Today the French media outlet Intelligence Online followed German news organisations in questioning the role of their country’s arms manufacturers over Najib’s latest Navy ships defence scandal, the RM9 billion Littoral Combat Ships (LSC) that were never built.
France’s Naval Group, formerly DCNS, are already embroiled in the earlier Scorpene submarine scandal for which they have received several convictions in the French courts for bribing Najib and his co-conspirators in Malaysia to the tune of well over a hundred million euros to get the contract.
The company is presently appealing according to Intelligence Online which today reported that it has worked with Sarawak Report to gain access to the full information on the scandal in Malaysia, including the unreacted version of the Boustead Heavy Industries auditor’s report published last week.
The scale of the redactions can be understood by the size of the published report which only consists of 110 pages instead of the nearly 150 pages in the original report.
The joint investigation has discovered an apparent secret component to the LCS contract which involved misdirecting money provided for the purchase of the six navy combat ships towards completing the submarine project for the two Scorpenes in terms of further parts and supplies.
This was the so-called SMISS (Submarine In-Service Support) programme to cover the fact the previous project was unfinished despite going over budget.
“All the censored parts and the hidden appendices [in the report] concern another programme, known as SMISS and worth €50m, which concerns the purchase of parts for the two submarines that the Malaysian navy acquired in 2002 from DCN, the forerunner of Naval Group (which became DCNS and then Naval Group).
Fake companies and real profits:
It was around the secret SMISS programme that a number of real and fake companies connected to a firm called Alizes Marine were created”
explains Intelligence Online.
The discovery goes a long way to explain some of the issues highlighted in the recently released but considerably redacted 2018 audit report commissioned by Malaysia’s Boustead Heavy Industries Corporation (BHIC) into the whole affair.
These include why it was that having been awarded the contract by Najib’s government this industrial subsidiary of the armed forces fund went against the wishes of the Malaysian navy and commissioned DCNS’s Gowind model of ship as opposed to the original Dutch design that had been identified as the best contender.
In the same way that much of the missing investment appears to have been detoured into meeting Boustead’s existing debts it is evident that there were residual aspects of the previous submarine contracts that needed funding. Indeed a joint company had been incorporated in 2009 by Boustead and DCNS, named BDNC, which was to receive a letter of award from the Government of Malaysia in 2010 for providing In-Service Support for two units of Submarines.
Extremely telling in the eyes of the auditors behind the report, Alliance FIA Malaysia, was the fact that related quotes and agreements had been obtained by Boustead’s BNS from these French concerns well in advance of the LCS contract even having been awarded to BNS by the government in the first place, which didn’t happen until December 2011 (with the final contract not being signed until July 2014).
Indeed, quotes from Alizes Marine were obtained in early 2011 and quotes from DCNS itself a year even before that in December 2010:
“It is unusual to have a DCNS quotation dated 23rd December 2010 even before the Letter of Award was signed by BNS with the Government of Malaysia/Ministry of Defence. This indicated that the deal was pre-determined between the vendor and certain vested persons at BHIC/BNS who were at the helm of the decision-making process. The history of DCNS and its unethical practices to bribe Malaysians during the deal is well documented which were filed in the Court by the investigative agencies of French after conducting searches at DCNS & Thales office”
the report damningly observes.
In a later segment entitled “Suspicious role of DCNS in the LCS Programme” the report points out that the official Letter of Award (LOA) was not made to DCNS to provide its version of the ships in place of the model desired by the nave until 20th March 2012: “the commercial team were not privy to DCNS’s commercial offer made in December 2010″ nor were they “given any opportunity to thoroughly understand the offer” in a management structure where checks and balances designed to control the spending and management of the project were steamrollered by the top down approach.
Middle management, who were squeezed out of the process and prevented from performing their proper roles according to the report, found DCNS “arrogant” and “not transparent in terms of their scope of work, technical specifications, various components and deliverables.”
Fake Company To Siphon Cash
Having pre-determined the contracts would go to the French company in a manner that showed “clear intent” says the report a number of companies were set up to siphon out money through the purported supply contracts. Again the report does not mince its words in pointing its finger:
“A special internal audit report finding signified serious irregularities, deceptive practices and personal gains at the expense of BHIC.
The vendors for providing consultancy services were shortlisted without following the guidelines of SOPP on tender bidding and selections. The payments were also not approved by the Procurement team and BOD of BNS”
It was in this context that the French supply operation was set up utilising unnecessary middlemen companies, much in the same way that the German subsidiary Contraves Malaysia was employed to siphon a billion ringgit from procurement on the main equipment side of the contract.
“Rather than dealing directly with [manufacturers] BPS (Boustead Penang Shipyard) selected an intermediary , Alizes Marine in France based on an alleged recommendation by DCNS, for the supply of spare parts for the Scorpene Submarine project. [The] Ex-Chief Financial Officer raised various concerns on the selection of Alizes Marine, however, the management failed to take corrective actions.
Based on the letter from DCNS, Alizes Marine never possessed a global export licence despite the assertion by [the key procurement officer] in front of the Board that Alizes Marine was selected because they had a license…
Although it appeared that the spare parts were procured by Alizes Marine France, the way payments were diverted to Alizes Marine in Singapore created serious doubts…. DCNS used Alizes Marine as a front to benefit from the supply of spare parts on the arrangement carved in Malaysia.
Prima facie, it appeared that DCNS and Amersi group France were also part of the scheme through which Alizes Marine Ltd siphoned out monies violating the provisions of the Anti-Money Laundering Act (AMLA) in Malaysia.
“[BHIC audit – capitals added]
The above damning conclusions by the auditors explain why, the report says, although BPS paid €43.69 million to Alizes Marine France between 2011 to 2015 the actual company in France reported a revenue of only €3.53 during that period.
As Intelligence Online reports, matters become all the more suspicious the deeper you dig in the face of such damning allegations against France’s biggest defence company.
Under a segment entitled Dubious Facts Involving Alizes Marine the audit records that the French company itself was only incorporated on 13th July 2011 which was some months after two bogus same name subsidiaries were incorporated in Malta (April) and Labuan (February).
Yet the letter of recommendation from DCNS dated in September that year on which the selection of this parts provider was based claimed the company had a “track record” to rely on. The letter also pointed to Alizes’ connection to an established defence procurer Ameris France whose management, according to Intelligence Online, registered the firm in France.
The President of Ameris is one Thierry Barrier who, according to the audit report, referred always to himself as President of Ameris France however nevertheless used an email address “giving an impression that he is the official of Alizes Marine France”.
Moreover, documents at Boustead referred to to company as “Ameris France / Alizes Marine” indicating a clear conflation of the two entities in the understanding of the Malaysians.
Tale of Two Wives?
The nub of the deception involving Alizes, as has been now widely reported, was that invoices sent by BPS to Alizes Marine in France were in fact being paid to the Labuan namesake’s bank account in Singapore through an Alizes Marine Limited (much in the same way that Jho Low siphoned billions out of the 1MDB bond issues through bogus off-shore subsidiaries of the UAE sovereign fund Aabar).
Despite the lack of guarantees and in a contradiction of good process that was questioned by the Boustead internal auditor but ignored 50% fees were paid up front by BPS for these contracts, many of which simply were not fulfilled a year later.
“BHIC Board minutes dated 22nd November 2012, the group internal auditor raised serious concerns on the payment of 50% advance money to Alizes Marine, however, no corrective steps were taken by the management….
It was unusual to note that four purchase orders amounting to approximately Eur12 million for procurement of spares were issued by BPS even before the registration of Alizes Marine in France as a company. These invoices did not contain any details as to the material to be supplied by Alize Marine… This reflected the intention of certain officers to siphon out the money in the name of procurement”
The shareholder of the bogus companies was identified by the auditors as a Malaysian lady named Zainab Mohd Salleh which happens to be the name of the second wife (now believed divorced) of Abdul Latiff Ahmad, Malaysia’s deputy defence minister from 2008 to 2013 and now a minister in Prime Minister Ismail Sabri Yaakob’s office.
So far, the minister has yet to make a clear statement about whether or not this lady was related to him and his allies have challenged opposition leader Rafizi Ramli, who broke the story, to “steal” the marriage papers to prove it!
Zainab also appears as a shareholder in several other firms that have invoiced BNS/BPS, for orders, including Sousmarin Armada Sdn Bhd, IntraLogistics Ltd, Prestigio International, Azimuth Shipping Corporation and Mega P Sdn Bhd.
Whilst the giant defence group DCNS, now called Naval Group in France, has sheepishly declined to answer any questions at all on this murky matter so far, Ameris France has come out with flat rebuttals when questioned by Intelligence Online. In a statement to the portal it declared:
“Ameris Group has never had a subsidiary in Malaysia, does not own and has never owned a bank account in Singapore. The Ameris Group has no capital ties to any of the companies mentioned in the report.”
“This is clearly a case of usurpation of the names of our companies and identities, of embezzlement, with which the Ameris Group companies, Ameris France and Alizes Marine France have no involvement”.
Except, the audit report points out, that for the last of the above companies linked to the off-shore Alizes Marines Limited in Labuan, Thierry Barrier, Ameris’ CEO, was a shareholder and director of Mega P Sdn Bhd Malaysia (linked to a French incorporated Ameris subsidiary also called Mega P) alongside Zainab and Abdul Latiff Ahmad, from 23 October 2015 to July 2017 “It is noted that And Latiff is the spouse of Zainab” the auditors observe 3.16.13 2.
As the audit report concludes:”Therefore, Thierry and his company would not be able to deny their role in this conspiracy of Ameris group and Zainab”(22.214.171.124).
Just as accusingly the auditor states that Boustead would have been far better to have ordered from Ameris directly as an established supplier than for Amersi’s President to have created this alleged subsidiary as a deliberate ‘layer’ between transactions.
“After viewing the transactions related to Alizes Marine Ltd Labuan, it appeared the primary aim of using the Labuan company was to create a layer rather than actual business and a conspiracy to inflict financial damages to BPS, BHIC and LTAT at large (16.12.4)
Various documents used during the supply of spare parts to BPS has confirmed that he name of Alizes Marine and Alizes Marine Limited have been used interchangeably to create confusion and to reflect that both the companies were the same…..BPS should have directly engaged Ameris Group rather than going through intermediaries to secure spare parts. This resulted in an apparent loss and lack of control which provided an opportunity to siphon out the money”
Faced with this observation, Ameris responded to Intelligence Online that this was “only to ensure contractual consistency“. On 13 April 2016, Mega P Asia Sdn Bhd was indeed awarded a service contract by BDNC – the joint venture between Boustead Heavy Industries Corporation Berhad (BHIC) and Naval Group – for the supply of technicians, some of them Chileans, to carry out the modernisation of the submarines. Ameris had previously worked as a subcontractor on DCNS’s Chilean submarine construction project.
It would appear that in even releasing the Boustead report Malaysia’s current UMNO government has sought to protect the convicted Najib Razak and his cohorts by attempting to keep hidden (through these redactions) that the LCS project was used to continue to secretly subsidise the French submarine project with misappropriated funds. It is a pattern that mirrors how Najib purloined later projects to cover up the monies stolen from 1MDB.
Finally, Sarawak Report has noted that the redactions sought to conceal another apparent family connection in the mix of multi-million ringgit companies and games of smoke and mirrors around LCS.
Ameris and its President not only distanced themselves from the “usurpation and embezzlement” of the company’s identity and that of Alizes Marine France when questioned by Intelligence Online. In 2018 Thierry Barrier “denied any business deal with BPS” to the BHIC auditors as well.
This despite the fact that the auditors make clear that in a letter of September 2011 from DCNS Paris to BPS (Boustead Penang Shipyard) the French naval giant suggested using Alizes as an intermediary to provide services and spare parts, rather than the existing joint venture between Boustead and DCNS themselves (BDNC).
According to a redacted section of their report Zainab, when faced with a legal notice likewise “replied in writing that Alizes Marine had nothing to do with BPS”. The same document stated that invoices raised by Alizes Marine France were accompanied by “a request to pay at a different Alizes Marine in Singapore, managed by Zainab binti Mohd Salleh.” (2.6.21)
Intriguingly, the CEO of Alizes Marine in France was one Viktoria Barrier, whose unusual name would suggest a family tie with Thierry Barrier the President of Ameris France who claims he and his company have nothing to do with the “usurpers” at Alizes Marine in Singapore, despite also being involved in another company with them that was likewise receiving contracts from LCS.
Perhaps Ameris could provide some further explanations in order to disentangle this messy matter involving the President and a lady of the same name?
Likewise, if the minister is unwilling to state whether or not Zainab is his wife, Abdul Latif could explain how it was that he nonetheless ran a company with this mystery lady as well as Ameris President Theirry Barrier that was in turn receiving contracts from LCS – a public company that he was supposed to be the Number 2 of as Najib’s deputy minister of defence?
Indeed, the scandal of the multi-billion euro LCS scam threatens to end up being remembered as the Tale of Two Wives, much as the scandal of the original Scorpene submarines is remembered for the death of Altantuya.