Malaysia Dismisses Graft Allegation

April 26, 2007, 10:23AM
Malaysia Dismisses Graft Allegation


© 2007 The Associated Press

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KUALA LUMPUR, Malaysia ? Malaysia's defense ministry on Thursday dismissed
allegations of corruption in its purchase of Russian aircraft and French
submarines, saying no hefty commissions were paid to middlemen.

In a three-page statement, the ministry said it wanted to put a stop to
accusations that it misled the public about a deal to buy three submarines in
2002 and a $900 million contract to purchase 18 Sukhoi Su-30MK fighter aircraft
the following year.

Opposition figure Anwar Ibrahim has claimed that Deputy Prime Minister Najib
Razak, who is also defense minister, is corrupt and that massive commissions
were paid to facilitators in the two deals.

The ministry statement comes ahead of a crucial by-election Saturday that is
seen as a test of support for the ruling National Front coalition. General
elections are expected late this year or in early 2008.

The National Front faces a tough challenge from the People's Justice Party, led
by Anwar's wife.

Najib has denied any wrongdoing and the Ministry of Defense statement Thursday
backed him up, saying all contracts were subjected to austere reviews and
approved by the finance ministry.

It said accusations that it paid a 540 million ringgit ($154 million) commission
in the submarine deal to local firm Perimekar Sdn. Bhd. were "baseless."

Perimekar has a six-year contract worth $138 million to provide support services
to a French company but this doesn't constitute a commission, it said.

In the aircraft deal, it said Russian state company, Rosoboronexport, directly
appointed a local company to coordinate their dealings in the country and that
it has nothing to do with the government.

Anwar has called for a thorough investigation into the aircraft deal, alleging
that $108 million in commissions were paid to IMT Defence Sdn. Bhd.

The defense ministry said it "hopes that all parties will understand the real
situation and will not make any more confusing statements that could stir up
negative perception" toward the ministry and the government.

.

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