The Thales Group’s Long History of Corruption

A Kang Ding class Frigate of the Taiwanese Navy. Beneath its beauty lies a scandal full of bribes and at least one death. Photo courtesy of Wikimedia Commons.

One day, after I kept seeing Thales’ name splashed all over the news related to the purchase of our Frigates from Hyundai Heavy Industries (HHI), I just suddenly got this idea of researching about corruption news related to them on the internet. And I was quite surprised to see virtually a deluge of detailed materials about it come up on my screen. Hence I thought it would be a good idea to organize my findings and put them into this blog.

’The Thales Group’1
But first, let’s learn a little bit about the company, previously known as Thomson CSF until they changed their name in 2000 to the Thales Group. It is a pretty big company with around 64,000 employees in 56 countries, with a revenue of EUR 15 billion (around USD 18.54 billion at the exchange rate of EUR 1 = USD 1.24) in 2016.

Thales claims that its revenues are split 50-50 from both the Civilian and Defense markets where it provides a wide range of products in the fields of Aerospace, Space, Ground Transportation, Defence and Security.

Around a quarter (25.8%) of it is owned by the French government, with the rest being owned by Private Entities. At first glance, the company is really quite impressive, but beneath that facade lies a long history of corruption with its business dealings.

I am enumerating below the major corruption news about the company during the last three decades, starting from the oldest to the newest in terms of decisions handed out by courts and other institutions.

’Kang Ding Frigates, Taiwan’
In 2011, a French Court sentenced Thales to pay USD 920 million in fines for bribes related to the sale of Kang Ding class Frigates (a derivative of the La Fayette class Frigates) in 1991 to Taiwan.2 The fine was the biggest ever in a French corruption case at that time.

What happened was that Thales (the prime contractor of the deal) bribed officials of the Taiwanese government to buy the Kang Ding Frigates of which they provided the major systems. Thales also owned part of the company DCNS (who changed their name to Naval Group in 2017) that built the ships. Reportedly USD 500 million worth of bribes were paid out then, and the price of the Frigates were inflated by USD 800 million.

The corruption scandal was unraveled when Yi Chen Feng, a Taiwanese Naval Officer investigating the scandal as it was starting out, was killed in 1993. Thales’ Agent in Taiwan at that time, Andrew Wang was later convicted in 2000 by a Taiwanese Court for Feng’s murder, but only in absentia as he was able to flee the country shortly after the murder.

Wang served as the conduit for Thales’ bribes to Taiwanese officials, he died in 2015 in the United Kingdom (UK). The above details I noted down are just a summary, if you want to know more about the Kang Ding Frigate scandal in Taiwan, I recommend reading the following articles:
– “Taiwan – The Lafayette Affair” (
– “Taiwan’s Frigate Corruption Investigation: Can they Collect?” (

’Scorpene Submarines, Malaysia’3
In 2017, French Investigators indicted (meaning formally charged in court) a former Chief Executive Officer (CEO) of Thales named Jean-Paul Perrier for bribery related to the sale of Scorpene class Submarines to Malaysia in 2002.

The shipbuilder Naval Group of which Thales owns 35% of,4 reportedly paid around USD 132 million in “commissions” to win the Contract to supply Submarines to Malaysia.

The commissions were paid to a shell company linked to Abdul Razak Baginda, a former close associate of current Malaysian Prime Minister Najib Razak. Court proceedings for this case is still ongoing.

’Murder in Malaysia’5
Tragically, at least one person was killed in relation to this Scorpene scandal, and her name was Altantuya Shaaribuu, a former model from Mongolia and a mistress of Baginda.

Shaaribuu was reportedly blackmailing Baginda to get a cut of the bribes, hence she was killed by two of Razak’s former bodyguards in 2006. She was pregnant with a child when she was shot in the head twice and her body blown up with a C4 explosive obtained from the military.

Parts of her body were later recovered, and Razak’s bodyguards were caught and sentenced to death by a Malaysian court in 2008. However, the possible “Big Fishes” in the case like Baginda and Rajak went free.

The details I noted above about the Scorpene Submarine scandal in Malaysia is just a summary, if you want to know more about it, I recommend reading the following articles:
– “The Malaysia Scorpene Submarine Affair” (
– “Scorpene’s Sting: Malaysia’s Bribery & Murder Scandal” (

’World Bank, Cambodia’6
In 2004, the World Bank (WB) banned Thales and one of its employees from receiving any of its Contracts due to “fraudulent practices”. Thales was banned for one year while one of their employees, a French national named Jeremy Purce, was banned for five years.

It turned out that Thales, who was hired by the Cambodian Government to oversee some of their procurement and financial management processes, made falsified claims to allow a favored supplier to be awarded the Contract for the supply and maintenance of Motorcycles worth USD 6.9 million that was funded by the WB.

’Bribery Fund, and Allegations’7
In mid-2000, a former head of one of Thales’ subsidiaries named Michel Josserand made a couple of revelations related to bribery practices by Thales. Josserand claimed that due to some conflict with his superiors at Thales, he left the company and was employed by the European Aeronautic Defence and Space (EADS) Company (now known as Airbus).

However, Josserand was later charged in court of corruption for activities he made when he was still at Thales, and subsequently sentenced to 18 months in jail. Josserand later said that he was just used as a scapegoat by Thales and then made the revelations. The first revelation was that Thales reportedly maintained a fund to bribe government officials to corner Contracts.

The fund was reportedly equivalent to at most 2% of Thales’ annual revenue which in 2004 was around USD 12.5 billion, making the fund worth approximately USD 250 million then. Josserand also claimed to have known of a plot by Thales to bribe government officials in Greece with the equivalent of up to 10% of the Contract price of the Security Equipment to be used in the 2004 Olympics in Athens.8 Thales and the Greek government of course vehemently denied all these allegations by Josserand.

’Submarine Deal, Brazil’
In May 2017, French Prosecutors started investigations of the Naval Group for bribery related to a deal with Brazil in 2008 that included the sale Scorpene Submarines, plus one nuclear powered Submarine and construction of a Submarine facility.9

There are no indictments yet, but should it reach that point, Thales being an owner of the Naval Group will likely also be included in the indictment just like in the case of the Scorpene deal in Malaysia.

The main reason for the investigation is due to the fact that the Naval Group’s partner company in Brazil for the deal, a conglomerate named Odebrecht was found guilty in April 2017 by an American court of bribing government officials in many countries and fined USD 2.6 billion.10 Because of this, the Brazil Submarine deal came under suspicion also.

’Frigates and Jacob Zuma, South Africa’11
Just this March 2018, both Thales and Zuma were indicted by the new South African government for the crimes of Corruption, Fraud, Money Laundering and Racketeering.12 This latest indictment of Thales is somewhat relevant to us as it involves the sale of Thales’ various systems to naval ships.

It all started in 1997 when Thales was awarded a ZAR 2.6 billion (USD 221 million in today’s money) contract to provide the Combat Management System (CMS), Air and Surface Search Radar and Hull Sonar of the Valour class Frigates of the South African Navy (SAN).

To cut the story short, just like in previous cases, Thales paid bribes for them to land the contract. However, word somehow started to come out of the irregularity a couple of years later.13

So to cover it up, Thales decided to pay even more bribes to Jacob Zuma who became the Deputy President of South Africa from 1999 to 2005, and then President of South Africa from 2007 to 2018. The questionable payments received by Zuma reportedly totaled 783 instances in his years in office including a ZAR 500,000 (USD 42,000 in today’s money) a year in bribes.

This annual payment was notorious as one of the main evidences showed an encrypted fax showing Thales’ offer to Zuma.14 Since the fax was encrypted, both parties probably thought it was safe but investigators were able to retrieve it later. Other bribes came in the form of Legal Fees, Expensive Clothes, Trips Abroad, Campaign Contributions, etc. all paid by Thales.

’Parting Shot’
From the above cases, we can see that Thales has had a long history of corruption, and they were very generous at it, too. In Filipino, that would translate to being ‘galante’. Note that of the cases above, only two were allegations (those made by Josserand about their Bribery Fund and bribing the Greek government) and one is ongoing investigation (Submarine deal in Brazil).

The rest are either indictments (Jacob Zuma in Africa and the Scorpene affair in Malaysia), sanctions (banned in Cambodia by the World Bank) and fines (the Kang Ding affair in Taiwan).

In fairness, Thales is not the only one out there, like in the case of Jacob Zuma, for example. A couple of other major defense companies along with Thales were also indicted for paying bribes to Zuma. Even their adversary in the ongoing Frigate Saga of the Philippine Navy, HHI, were involved in some corruption cases also.

During my research for articles to provide the facts for this blog, I found many, big, international defense companies that have been involved in some sort of corruption. If fact, it seems that all of them were involved in it at one time or another.

There is just too much money, too much temptation in defense procurement for people not to try to take advantage of. As we have seen above, even more progressive countries like Taiwan and Malaysia have huge corruption problems with their defense purchases which involved bribes running up into the hundreds of millions of dollars, and even to the point that people were being killed for it.

Now as our government moves forward with major procurements for the modernization of the Armed Forces of the Philippines (AFP), it needs to be extra careful to avoid corruption as much as possible. Certain safeguards are already in place in our Procurement Law to help prevent that, but it may still need to be improved so we can have minimized or even corruption free procurements for the AFP modernization.

A Valour class Frigate of the South African Navy. Its beauty is tainted by decades of corruption. Photo courtesy of Wikimedia Commons.


  1. The Thales Group Corporate Presentation,
  2. France, Thales to pay record bribes fine,
  3. France indicts 2 former bosses in Malaysia submarine graft case,
  4. Naval Group Governance,
  5. Malaysian police convicted in Mongolian model’s murder mystery to hang,
  6. Cambodia: World Bank Sanctions Thales Engineering and Consulting S.A. and Others in Demobilization Project,
  7. Thales de nouveau au centre d’un scandale de corruption (Thales again at the center of a corruption scandal),
  8. Former minister hits back at corruption charges,
  9. France Suspects Bribery in Multibillion Dollar Submarine Sale to Brazil,
  10. U.S. fines Odebrecht a landmark US$2.6 billion for Bribery,
  11. How French arms dealer ‘kept Jacob Zuma in its pocket’,
  12. French arms company Thales to be prosecuted along with Zuma – NPA,
  13. How the case against Shaik implicates deputy president,
  14. Thales’ encrypted fax bribe offer to Jacob Zuma,

2 thoughts on “The Thales Group’s Long History of Corruption”

  1. I would have loved the article better if it tackles all three players in the Philippine frigate controversy: The long history of corruption in Thales Nederland, Hanwha and Hyundai Heavy Industries.

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