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French prosecutors investigate aide to Malaysia PM over submarine deal

PARIS/KUALA LUMPUR (Reuters) - French financial prosecutors have put a former aide to Malaysian Prime Minister Najib Razak under formal investigation as part of a probe into the 2002 sale of submarines to Malaysia, a French judicial source said on Wednesday.

Razak Baginda has denied wrongdoing. He advised Najib, who was defense minister at the time, on the purchase of two Scorpene-class submarines from French state-controlled warship builder DCN International (DCNI) in 2002.

DCNI then became a new entity called DCNS, which in turn rebranded itself as Naval Group this year. French defense company Thales owns around a third of Naval Group.

"The inquiry by the French is welcomed as Dr Razak Baginda has not committed any crime of corruption or breached any laws in the matter," the former aide said in a statement sent to Reuters.

Two French former defense industry executives were placed under investigation last month as part of the same probe into alleged kickbacks from that submarines deal.

In France, being put under formal investigation means there is serious or consistent evidence that points to likely involvement of a suspect in a crime. It does not necessarily lead to a trial.

The investigation began after Malaysian human rights group Suaram alleged that the sale resulted in some $130 million of commissions being paid to a company linked to Najib.

The Malaysian government has denied any allegations of corruption concerning the submarine sale.

(Reporting by Cyril Camu in Paris and Joseph Sipalan in Kuala Lumpur; Writing by Ingrid Melander; Editing by Andrew Callus and Matthew Mpoke Bigg)