The daily 'Liberation', in Tuesday's Nov 11 edtion, claimed that Zardari received $4.3 million in kickbacks from the sale of three Agosta-90 submarines for 825 million euros.
According to the daily report, investigators believed that the non-payment of the full amount of the agreed kickbacks may have led to the deaths of 11 French nationals in a 2002 terror attack in the port city of Karachi.
However, a spokesman of Islamabad said the government has taken serious exception to the claims made by the daily.
"Zardari was neither the President nor the Prime Minister nor the Defence Minister when the submarines were purchased," the spokesman said.
"The purchase of equipment by the Armed Forces of Pakistan is done through a proper competitive process under the supervision of the Ministry of Defence," he added.