The Malaysian wife of Sri Lankan businessman Bukary Syed Abu Tahir, accused of being involved in a nuclear-trafficking network, had a stake in a company controlled by Prime Minister Abdullah Ahmad Badawi's son, said a report today.

According to the Asian Wall Street Journal (AWSJ ), Nazimah Syed Majid acquired a 27.5 percent interest in Kaspadu Sdn Bhd in 1998, of which the majority shareholder is Kamaluddin Abdullah .

Kaspadu, then in turn, acquired a controlling interest in Scomi, a listed oil-and-engineering company, in mid-2000, making Nazimah an indirect stakeholder in that company as well. Scomi was listed on the Kuala Lumpur Stock Exchange in May 2003 and is now 50 percent-owned by Kaspadu.

Scomi's subsidiary Scomi Precision Engineering Sdn Bhd (Scope) was investigated and subsequently cleared by the Malaysian police on Feb 9 for allegedly producing nuclear components.

Severing ties

"The shareholding, amounting to 13.75 percent of Scomi's stock, was sold last month to other Scomi investors, including Abdullah's son, Kamaluddin, for an undisclosed amount, according to filings with the Kuala Lumpur Stock Exchange," said the report.

It added that the latest transaction came two months after US and British intelligence agencies informed Malaysian security officials that Tahir was a major operative for Pakistani scientist Abdul Qadeer Khan, who confessed to illicitly selling nuclear know-how and hardware to Libya, Iran and North Korea.

"But a senior Malaysian government official said the sale of her (Nazimah) stake in the company last month reflected Scomi management's intent 'to cut all ties' to the Tahir family," said the financial daily.

Scomi was implicated in the nuclear trafficking scandal after it was alleged to have its subsidiary supplied centrifuge components for Libya's uranium-enrichment programme through Scope.

Scope was set up in 2001 specifically to produce the components for Gulf Technical Industries LLC (GTI) in Dubai in a deal arranged by the Dubai-based Tahir. Scope subsequently dispatched four shipments of parts to Gulf Technical in 2002 and 2003.

Scope's role in the nuclear trafficking came to light when European intelligence officials intercepted a Libya-bound ship last October and seized five containers that contained centrifuge parts packed in boxes carrying the name Scomi Precision Engineering Sdn Bhd.

Officials from the Shah Alam-based company later said the parts were components made for the auto, oil and gas industries and that they had no knowledge of the end use of these parts.

Malaysian authorities contended that Tahir - who was questioned but not detained by the police - misled Scomi executives about the intended use of the centrifuge parts it manufactured.

Meanwhile, AWSJ said it was unable to contact Nazimah or her husband for comments. It added that Scomi executives did not respond to written questions regarding Nazimah's investment in the company.

The daily also reported that Tahir struck up a friendship with Kamaluddin in the mid-1990s while he was operating a computer-supply and trading business in Dubai.

Diplomatic row

Last Thursday, US President George W Bush said Tahir used his computer company as a front for the proliferation activities of the Abdul Qadeer network.

"Tahir directed the Malaysia facility to produce these parts based on Pakistani designs, and then ordered the facility to ship the components to Dubai. Tahir also arranged for parts acquired by other European procurement agents to transit through Dubai for shipment to other customers," he said in a speech made at Washington DC's National Defense University.

The president also accused Scope of being part of Abdul Qadeer 's clandestine nuclear black market network in which Tahir was said to be the "chief financial officer and money launderer".

However, Bush added that Malaysian authorities have assured him that Scope was no longer producing centrifuge parts.

The president's speech evoked criticism from Malaysian leaders, including Abdullah, for unfairly singling out the country's role in the nuclear trading network.

Foreign Minister Syed Hamid Albar said Malaysia was being targeted because it was a Muslim country.

The US later rejected this charge, saying that it never said the Malaysian government was involved in the black market sale of equipment that could be used for making nuclear weapons.

In a related development, the Singapore Straits Times today quoted Under-secretary for Arms Control and International Security John Bolton as saying that Bush had merely said that a "company based in Malaysia" was involved.

"There is certainly no whiff of an allegation in the president's statement that the government of Malaysia had the slightest thing to do with it," he added.