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Recently developments in the Malaysian submarine bribery scandal casts some serious suspicions on the French Naval shipbuilder DCNS and their way of doing business in Asia, and by direct association, such suspicions must also be cast on the 2000 deal to buy 6 stealth frigates for the RSN.
The following is the background on DCNS deals in Asia.
Around 2006, Malaysia ordered 2 Scorpene class submarines build by DCNS for $1.1 billion. The company has now been found guilty by a French court of paying $45 million in bribes to obtain confidential Malaysian MINDEF documents on the submarine requirements, as well as paying $142 million in bribes to companies controlled by Najib’s close friend and policy advisor. (Note all dollar figures are in USD). Let’s be clear on this, they were found guilty, so these are not unfounded allegations.
In 1991, DCNS sold 6 frigates to Taiwan for $2.87 billion. A French court found in 2010 that DCNS had paid unauthorized commissions resulting in an inflated price for the frigates. These illegal commissions went to politicians, military officials and middlemen in both Taiwan and France. How much were the bribes? Well, the French court awarded Taiwan $861 million in interest payments, lawyers fee, and refund of these commissions. It was estimated that the original bribe amounts totaled $600 million out of a contract price of $2.8 billion, or a staggering 21% of the contract price was paid in bribes.
In 2005. India orders 6 Scorpene submarines from DCNS for $1.8 billion. This purchase is also embroiled in a bribing scandal. But than most arms purchases in India are, so let’s just not be too surprised here. This time, the bribes appear to be over $100 million.
Now we come to our fair land. In 2000, RSN orders stealth frigates from DCNS in the face of competition from the American shipyard Littons, and the Swedish shipyard Kockums. DCNS wins this contract, but the really fishy thing is that the purchase price for these 6 frigates have never been revealed! Given the history of DCNS’s business methods, I find this very questionable. On other MINDEF purchase like the F-15SG, dollar amounts were revealed publicly. There might be a source somewhere with the contract price, but I am not aware of it. If DCNS follows normal business practices, than we can expect hundreds of millions $ to be paid out in unauthorized commissions, and bribes to Singapore politicians, and military leaders.
If the PAP purports to be transparent and corruption free, it must prudently order a probe into this deal in light of developments in Malaysia and Taiwan, just to assure themselves that everything is clean. It cannot be plausible that DCNS will commit bribery and corruption in every country that it does business with, except SIngapore. The French probe into the Malaysian submarine deal was initiated by a Malaysian Human Rights organization Suaram. Therefore, even if the govt. does not want to investigate this purchase, other NGOs in Singapore and even opposition parties can contact the French govt. I suggest that Chee Soon Juan take this up with the French govt., or even an opposition party can do so.
In addition, the people of Singapore must look at this in the overall context of the industry. The defense industry around the world is notoriously known as one of the most corrupt industries in the world. Singapore spends $10 billion per year on its military budget, one of the highest per capita in the world. The spending is uncontrolled with no watchdog in place. I have yet to meet one Singaporean who can explain to me why we need submarines, tanker aircraft, or even stealth frigates and F-15SGs. Even military men I know (up to rank of Colonel as I am not privileged to meet generals and ministers) can’t explain all these purchases and what they mean in the scheme of our overall defence strategy. Singaporeans work themselves into a frenzy over $2200 bikes and million dollar salaries, but this is potentially $billions in wrongdoing. Lets all ask some serious questions here.
The following is the background on DCNS deals in Asia.
Around 2006, Malaysia ordered 2 Scorpene class submarines build by DCNS for $1.1 billion. The company has now been found guilty by a French court of paying $45 million in bribes to obtain confidential Malaysian MINDEF documents on the submarine requirements, as well as paying $142 million in bribes to companies controlled by Najib’s close friend and policy advisor. (Note all dollar figures are in USD). Let’s be clear on this, they were found guilty, so these are not unfounded allegations.
In 1991, DCNS sold 6 frigates to Taiwan for $2.87 billion. A French court found in 2010 that DCNS had paid unauthorized commissions resulting in an inflated price for the frigates. These illegal commissions went to politicians, military officials and middlemen in both Taiwan and France. How much were the bribes? Well, the French court awarded Taiwan $861 million in interest payments, lawyers fee, and refund of these commissions. It was estimated that the original bribe amounts totaled $600 million out of a contract price of $2.8 billion, or a staggering 21% of the contract price was paid in bribes.
In 2005. India orders 6 Scorpene submarines from DCNS for $1.8 billion. This purchase is also embroiled in a bribing scandal. But than most arms purchases in India are, so let’s just not be too surprised here. This time, the bribes appear to be over $100 million.
Now we come to our fair land. In 2000, RSN orders stealth frigates from DCNS in the face of competition from the American shipyard Littons, and the Swedish shipyard Kockums. DCNS wins this contract, but the really fishy thing is that the purchase price for these 6 frigates have never been revealed! Given the history of DCNS’s business methods, I find this very questionable. On other MINDEF purchase like the F-15SG, dollar amounts were revealed publicly. There might be a source somewhere with the contract price, but I am not aware of it. If DCNS follows normal business practices, than we can expect hundreds of millions $ to be paid out in unauthorized commissions, and bribes to Singapore politicians, and military leaders.
If the PAP purports to be transparent and corruption free, it must prudently order a probe into this deal in light of developments in Malaysia and Taiwan, just to assure themselves that everything is clean. It cannot be plausible that DCNS will commit bribery and corruption in every country that it does business with, except SIngapore. The French probe into the Malaysian submarine deal was initiated by a Malaysian Human Rights organization Suaram. Therefore, even if the govt. does not want to investigate this purchase, other NGOs in Singapore and even opposition parties can contact the French govt. I suggest that Chee Soon Juan take this up with the French govt., or even an opposition party can do so.
In addition, the people of Singapore must look at this in the overall context of the industry. The defense industry around the world is notoriously known as one of the most corrupt industries in the world. Singapore spends $10 billion per year on its military budget, one of the highest per capita in the world. The spending is uncontrolled with no watchdog in place. I have yet to meet one Singaporean who can explain to me why we need submarines, tanker aircraft, or even stealth frigates and F-15SGs. Even military men I know (up to rank of Colonel as I am not privileged to meet generals and ministers) can’t explain all these purchases and what they mean in the scheme of our overall defence strategy. Singaporeans work themselves into a frenzy over $2200 bikes and million dollar salaries, but this is potentially $billions in wrongdoing. Lets all ask some serious questions here.
