UK, where he was staying out of fear for his safety, but cancelled the appointment without an explanation.

"The evidence is staring you in the face," Sidhu said in a telephone interview from Australia. "A whole pile of witnesses can confirm the first statement and who have been investigated by the police have said the original statement was made of his own free will. If they had investigated, they would have had to interview Rosmah, Nizam and Jaikashan over the checks to Bala.They can't afford to charge him. If they do that, they would hang themselves. They had no alternative but to close the file to save Najib and his entourage."

To say Balasubramaniam's first statement was explosive is an understatement. In addition to saying Najib had been Altantuya's lover before he turned her over to Razak Baginda, Balasubramaniam wrote that Najib had a sexual relationship with the Mongolian woman and that she liked anal sex. Before she was killed, according to the statement, she told Balasubramaniam that she, Baginda and Najib had been together at a dinner in Paris during the transaction over the submarines.

Najib has repeatedly denied he had ever met the woman, swearing to Allah that no meeting had taken place. During the trial of the two elite bodyguards, a friend of Altantuya who had accompanied the woman to Malaysia said there was no record in immigration that she had ever been in the country. 

Asia Sentinel.com 

Looking beyond Maika.....

THE curtains are being raised on the crumbling house of cards in the most protracted prickly issue among the Malaysian Indian community. For over two decades, Maika Holdings Bhd, MIC's investment arm, initially touted as the "all Indian dream", has been riddled with deep distrust, intense suspicion and weakened by scandal.

So, it was not surprising that when Westports Malaysia Sdn Bhd executive chairman Tan Sri G. Gnanalingam first revealed his plans to takeover Maika in a rushed press conference in late April, instead of stemming the voracious speculation which was his original intent, he had re-ignited the long pent-up suspicion.

Questions aplenty flowed on steady stream: Is this rescue a political play?

Is it a brokered settlement with the MIC leadership? How many layers of agenda are there in this exercise?

What's in it for Gnanalingam? Are the poor Indians, who have long endured this debacle, getting a raw deal?

It didn't help at all that the takeover plan was revealed by politicians just days before the Hulu Selangor by-election, which was perceived by many as an attempt to woo voters.

Truth is, as CIMB Group chief executive Datuk Seri Nazir Razak put it: "It's a very simple deal." (CIMB is adviser and financier of the special purpose vehicle G Team Resources & Holding Sdn Bhd formed to undertake the exercise. G Team is equally owned by Gnanalingam and Datuk S.Kunasingam).


At a press conference to announce the conditional takeover offer on Wednesday, Nazir started out his speech this way. "I'm intrigued that when I announce billion dollar deals, the room (venue of the press briefing) is only half full but today, it's very full. There must be a lot of interest." An understatement, indeed.

If you strip out the past, the highly-strung sentiments and the politics from the deal, Gnanalingam's plan - to wrest control of Maika, pay back shareholders their original investments, manage the debts, flog off its two valuable assets (an agricultural land in Sepang and a 74.1% stake in Oriental Capital Assurance Bhd), the excess proceeds of which will be channelled into a fund for the community and finally close the chapter on the scandal-ridden company - is a solution which gets most people thinking - "Why couldn't this have been done much earlier?".

Unfazed by critics and quite confident he will be able to garner over 50% of Maika shares, a condition for the offer, Gnanalingam, who is also co-chairman of the Cabinet sub-committee on Indian affairs, remarks: "A
thousand opinions are not better than one action plan."

"If we can't solve this first problem, it's no use being on the committee.
That's why I'm doing this." A simple deal, indeed G Team has proposed to acquire all 125 million shares in Maika at 80 sen per share or RM100mil cash (the 25 million shares arose from a four-for-one bonus issue in 1996). The offer is conditional upon G Team receiving more than 50% of the voting shares of Maika. Once the offer becomes unconditional, it will also trigger a general offer for OCA shares.

On May 14, 2010, in what is the first sign that the deal has moved one step ard, Maika's board of directors confirmed that they had received a takeover offer, further stating that they were not seeking an alternative person to make a takeover offer of the company's shares other than G Team.

Maika shareholders are expected to receive the offer document within 21 days and the offer will remain open for at least 21 days with an option to further extend.

G Team has been given a time-frame of one year by the central bank to dispose of its stake in OCA. As for the encumbered land, once its title and valuation have been verified, a committee would be set up to determine the best way to realise the value of the land.

Should the exercise result in a financial gain, the monies will be donated to an established charity for the benefit of the Malaysian Indian community while any loss will be borne by G Team. G Team does not plan to continue the operations of Maika.

"It is our intention to close the chapter (of Maika)," said Gnanalingam.

And this - "There's no political involvement in this exercise. I feel Indians should resolve the issues themselves and as quickly as possible."

The big question - is it a fair offer?


The offer price has drawn mixed response.


"He (Gnanalingam) is a businessman. He is only talking of giving shareholders their original investment value. If he's willing to pay RM1 for 125 million shares, then it's reasonable. What happens to those who bought the bonus shares at RM1? After waiting for 26 years, not many people are going to be happy with the offer," says Datuk S. Subramaniam, president of Nesa Cooperative. (Nesa Cooperative filed and won a court order to stop the sale of OCA back in 2007)).

Gnanalingam, a former tobacco and advertising executive and now port owner since 1996, was ranked the 13th wealthiest man in the country with a net worth of some RM800mil by the widely followed rich index by Forbes last year. With that in mind, there are many who ask "Why couldn't he pay more?"

Here's why.

Maika's latest net tangible asset stood at 23 sen per share; at the offer price of 80 sen per share, the offer translates to 3.5 times book. In addition, it has liabilities of some RM60mil. (Maika's 2006 accounts show that it has two debts - RM34mil owing to Danaharta Managers and RM18.3mil owing to CIMB, which total RM52mil.)

In fact, according to a source, one of Maika's creditors, Danaharta Managers, had earlier agreed to take a haircut on the outstanding debt. In a letter to shareholders dated August 2007, Maika's then chairman Tan Sri Abdul Rashid Manaff alluded to that. He said the board was hopeful of obtaining a substantial waiver of the accumulated interest of nearly RM20mil owing to Danaharta Managers. If this is still the case, then the debts ought to be lower than estimates.

But sources close to the offeror reveal that since news of a potential takeover has surfaced, the creditors have been less amenable to providing the haircut.

Back to the valuation. The Tumbuk Estate in Sepang is worth RM10mil while based on its latest available book value as at 2008, OCA is said to have a net tangible asset of RM102mil.

Based on 1.5 times book value, Maika's stake in OCA is worth some RM113.4mil. If you total the value of OCA with that of the land and minus the debt, it comes up to some RM63mil, as opposed to the total purchase price of RM100mil.

It is believed that in FY2009, OCA returned to the black after a three-year loss streak. A company source said the insurer's latest NTA stood at RM120mil as at end-December 2009. Based on those figures, Maika's stake in OCA at 1.5 times book comes up to RM133.4mil which, after including the land and debt, totals RM83.4mil.

"However you skin it, it's going to be pretty tough to get it to RM100mil," says Nazir, adding that it is an offer at fair value based on what is available at this point. "It's fairly offered to everyone and we hope majority will accept."

But there may be one stumbling block to the sale of OCA which has been there since 2007 - Nesa Cooperative's court order to freeze the sale of OCA.

"I have repeatedly said that at any time when an offer is made and the price is reasonable, we will apply to lift the injunction. We know there were offers in the past which valued the company at RM130mil and RM149mil. So, as far as the insurance company is concerned, these are the parameters. If the price is reasonable, there's no problem," says Subramaniam, who owns some 8,000-10,000 shares/


Disgruntled shareholders


Many shareholders appear only too relieved that the latest takeover offerwould finally mean closure to the painful Maika saga, especially so for those who have written off the possibility of ever getting their monies
back.

In fact, along the years, many shareholders were said to have sold their shares at 50-80 sen to interested parties. "These people were poor and desperate to raise any cash they could," says an observer.

And there are others who believe they should hold out for a better price.

One of them is S. Nadarajah, a management consultant.

"We welcome the move. But what's important is the price, which I feel is ridiculously low. It looks more like foreclosure value than real market value. OCA has considerable value that can be unlocked. It's a much sought after business," he says.

That may be perception more than reality. Sources close to the insurer says a lot need to be done to bolster OCA's waning status. "Yes, it (OCA) is a valuable asset but it is nowhere near to what some Maika shareholders think.

The person who buys the company needs to pump in at least RM20mil to revamp the operations, recruit people and get things back on strong footing. A lot need to be done. Some are saying it ought to be sold for RM200mil. I think that's a pipedream," says the source.

"Coming in and out for Gnanalingam makes sense as he can make almost dollar for dollar return on what he paid for Maika. The downside could be limited unless of course, they take too long to flip it. The longer they take, the less value they will get," adds the source.

Ultimately, whether the offer price is fair would be judged by how much the asset is finally disposed of, which has been promised will be an open and transparent process.

"There's clearly no intention to short-change anyone here. We have to start from somewhere. The key thing is to look forward," says Nazir.


Moving on


Gnanalingam is clearly anxious to separate his takeover plan from the past. Why not? He's not responsible for the controversies that have long dogged the group. "I don't want to go into what happened in the past 26 years. It's irrelevant," said Gnanalingam.

Unfortunately, that may be easier for them to do than the tens of thousands of Maika shareholders, who over the years have had to suffer the crushing realisation that their investments in Maika have painfully diminished. That could mean another thing - that while the cleanup may not take too long, the repair could take much longer.

"Maika is a commercial entity that has been bogged down by political dogma.

That's the main reason for its downfall," says a corporate observer.

Back in the 80s, RM100mil in the coffers was an eye-popping load of money. "If the company had invested most of its money in equities then and sat pretty up until now, it would have billions in its coffers today," says the observer. The colossal loss of opportunity, indeed, is hard to stomach.

"Political parties need to have their own ways of doing things in the business world. But they can't run away from the simple fact that just being granted access, is no guarantee to making returns. It does not mean, you
don't have to manage it. Execution is still the issue whether you are the investment arm of Umno, MCA or MIC," says the astute observer.

There are many issues about the company that are puzzling. Maika has not conducted an annual general meeting for the past three years. The last annual accounts received by members was for financial year 2006. It currently only has a two-member board - Datuk C. Vijaya Kumar, chairman and Vell Paari, the CEO. Paari is also the son of Datuk Seri S. Samy Vellu, MIC president and the architect of Maika.

Given that there are adequate safeguards and checks and balances in the law,it is deeply distressing that the regulators have not appeared to act in a meaningful way.

At this point, what we do know for sure is that Maika, once trumpeted as the Indian community's answer to uplifting their flagging socio-economic status, is a dismal flop.But what we do not really know is - how exactly did it reach this point?

Once the chapter is closed, will we ever?

Malaysia's Anwar in Stress, Under Fire

Defections, disorganization dog Malaysia's opposition party

Malaysian opposition leader Anwar Ibrahim, under the stress of a long-running trial accusing him of sexual perversion, is under increasing strain as the point man for his Parti Keadilan Rakyat, or People's Justice Party as he continues to be harried politically as well.

"Some analysts would point out that Anwar has to get PKR's house in order," a think-tank analyst in Kuala Lumpur told Asia Sentinel. "There is growing frustration within Anwar's coalition and his own party." In particular, PKR has lost five members of parliament and five statehouse members to defections in the two years since the Pakatan Rakyat opposition coalition stunned the Barisan Nasional, or ruling national coalition by breaking its two-thirds hold on parliament. By contrast, Parti Islam se-Malaysia and the Democratic Action Party have only lost one each.

With a number of PKR state assemblymen now wavering and clearly considering defecting, it is possible that the opposition coalition could lose the states of Selangor and Kedah, which they won in the 2008 election. The state of Perak has already been reclaimed by the Barisan although critics say it was through skullduggery rather than legitimate political action.

"Because it is Anwar's party, Keadilan was supposed to be the anchor, but it has been weak from the very start," said a source in Kuala Lumpur. Parti Keadilan is largely made up of young, urban professional ethnic Malays.

"The problem is that Keadilan, like Anwar himself, are mostly ex-members of (the United Malays National Organization) and a lot of them are in there for a quick buck – like Umno itself, I guess. Anwar is bogged down with his legal sodomy case-but more importantly, there is a loss of confidence in his leadership."

What should have given a wakeup call to both Anwar and his colleagues in the opposition Democratic Action Party, which is largely ethnic Chinese, was an announcement earlier this week that Parti Islam se-Malaysia the fundamentalist Islamic party with its roots in the rural northeast, will take in non-Muslim members and even allow them to stand as PAS electoral candidates.

As Asia Sentinel first reported last November, it is PAS that is capitalizing on the situation, rather than the Barisan Nasional, or ruling national coalition. Despite defections, the opposition coalition has won eight of 11 by-elections since the March 2008 general election. The latest was in Sarawak on May 16 when, despite three visits by Prime Minister Najib Tun Razak and a cornucopia of educational goodies, voters again turned away from the Barisan, an indication that the Barisan and particularly UMNO continues to suffer from perceptions of corruption and political favoritism to cronies.

PAS's latest move, announced last week, was to allow members of its Supporters Club to become full members of the Islamic party, with the right to attend annual meetings as delegates. The Supporters Club has some 20,000 members, almost all of them Chinese, who have turned away from the Barisan Nasional. According to the think tank source in Kuala Lumpur, PAS may have more Chinese voters than the DAP

The Chinese, says the source, -- an ethnic Chinese as well -- are comfortable with PAS despite the Islamic party's emphasis on fundamentalist Islam because, unlike the Barisan and particularly UMNO, PAS has no designs on the Chinese business community's ownership of the economic sinews of the country. The country's New Economic Policy, in place for four decades, has been designed to transfer as much as 30 percent of the economic activity of the country to ethnic Malays.

"The proof is that we recognize supporters as our official party wing," PAS leader Abdul Hadi Awang told his party's newspaper Harakah Daily. The Islamic party has already placed a non-Muslim in a Terengganu constituency to contest as a PAS candidate.

"Whether this is for real or a political gambit, it is hard to say," the analyst said. "But it does suggest PAS is going after the Chinese vote."

That isn't to say there won't be tension. There are plenty of Islamic firebrands in PAS who detest Chinese dietary freedom – to eat pork and drink beer, for instance -- and lack of discretion in dress for women. There have been attempts by PAS to limit beer sales in some communities. Nonetheless, the source said, PAS may have even wider resonance among voters than the Chinese-oriented Democratic Action Party, another leg of the opposition coalition.

In the meantime, Anwar and Parti Keadilan have come under constant criticism for the quality of the candidates they have fielded and for disorganization and political infighting in the party itself. Abdul Hadi Awang and DAP national chairman Karpal Singh, among others, have urged Anwar to look into the weaknesses in his party that have caused the defections. Anwar has repeatedly spoken of the need to find better candidates.

Anwar has been under a cloud since June of 2008, when a then-24-year-old former aide, Mohd Saiful Bukhari Azlan, filed charges accusing the 62-year-old opposition leader of forcible sodomy. Sodomy in Malaysia is punishable by caning and up to 20 years in prison. The charges have since been reduced from forcible rape to consensual sex, which is still illegal under Malaysian law. The trial has droned on in a Kuala Lumpur courtroom for months, with Anwar's lawyers seeking delay after delay that has frustrated his followers, a growing number of whom say the trial so far appears to have been conducted on its merits rather than the previous sodomy charges brought against him in 1998 that put him behind bars for six years.





AsiaSentinel.com

To the critics of Hindraf and Uthayakumar

Haris Ibrahim alleges 'communalism' and was quoted as saying he was particularly turned off by Uthaya's e-mail statement on the shooting of Aminulrasyid.



Looking through the Human Rights Party (HRP) website, I found these statements below; Uthaya's article headlines within inverted commas and my comments added in brackets.

(1) 'No justice for six Indians shot dead by police in one transaction. Policeman shot dead Malay-Muslim in a rare case instantly prosecuted'. [Can readers name another Indian besides Kugan who has been a victim of police brutality? They're largely namelesss to the mainstream media and yet according to Suaram director Dr Kua Kia Soong, 'Indians are a minority in this country but they form the majority when it comes to statistics on deaths in police custody or police killings.']

(2) 'Murder probe for odd Malay youth shot dead by police, criminal tag for hundreds of Indian youths killed by police!' [Exaggerated maybe, but is the 'criminal' tagging true though?]

(3) 'Deputy Home Minister visits Aminulrasyid's home. But zero such visits to any Indian shot dead by police & murder in police custody case.'

(4) 'Shot dead by police Home Ministry panel at work and media headlines. But zero for Indians victims.' [Last November, five Indian youths were shot dead by police in Klang. Of these 'suspected armed robbers' aged between 17 and 24, three were brothers. If you can't picture their mother's grief at three coffins lying side by side, perhaps you might recall the fourth victim's sister who committed suicide by drinking paraquat. Her name was Seetha.]

I won't refute that Uthaya has been race-specific in his crusade to highlight grievances but would it do justice to the real situation if he hadn't, and instead employed a blanket description of 'Malaysian' shot dead?

Kua summed up Suaram's 'Policing the Malaysian Police' 2005 report, a portion of which found, 'The marginalised Indians who make up some of the poorest and most oppressed sections among West Malaysians have been portrayed in a racist light. Yet Indians have been the main victims of racial killings such as at Kampung Medan in 2001, deaths in police custody as well as trigger-happy police shootings.'

Rebutting the 'communalism' accusation generally, R Shan in an earlier article in the HRP website wrote: 'Whenever an Indian issue is raised, it is classified as racist and not as a community issue, even when it is the truth and reality.'

Shan also pointed out that the first case handled pro bono by Uthaya on custodial death was 10 years ago – KL High Court civil suit (SI-21-61-2000) – for Mohd Anuar bin Sharip's family who approached Hindraf as a last resort. Hindraf's next case was the second postmortem of Ho Kwai See who died after eight days in police detention.

In the latter half of its story, Malaysiakini quoted blogger Salahuddin Hisham as saying, 'When you [Uthaya] highlighted the plight of the estate workers, do you know that there are also Javanese and Chinese workers in the estates? There are also the Chinese, Malay, and people of other races who are poor, not just Indians.

I'm presuming the Javanese he mentions are Indonesian. Whereas the Malay First-ers crave a monopoly on victimhood, poverty and suffering, Hindraf's harshest critics are the nationality-loving Malaysian First-ers who discount that race matters.

To Salahuddin's contention that it is not just the Indian community that needs special attention, I would counter that their urgent distress signal is not getting the attention it deserves.

Salahuddin is indeed correct that there are the poor from every community. However, the Malays live on land that belongs to them and they have their kampung to call home or return to, and there is Malay Reserve Land. On the other hand, when the plantations were dismantled, Indians who lost their estate jobs were turned out homeless to become urban squatters. They have not been the beneficiaries of government land programmes such as Felda, Felcra, Risda and others.

Unlike Malays, the Indians have no social safety net and receive little notice or help from the welfare departments. Furthermore, what is the evidence of your own eyes? I see vagrants sleeping on the five-foot way and they have consistently been Indian men.
I see Indian small vendors selling newspapers and sweets, and what they sell in sidewalk stalls fetch meagre profit like flowers and jasmine garlands at RM1 a strand.

I see that road sweepers, car washers and parking attendants are Indians, garbage collectors are Indians (and Indonesians), cleaners and labourers are Indians (and Indonesians). The Indians have been in this land for generations and their status no better than illegal immigrants.

The primarily English-speaking Malaysian First-ers like to think they are superiorly beyond or above ethnicity and choose to hold themselves aloof from Hindraf. They complain that Hindraf is confrontational, abrasive, hyperbolic, sectarian and always talking about Indians alone, plus the clincher – 'Hindraf is racist'.

Nonetheless, I would urge Malaysians to reassess this 'racist' label that they apply so cavalierly as well as to put Hindraf's struggle in proper context.

Our Malaysian constitution has Article 153 guaranteeing the Malay special position and granting quotas. The Umno-led government has since Independence (Mara was established before 1969) unremittingly implemented NEP-like policies that favour solely one race. This race-oriented structure of state has ultimately stranded Indians at the bottom of the heap.

While one may question his methodology like Haris does, still, Uthaya has spent a lot of time pondering on the Indian condition during his ISA detention of more than 500 days.

For his dues paid in Kamunting, surely we can give Uthaya this much, that is to weigh the substance, ie, merit of the argument and not be too distracted by the form. The form of Hindraf is arguably narrow – Hindu Rights Action Front – but then again, people don't similarly demand that Sisters in Islam must take up the cudgels for Christians, Buddhists, Sikhs, etc or fight for men's rights in order to be viewed as inclusive.

I'm well aware that Hindraf does not endear itself to Malaysians who prefer politically correct posturing such as Yasmin Ahmad's huggy-feely Petronas ads or Anas Zubedy's feel-good publicity campaigns. But if Hindraf's critics are really so Malaysian-First, why do they read foremost in English? If one were to read more in Malay, you'd realise how negative and belligerent the stereotyping has been of Indians in our unique 'agama dan bangsa'-permeated environment.

Uthaya reluctantly agreed to came to the BUM gathering – which he already anticipated to be 'hostile' – to try to dispel the entrenched prejudices. What eventually transpired can only convince HRP that they're banging their heads against a wall of indifference.

It's undeniable that Uthaya and his colleagues have alienated even 'friends' (individuals, organizations and alternative media) sympathetic to the Indian cause. This being the case, perhaps we would all be better off going our separate ways whilst minding the Indian saying – 'If you can't help, don't hinder'.

Although Hindraf and its political arm HRP might be unpalatable to you, nonetheless the issues they raise are entirely valid. Once you grasp the gravity of the message, you could perhaps get some inkling as to why the messenger has lost patience with Malaysians. The official set-up of this country assuredly makes us one of the most race-obsessed in the world but it is paradoxically Hindraf and not bumiputera-ism that is taken to task.




Helen Ang

Malaysia's Submarine Scandal Surfaces in France

Murky arms deal linked to international pattern of kickbacks

A potentially explosive scandal in Malaysia over the billion-dollar purchase of French submarines, a deal engineered by then-Defense Minister Najib Tun Razak, has broken out of the domestic arena with the filing of a request to investigate bribery and kickbacks from the deal in a Paris court.

Although the case has been contained for eight years in the cozy confines of Malaysia's courts and parliament, which are dominated by the ruling National Coalition, French lawyers William Bourdon, Renaud Semerdjian and Joseph Breham put an end to that when they filed it with Parisian prosecutors on behalf of the Malaysian human rights organization Suaram, which supports good-government causes.

Judges in the Paris Prosecution Office have been probing a wide range of corruption charges involving similar submarine sales and the possibility of bribery and kickbacks to top officials in France, Pakistan and other countries. The Malaysian piece of the puzzle was added in two filings, on Dec. 4, 2009 and Feb. 23 this year.

For two years, Parisian prosecutors, led by investigating judges Francoise Besset and Jean-Christophe Hullin, have been gingerly investigating allegations involving senior French political figures and the sales of submarines and other weaponry to governments all over the world. French news reports have said the prosecutors have backed away from some of the most serious charges out of concern for the political fallout.

The allegations relate to one of France's biggest defense conglomerates, the state-owned shipbuilder DCN, which merged with the French electronics company Thales in 2005 to become a dominant force in the European defense industry. DCN's subsidiary Armaris is the manufacturer of Scorpene-class diesel submarines sold to India, Pakistan and Malaysia among other countries. All of the contracts, according to the lawyers acting for Suaram, a Malaysian human rights NGO, are said to be suspect.

With Najib having moved on from the defense portfolio he held when the deal was put together in 2002 to become prime minister and head of the country's largest political party, the mess has the potential to become a major liability for the government and the United Malays National Organisation. Given the power of UMNO, it is unlikely the scandal would ever get any airing in a Malaysian court, which is presumably why Suaram reached out to French prosecutors.

"The filings are very recent and have so far prompted a preliminary police inquiry on the financial aspects of the deal," said a Paris-based source familiar with France's defense establishment. "There isn't a formal investigation yet. The investigation will most likely use documents seized at DCN in the course of another investigation, focusing on bribes paid by DCN in Pakistan.

The source said police have confined their inquiry to bribery allegations so far and have not looked into the 2006 murder of a Mongolian woman in Malaysia who was a translator on the deal for Najib and his friend, Abdul Razak Baginda, during a visit to Paris.

There have been numerous deaths involving DCN defense sales in Taiwan and Pakistan. Prosecutors are suspicious that 11 French submarine engineers who were murdered in a 2002 bomb blast in Karachi – first thought to have been the work of Al Qaeda – were actually killed in retaliation for the fact that the French had reneged on millions of dollars in kickbacks to Pakistani military officers.

The Malaysian allegations revolve around the payment of €114 million to a Malaysia-based company called Perimekar, for support services surrounding the sale of the submarines. Perimekar was wholly owned by another company, KS Ombak Laut Sdn Bhd, which in turn was controlled by Najib's best friend, Razak Baginda, whose wife Mazalinda, a lawyer and former magistrate, was the principal shareholder, according to the French lawyers.

"Over the past years, serious cases have been investigated in France by judges involving DCN," lawyer Renaud Semerdjian told Asia Sentinel in a telephone interview. "This is not the first case of this kind that is being investigated. There are others in Pakistan and there are some issues about India. To a certain extent, every time weapons of any kind have been provided, suspicion of violation of the law may be very high.

As defense minister from 2000 to 2008, Najib commissioned a huge military buildup to upgrade Malaysia's armed forces, including two submarines from Armaris and the lease of a third, a retired French Navy Agosta-class boat. There were also Sukhoi supersonic fighter jets from Russia and millions of dollars spent on coastal patrol boats. All have come under suspicion by opposition leaders in Malaysia's parliament but UMNO has stifled any investigation. Asked personally about the cases, Najib has responded angrily and refused to reply.

Despite efforts to bury it, the case achieved considerably notoriety after the murder of Altantuya Shaariibuu, a 28-year-old Mongolian translator and Razak Baginda's jilted lover, who participated in negotiations over the purchase of the submarines. By her own admission in a letter found after her death, she was attempting to blackmail Razak Baginda for US$500,000.

She was shot in October 2006 and her body was blown up with military explosives by two bodyguards attached to Najib's office after Razak Baginda went to Najib's chief of staff, Musa Safri, for help in keeping her away from him. Not long after being acquitted in November 2008 under questionable circumstances of participating in her murder, Razak Baginda left the country for England. The bodyguards were convicted but no motive was ever established for their actions despite a confession by one which was not allowed in court, but which said they would be paid a large sum of money to get rid of her.

The submarine deal was never brought up in court during a months-long murder trial that was marked by prosecutors, defense attorneys and the judge working studiously to keep Najib's name out of the proceedings. A private detective hired by Razak Baginda to protect him from the furious Altantuya filed a statutory declaration after the trial indicating that Najib had actually been the victim's lover and had passed her on to Razak Baginda.

The detective, P. Balasubramaniam, said later that he was unceremoniously run out of Kuala Lumpur. He eventually emerged from hiding in India to say he had been offered RM5 million (US$1.57 million) by a businessman close to Najib's wife to shut up and get out of town. He also said he had met Nazim Razak, Najib's younger brother, and was told to recant his testimony.

In the current complaint in Paris, the issue revolves around what, if anything, Razak Baginda's Perimekar company did to deserve €114 million. Zainal Abidin, the deputy defense minister at the time of the sale, told parliament that Perimekar had received the amount – 11 percent of the sale price of the submarines – for "coordination and support services." The Paris filing alleges that there were neither support nor services.

Perimekar was registered in 2001, a few months before the signing of the contracts for the sale, the Paris complaint states. The company, it said flatly, "did not have the financial resources to complete the contract." A review of the accounts in 2001 and 2002, the complaint said, "makes it an obvious fact that this corporation had absolutely no capacity, or legal means or financial ability and/or expertise to support such a contract."

"None of the directors and shareholders of Perimekar have the slightest experience in the construction, maintenance or submarine logistics," the complaint adds. "Under the terms of the contract, €114 million were related to the different stages of construction of the submarines." The apparent consideration, supposedly on the part of Perimekar, "would be per diem and Malaysian crews and accommodation costs during their training. There is therefore no link between billing steps and stages of completion of the consideration.

"As Asia Sentinel reported on April 1, services for the subs are being performed by a well-connected firm called Boustead DCNS, a joint venture between BHIC Defence Technologies Sdn Bhd, a subsidiary of publicly-listed Boustead Heavy Industries Corp Bhd, and DCNS SA, a subsidiary of DCN. Boustead's Heavy Industries Division now includes Perimekar as an "associate of the Group. PSB is involved in the marketing, upgrading, maintenance and related services for the Malaysian maritime defence industry," according to Boustead's annual report.

Originally Boustead told the Malaysian Stock Exchange that the service contract was for RM600 million (US$184.1 million) for six years, or US$30.68 million annually. However, the contract later ballooned to RM270 million per year. Boustead Holdings is partly owned by the government and has close connections with UMNO.

"There are good grounds to believe that [Perimekar] was created with a single objective: arrange payment of the commission and allocate the amount between different beneficiaries including Malaysian public officials and or Malaysian or foreign intermediaries," the complaint states






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