Malaysia

LCS scandal: CED makes RM178 mil claim to govt on day it got appointed: Rafizi

PKR deputy president says procedure violates country’s financial guidelines

Updated 3 years ago · Published on 16 Aug 2022 1:50PM

LCS scandal: CED makes RM178 mil claim to govt on day it got appointed: Rafizi
PKR deputy president Rafizi Ramli cites an internal investigation conducted on the controversial littoral combat ship project to claim that Contraves Electrodynamics Sdn Bhd filed a RM178 million claim to the government the same day the contract was awarded. – Hishamuddin Hussein Facebook pic, August 16, 2022

by Amar Shah Mohsen

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

Related News

Malaysia / 2w

Don't repeat old mistakes, five ships must be completed according to cost and schedule – PAC

Malaysia / 2y

7.7 mil people registered in Padu, 2.5 mil cyberattacks, but not one success: Rafizi

Malaysia / 2y

Something fishy: More leaders berate Rafizi as Padu deadline draws near

Malaysia / 2y

Padu system to avoid leakages in distribution of subsidies, aid, says PM

Malaysia / 2y

Progressive wage policy a strategy to boost employee compensation

Malaysia / 2y

Rafizi says RON95 targeted subsidy to start after June 2024

Spotlight

Malaysia

‘No such thing as Bangkok Move or Dubai Move’ – Ahmad Zahid

Malaysia

KSN: Rectify long waiting times, service challenges and workforce constraints at UMMC now

Malaysia

LGE trial: 4 to 5 meetings held before open tender bidding for road, undersea tunnel projects - witness

Malaysia

Najib marks 73rd birthday as legal battles continue from behind prison walls

Malaysia

Court orders police to probe foreign management institute

Malaysia

UMNO pushes back against Hamzah’s ‘PBN’ proposal, says BN-PN cooperation is not a new coalition

Malaysia

Form four student killed after car crosses into opposite lane in Setiu crash

World

France heatwave death toll rises to nearly 5,800 as extreme temperatures trigger record mortality

Culture

Penang: Three refurbished tourism attractions to be ‘reopened’ soon

By Ian McIntyre

You may be interested

Malaysia

MACC records statements from 10 KWAP and MOF officials in RM200m eFishery investment probe

Malaysia

BN-PN alliance could secure 25 seats in Negeri Sembilan - Ahmad Maslan

Malaysia

Teen 'transporter' arrested as police seize RM3.04 million in Johor meth crack down

Malaysia

It’s humane economy rooted in justice, dignity and moral purpose over political popularity - Anwar

Malaysia

Unity Government’s record allows for greater cost-of-living relief - Anwar

Malaysia

KL police stress round-the-clock readiness to safeguard city

Malaysia

Malaysia will not bow to US congressional pressure over Israeli nationals’ issue - Loke (UPDATED)

Malaysia

KSN: Rectify long waiting times, service challenges and workforce constraints at UMMC now