KUALA LUMPUR – A company that was appointed as a subcontractor to implement two supply and manufacturing packages for the littoral combat ship (LCS) project allegedly made a RM178 million claim to the government the same day the contract was awarded.
This is according to PKR deputy president Rafizi Ramli, who cited a finding from an internal investigation conducted on the controversial project.
“The probe showed that a second layer contractor – Contraves Electrodynamics Sdn Bhd (CED) – had made a claim amounting to RM178 million as a mobilisation fee, on the same day it was appointed, despite the company being set up just 45 days prior,” he said in a statement today.
Based on Companies Commission of Malaysia (SSM) documents, The Vibes reported that CED was established on February 23, 2012.
This came weeks before it was appointed by Contraves Advanced Devices Sdn Bhd (CAD) – the original contractor that was awarded the two packages – on April 9, 2012, to implement vital defence features valued at RM1.185 billion for LCS.
Rafizi said this violated the country’s Treasury Circular, the document that guides matters of financial governance.
He added that the circular emphasises that contractors must be appointed from among the most qualified suppliers based on technical capability and best value; must have the financial strength and good cash flow to implement the contract; and that payments must be made based on the project’s progress.
“These transactions (involving CED) are misappropriations that have violated the Finance Ministry’s payment regulations.”
This has led Rafizi to demand an explanation from Datuk Seri Najib Razak, who was finance minister at the time, over how a contractor that was only established for 45 days was allowed to make a RM178 million claim for a major defence project.
He added that many of the LCS project management of claims and payments had also infringed the Treasury Circular, including payments being made that were not in line with the project’s progress.
Najib and Rafizi have been embroiled in a war of words since the Public Accounts Committee released its report on August 4, on the government’s procurement of the six vessels, which found discrepancies and alleged wrongdoings.
This morning, the first individual linked to the contentious LCS project – former navy chief Tan Sri Ahmad Ramli Mohd Nor – was charged in court with three counts of criminal breach of trust (CBT).
The 78-year-old former managing director of Boustead Naval Shipyard Sdn Bhd (BNS), the company contracted to deliver the LCS to the government, was accused of fraudulently approving payments amounting to a total of RM21.08 million to three different firms without the approval of BNS’ board.
He pleaded not guilty to all charges after they were read to him before judge Suzana Hussain.
Ramli was among two individuals – the other being former LCS programme director Anuar Murad – who were found by PAC to be heavily involved and had abused their positions in the project. – The Vibes, August 16, 2022
