SIAP SEDIA UNTUK DI SIASAT.

French financial police have searched the offices of naval arms manufacturer DCNS and industrial group Thales in connection with a probe into the sale of submarines to Malaysia, a judicial source said today.

Documents were seized in the operation, which was carried out last week, the source added.

Thales declined to comment on the matter.

DCNS told AFP it "neither confirms nor denies this information."

"A judicial investigation is under way and we can make no comment."

The Paris prosecutor's office in March opened an investigation into the 2002 sale following a complaint lodged last year by the Malaysian human rights group Suaram.

The group alleges that Armaris, a subsidiary of Thales and the DCN, as the DCNS was formerly known, paid a commission of 114 million euros (140 million dollars) to the Malaysian company Perimekar, linked to people close to now Prime Minister Najib Razak.

'Illegal' commissions

Najib in 2002 was defence minister and was responsible for negotiating the contract.

Since 2000, the payment of commissions on contracts linked to foreign leaders amounts to corruption under French law.

The DCN in 2002 joined Thales and Spanish naval construction group Navantia in a contract to sell Malaysia three submarines for around one billion euros.

A spokesman for the Malaysian prime minister's office in late April insisted there was "no case" to answer.

He mantained that the deal had been free of graft and that Perimekar had not improperly benefited from it.

- AFP