Debunking Scorpene Scandal Part VI: Truth on Terasasi

Razak Baginda in trying times

When this blog started this Debunking Scorpene Scandal series in Part 1, we set out to:

... debunk each issue by issue using information from their sources. We will reveal the inconsistency in their allegation, and the ever changing stories.

We may have certain information to refute their allegation but we decide to only use their source and publicly available information on the Internet. Most of the speculation and allegation on Scorpene were politically motivated to bring down Dato Najib. That way we will prove it is only lies, speculations, and illogically made up stories. 

Our objective, like the French investigation court, as taken from SUARAM website, is:

... to investigate the claim of corruption for a payment amounting to €114 million made as commissions from DCNS to Perimekar.

 If that payment was corruption, someone must be charged. In Part V, we showed SUARAM press statement was reported as that:

 “… the French authorities will look into is the corruption or commission allegedly paid by DCN,” said Joseph Breham ….

… the murder of the Mongolian woman is beyond the jurisdiction of the French authorities.

In the video in Part V, SUARAM’s French lawyer, Joseph Breham reiterated that “the French court interest and jurisdiction is on DCN and other French outfit but not any Malaysian entity” and whether bribes was paid by them on and possibly on “French soil." And it include any contravention of OECD Convention on Bribery.

No Altantuya and no indictment of Dato Najib. That will be done by the Malaysian court. Trust me, if there is conviction in France, our court will have to act and we will make sure they do. Or we will help organise Bersih 7...

‘Slander thy Najib’

 When the murder incident happened in 2006, we received an unknown SMS which attempted to link Dato Najib with Altantuya and claimed her then one-year old baby was his. We’ve wrote it in this blog someehere [read us here and here].

The SMS claimed that Dato Najib was in Cherborg France, a year before. But shouldn’t there be another nine months for that coincidence to make sense?

That started our scepticism to anything related to this Scorpene and Altantuya death charade.And we got more sceptical when the Statutory Declarations of PI Bala and Raja Petra appeared.

Many people linked to certain personalities were making all sort of preposterous claims but we'll not reveal them or they will end up in police lock-up. Malaysia Today's Wikileak leak confirm our suspicion that it was to ‘slander thy Najib.’

One of the person is none other than, Dato Najib's own long time friend, Dato Seri Anwar bin Ibrahim. Since he was Dato Najib’s friend, still is despite being on the opposing side, why didn’t anyone implicate him? Off course not obviously.

See the You Tube above of him campaigning in Ijok 2007. Till today, he has no documents to reveal.  Neither was SUARAM successful at producing any documents of substance to prove corruption or bribe or kickback was committed. Drama ada la ....

Like we’ve said in earlier Parts, we’ve friends involved in this submarine project; from the person who structured the deal, the Project Manager and one of the two Submarine Commander.

Not to mention someone, who quietly took up a part-time course in a University on military logistic and had the former Ketua Turus Angkata Tentera, Tan Sri Anuar as classmate, for the intention to join the program which he never did. And, there is the benefit of a military and aviation buff (or big nutt), who like a walking dictionary can talk with ease on both subjects.

We knew there was generally no basic fault from day one. While we do not believe, we still have room to be proven wrong, but it must be substantiated with facts and proven beyond reasonable doubt. Someone died remember?

Razak Baginda

Dato Najib, Datin Rosmah, Dato Zahid Hamidi and many others, including Razak was unfairly implicated without any basis. The prejudicial public owe them an apology.

By virtue of Abdul Razak Baginda was and perhaps still Dato Najib’s friend, yes nothing significantly more than a personal friend, everything was linked to Dato Najib.

From the gruesome murder and the Scorpene submarine purchase, every conceivable negative accusation and prejudices was pinned on him. We have described the modus operandi of their propaganda from Part III to Part V to spin anything they can lay their hands on to implicate the Government or UMNO and definately Dato Najib.

Notice Rafizi spinning Thales participation in the bid for the Ampang LRT was term as Scorpene-linked company. Read in Tian Chua's Malaysia Chronicle here. Dah tiada modal la tu.

PKR, SUARAM, Asia Sentinel and their network of alternative media were syaitan (devils) and they were  bad and ill-intended.

The truth is Razak never worked with Dato Najib, thus it was not fair to link him to Dato Najib.He was a lecturer at the Arms Forces College and later established a Think Tank outfit, MSRC on strategic and defense issues.

The only working relationship was when he helped Dato Najib to write his speech in his first stinct as Defense Minister. That he did for a short while when he was still lecturing. Dato Najib’s and Razak’s personality clicked and they become good friends. Looking at their profile, it is not surprising.

After the short stinct to help with his speeches, Razak was neither adviser nor involved in anything including claim of him being in the inner circle. That is unlike Omar Ong. They were just friends. That is all to it.

Perhaps, many would not like to believe it because of the propagdan by Anwar is so well entrenched in their mind and were not conscious of the 80s. No offense intended but maybe they were still kids or they forgotten what happened in the 80s.

Lets leave it at that.

‘Merchant of Death’

Tentera Laut Diraja Malaysia

We are being dramatic, aren't we?

That would have been how Dr Kua would described the arming of our men to defend the country. See the images of our men (and women) in parade and ponder the risk on their lives if they were equipped with cheap and inadequate arms to defend the nation.

What we intend to do is describe briefly the military industry and process of military procurement.

Having left the Arms Forces College and venturing out, it is natural for Razak to explore into oportunities in Defense Procurerment. As lecturer teaching military officers and student in War Studies at Kings College, London, he understand military doctrine, international relation, diplomacy, economics, security, military operational requirement or role they call it, military strategy and tactics, weaponry, etc.

We are quite sure he has contacts within the diplomatic community and the military establishment. And he must have known then that when Tan Sri Abu Bakar bin Jamal was Navy Chief [read Wikipedia here], he advocated and  campaigned for the submarine. If we know about it and know the Tan Sri too, why shouldn’t Razak not know.

We do not know how he got started. It doesn’t matter whether the French or Daim’s ‘boy’, Dato Ibrahim Mohd Nor approach him or it is the other way around, Razak is not in Government any more and he is entitled to explore opportunities that is suited to his knowledge, experience and wide contacts.

Angkatan Tentera Malaysia

Even if Dato Najib is his friend, as long as he and Dato Najib did not break any law and follow due process, he is entitled to make a living and seek wealth.

It is the same with the relationship of Selangor Menteri Besar, Tan Sri Khalid Ibrahim and I Berhad taukeh, Dato Lim Kim Hong.

Until proven wrong, same with the relationship between Chief Minister of Penang, Lim Guan Eng with the taukeh of developers, Low Yatt Group, Ivory Properties, E&O, Dijaya, and many more friends of, as Dato Dr Chua Soi Lek puts it, developer-friendly Chief Minister.

Same with PAS and their Chinese taukeh. Don’t deny please. Who is the Singaporean taukeh to the shopping mall next to Renaissance Kota Baru? At least, get la a Malaysian! 

The world of defense procurement is actually a close knit circle and transparent business. They know their competitors, their moves, marketing strategy, and even to the ball park bidding price. Most of the arms merchants know each other and their local agent or representatives.Why the representative?

It is the same with any commercial entity. Until there is a sustainable operation, no commercial outfit, more so a foreign outfit, will establish a local office and sustain overhead. They appoint local representative to do the work locals can do better.

Askar Melayu Diraja

The representatives are from the military establishment, usually retired or resigned ranking military officers and Ministry officials.

They are usually paid in the form of retainer for the big named ones or some form of success fee (or ‘commission’) or both. Some with cost reimbursable and without, dependent on one's negotiation.

The reason it has to come from the military establishment is logically simple to understand. They have to know how the Malaysian military works; it's military doctrine, military role, military strategy and tactics, requirements, budget constraints, priorities, etc.

And they need to have network in the military establishment.

Unlike in other marketing of product and services, there is no time to learn. Sorry, there is no room for novice and no training program to learn the military procurement game. Either one knows how it works or don’t get involved. The suppliers and manufacturers comes with the person and not the company.

Once out of the establishment one will not have access to documents. So the marketing progress report requires some market intelligence information. One has to be knowledgeable and experience to pick up those nuances of information that lead to possible arms requirement, opportunities and progress on one's lobby and bid.

First group of Tentera Udara Diraja 
Malaysia women pilot (1988)

One thing we can safely guarantee is Dr Kua Kia Soong or any SUARAM people will not make it in this business. Not only they have no inside track, they do not understand military. Even the fact they claim to know is wrong. Our military spending is only 2-3% of GDP, not 5% as Dr Kua goes around in his fund raising ceramah!

Sometimes, we wonder whether SUARAM is really a human rights organisation. How come they never spoke out on the Israelis atrocities on the Palestinians or Americans intervention into Afghanistan and other Middle Eastern countries?

Oh we forgot.

Currency rouge George Soros through his Open Society Foundation and the American organisation to undertake a former covert operation but now done openly, National Democratic Initiatives (NDI) are their donors.

Terasasi

Another drama by SUARAM?

In Part II on Perimekar, we’ve established that it is a bona fide operation. We gave 4 possible reasons. So the so-called and alleged kickback can’t be the whole proceed of €113 million (RM535 million) paid to Perimekar.

Celine Bolieau, writer for Asia Sentinel and Free Malasyia Today, and happens to be the one we suspect of trying to create another Altantuya out of late Mustafa Dapat’s untimely death, indirectly acknowledged Perimekar’s profit and loss was a ‘fair return.’ 

Unless something turns up on Perimekar beyond the public eye view and it must be substantiated and proven, not based on hunches and suspicion, there is legally nothing wrong with Perimekar. The French investigation court should come out empty on Perimekar.

If one had continued to Part III on Dr Kua’s lies on our defense spending, Part IV on dramatising (or lying) on the court process, and Part V for distoring the leaked investigation documents, one could conclude that the Malaysian did nothing wrong and most of the allegations from SUARAM came out of their prejudice and ill intention or perhaps their own puerile ignorance.

Noticeable in Part IV and V was their propaganda mechanism.

Even the claim of leaking army secret was answered in the posting on Nurul Izzah and her propensity to emulate his lying father's despicable behaviour. Muka dan kulit putih gebu, tapi mulut jahat dan hati hitam!

The unknown factor left is is only Terasasi. And with it will also be to explain on Gifen and alleged travelling expenses of Razak and Altantuya.

In Part 1, we put up a decoy:

Notice that they knew Perimekar cannot be a conduit to pay commission but is genuine work, but they still don't want to believe and thus kept digging.

That is why they want to believe that the €35 million money paid to Razak's Hong Kong company, Terasasi is linked to Perimekar and the alleged kickback for Najib. Unless there is money trail to show such, it is all speculative.

Clue: What does Thales do? And it is not submarine manufacturing. It is only a shareholder with the French Government in DCNS.     

Crucial Document 151

In Part V, Sivarasa accused Government of leaking military secret. Pathetic sounding accusation but it was indication that they are on the road of a lost cause and were looking for some face saving mechanism before quiting. Recall that he wrote in his blog:

“In the file entitled ‘Report of the December 2000 – June 2002 Phase III Part 2’ appeared  the evaluation report of the French offer by the Royal Malaysian Navy dated 17 April 2001 followed by a table comparing the specifications of Scorpene and the wishes of the Malaysian Navy (page 29 … ) with the technical assessments. The report concluded (page 30) that the offer was acceptable but an agreement must be reached on a few details notably the delivery.”

The French report is above and the translation is fair despite being similar to Google Translators version.

Tian Chua must be anticipating this posting because his Malaysian Chronicle was trying to deviate it by getting Dr Setex Shaaribu to comment here. with military secrets still spun in.

Again, there is no military secret leaked at all in Document 151. Never mind if the French police couldn’t understand why the inextricable mentioning of Perimekar, it was all Terasasi’s report to Thales.

Drum roll for the translation please ...

Sivarasa failed to read the earlier part of the Police Report by French Police Superintendent, Anne Sophie Colbois dated December 2011, below:

--- For the memory (pardon their English, meant as for the record), the contents of the three tasks assigned to TERASASI according to the contract X of X.

Mission 1: Project marketing: market research or competitors, political customer acquisition, information on Malaysia (culture, society, politics, economic environment), business practices, tips on marketing and marketing strategies, procedures, customer acquisition, advice on the approach of customer (technical presentation, understanding of its needs), contact and visit the customer, clarification of the decision process


Mission 2: phase supply and negotiation: preparation of the bid, project preposition technical and business understanding of the terms and conditions of the customer, identification of critical points, followed by the decision process, evaluation of constraints time and budget of the customer, any change (political, economic, regulatory) likely to have an impact, administrative and logistical support to representatives of Thomson on site, preparing for negotiations, improvement of all relevant documents

Mission 3: Implementation period: any changes that may have an impact, contract negotiation with the client or separate local partners, support representatives on site, Customs, local transportation, ins ection sites, repatriation of defective parts, repaired parts receiving, maintaining good relations with the customer.

Any businessman will tell that Terasasi was a marketing representative of Thales. It can also be deduced that Thales, being of wider international presence, was the marketing arm for DCNS!

The issue of military raised by Sivarasa and Nurul Izzah was as per the translated portion from our translator, below:

It is merely marketing intelligence report, a common practise in, what Xerox training for salesman described as, complex selling. The representative, Terasasi was meeting people, ‘spying’ on their competitor, compiling data, snooping for information, etc.

People like SUARAM activist mana tahu ini semua. Semua dia kata military secret.

Hahaha .. it was only to dramatise their weakening accusation of Perimekar as a kickback receiving outfit. So they accuse on Terasasi as a deviation and not claim Terasasi did something as wrong as devulging military secret but not divulge that Terasasi was a representative of Thales.

“Commission”

Terasasi role is a marketing agent of Thales for DCNS product i.e. the Scorpene submarine. They could be called by other names like consultant or agent or the commonly used but inaccurate term, broker.    

Will that mean the €35 million paid to Terasasi Hong Kong was a commission or success fee?

Most likely.

From the phrase, “three tasks assigned to TERASASI according to the contract X of X”, it means there could be an agreement signed between Terasasi and maybe Thales as

In Document 151, it state that some reports came from Terasasi Sdn Bhd and some from Terasasi Ltd Hong Kong. It means Terasasi could be incorporated in Malaysia and may have established a Hong Kong office for tax purposes.(You’ll will have to get a translated version to read and understand the full translated report).

Was there a conflict of interest between Razak’s Perimekar and Terasasi?

The shareholders of Perimekar is his wife, Mazlinda through KS Ombak Sdn Bhd and institutional shareholders, LTAT and Boustead. It is specific to play, among others, the logistical support role for the Government.

While Directors of Terasasi Ltd, Hong Kong are Razak and his father, Dato Abdullah Malim Baginda. Despite the different but related ownership, Terasasi was doing work with the French. Anything wrong there?

Off course, SUARAM can spin it any other way they wish but thus far nothing wrong there.

We are not sure when Terasasi was incorporated and who was the original two Director but it does not matter.  

What matter now is whether the "commission" paid to Terasasi by Thales for  €35 million is in contravention with the OECD Convention on Bribery?

The amount paid to DCNS for the submarine works out to be  €1.035 billion. If that included support and test equipments, armament and etc, it could be additional €200-300 million.The fee percentage works out to less than 3%, below the cap in the OECD Convention.

Dig up on your own time to verify. So now, what is the issue?

Too much? How much do Investment Bankers, Financial Market Traders and Brokers make? Millions and if not, hundreds of million?  

Who else was part of it? Maybe, God knows. Complex selling do require a lot of people.

Was it for UMNO’s? ... God knows if there is such donation later.

Knowing how snaky our oppositions are, the subsequent questions and speculations could go on and on till kingdom come. But what is important there is no corruption, or bribe or kickback but for legitimate professional services rendered.

For Razak Baginda to render such service, it required knowledge, contacts and experiance which not many have those skill set. Some may have it but they did not have the luck. Such is life but for rest of us, just syukur with what we have.

Life is also such that one cannot compare Razak's work with Terasasi and Perimekar to any other work. The nature of work and it's return is different. All his years of work and money spend could likely go down to waste also. 

An important clarification, Razak and Terasasi did not steal from the Malaysian taxpayer but he earned it from the lesser profit for the French. But for the French, it is normal cost of doing business in the military industrial complex, as socialist Dr Kua would described the industry as.

The French other option is to open an office, hire staff and work it on their own blindly over many many years of uncertainty in Malaysia with no control over cost and spending.

This arrangement is between Razak and the French. It does not involve the Government, so by right, the Government need not know about Terasasi.

As far as our objective is concern, we have proven that the deal seemed legitimate, common industry practise, and spread over a long time of 10 years work, fair return for it's level of difficulty. 

What is beyond our eyes, who is to know? But that is for SUARAM and their French lawyers to prove beyond reasonable doubt. QED


Before we close off this series, there will be a prologue over the weekend to explore who is Altantuya.

Hmmm ... now does OECD allow for DCNS to pay me commission for this? Or DCNS have no more room but exceeded the 3% limit ...? 


* Edited: 11:20 AM 14/7/2012