KUALA LUMPUR – Datuk Seri Najib Razak could have committed criminal breach of trust for setting up the littoral combat ships (LCS) project in a way to obtain funds to repay bad debts of an older defence project, said Pakatan Harapan’s (PH) Mohamad Sabu and Liew Chin Tong.
In a joint statement, the former defence minister and deputy said Najib, who was prime minister when the LCS project under Boustead Naval Shipyard Sdn Bhd (BNS) was approved in 2011, had meant to use it to cover debts accumulated by the New Generation Patrol Vessel (NGPV) project to build six offshore patrol vessels by a different company, PSC Industries Bhd.
PSC Industries was engaged by the government to deliver six NGPV between 1998 to 2010, with a total cost of RM9 billion. None of the vessels promised to the navy were delivered.
“The RM9.128 billion is meant to procure the LCS project, not as a ‘bailout’ for the NGPV project. The use of funds in this manner is considered a criminal breach of trust under Section 409 of the Penal Code,” Mohamad and Liew said in a joint statement.
“The justification here is to resolve the loss from the old agreement with a new agreement. A crime has been committed here.
“Or had PM6 (Najib) originally intended for the LCS project which was done via direct negotiations to resolve the bad debts accumulated by the NGPV (project)? Najib’s answer to this will help us all understand the problems surrounding the LCS project,” they said.
Mohamad was defence minister and Liew deputy defence minister when PH was the federal government from 2018 to early 2020.
Their statement today was in response to Najib’s claim that Boustead Holdings Bhd, whose biggest shareholder is the Armed Forces Pension Fund (LTAT), had to bailout the NGPV project which was awarded in 1998 during Tun Dr Mahathir Mohamad’s first tenure as prime minister.
That funds meant for the LSC project were used to pay off bad debts from the NGPV project had also been confirmed by LTAT chief executive officer Ahmad Nazim Abdul Rahman recently, following revelations on the LSC scandal in the recently-released report on the project by Parliament’s Public Accounts Committee (PAC).
He said on Facebook that BNS had been forced to use part of the funds because parent company Boustead Holdings had acquired the debt-ridden PSC Industries earlier.
The contract to build the NGPVs had also been worth RM9 billion.
The PAC’s report, released on August 4, highlighted the problems that led to the failure of the LCS procurement initiative, including cost overruns as well as a multi-layered structure of contracts and sub-contractors to build the six LCS.
PAC had also highlighted that payment made by the government was not used in the procurement of LCS, but that RM400 million had been used by BNS to settle the bad debts of the older NGPV project.
Mohamad and Liew said Najib cannot blame the LCS scandal on other parties as the Pekan MP had been the defence minister from 1990 until 1995, while serving a second stint from 1999 to 2008. – The Vibes, August 12, 2022
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