PARIS (AFP) - A close associate of Malaysian Prime Minister Najib Razak has been charged in France over alleged kickbacks in the 2002 sale of submarines to his country, a judicial source told AFP on Tuesday (Aug 1).

Abdul Razak Baginda advised Najib when the now-prime minister was defence minister between 2000 and 2008. Najib oversaw the deal worth nearly one billion euros (US$1.18 billion) to buy two Scorpene-class submarines and one Agosta-class submarine from French naval dockyards unit DCN, which is linked to French defence group Thales.

An investigation into the deal was launched in 2010 in response to a complaint from Malaysian rights group Suaram. As part of the deal DCN agreed to pay 30 million euros to Thales' Asian unit, Thales International Asia (Thint Asia).

The investigation revealed that another company, Terasasi, whose main shareholder was Razak Baginda, received an equivalent sum for what was billed as consultancy work, but which investigators believe was really a front for kickbacks.

Razak Baginda was charged in France on July 18 with "active and passive complicity in corruption" and "misappropriation of corporate assets", the French judicial source said.

Four French defence industry executives have already been charged since the investigation began. They are two former chairmen of DCNI, Philippe Japiot and Dominique Castellan, and two former heads of Thint Asia, Bernard Baiocco and Jean-Paul Perrier. All four men deny the charges against them.

The French investigators are also looking into allegations that 114 million euros was paid to a purported Malaysia-based shell company, Perimekar, as part of the deal. That company was controlled at the time by Razak Baginda's wife.

However, that payment is likely to ultimately fall outside the jurisdiction of the investigation because it was not made to a French company.

The affair emerged spectacularly in 2006, when Abdul Razak's Mongolian mistress - who was said to have demanded a payoff for working as a language translator in the deal - was shot dead and her body blown up with plastic explosives near Kuala Lumpur.

A Malaysian court later cleared Abdul Razak of abetting the murder, sparking an outcry and opposition allegations of a cover-up. Najib Razak, the prime minister, is currently embroiled in a money-laundering scandal involving his country's state economic development fund 1MDB that he founded.