Sarkozy involved in Pak submarine scandal: Report

All troubles not over for Nicholas Sarkozy? It certainly appears to be, as the Luxembourg police on Wednesday named the French president as the creator of a company that handled million of pounds in illegal funds, a report in TimesOnline stated.

An inquiry appears to link Sarkozy to a case involving the sale of French submarines to Pakistan in 1994. It will strengthen suspicions of French probe agencies that the money from the contract was funnelled to finance a 1995 unsuccessful presidential campaign of Edouard Balladur against Jacues Chirac, managed by Sarkozy, who was then budget minister.

Some French judges believe that a dispute between France and Pakistan over the unpaid commissions led Pakistani agents to bomb a bus carrying French-employed shipyard workers in Karachi in 2002. Fourteen people died in the attack, 11 of them French. The attack was originally blamed on Al Qaeda, the report said.

Luxembourg police, working for the French judges, said that, in 1994, Sarkozy "directly supervised" the creation of a Luxembourg offshore company called Heine. Its aim was to channel the secret payments, the report said.

"Eventually, part of the funds that passed through Luxembourg came back to France to finance French political campaigns," the police report said.

The French president is immune from legal action, but there was a mild sense of a crisis in Paris; however, there was no comment from Elysée Palace yet, the report added.

Image: Nicholas Sarkozy