Report: Putrajaya seizes over RM1b from China-owned pipeline firm’s HSBC account

According to Singapore’s ‘Straits Times’, the federal government earlier this month ordered banking giant HSBC to transfer the funds in CPP’s Malaysian account to a company owned by the Ministry of Finance, Suria Strategic Resources Sdn Bhd. — AFP pic
According to Singapore’s ‘Straits Times’, the federal government earlier this month ordered banking giant HSBC to transfer the funds in CPP’s Malaysian account to a company owned by the Ministry of Finance, Suria Strategic Resources Sdn Bhd. — AFP pic

KUALA LUMPUR, July 13 — Putrajaya has reportedly seized more than RM1 billion of funds held by China Petroleum Pipeline Engineering Ltd (CPP), amid a dispute involving billion-ringgit pipeline projects here that was suspended since last year.

Singapore’s Straits Times (ST) cited sources saying that earlier this month, the federal government ordered banking giant HSBC to transfer the funds in CPP’s Malaysian account to a company owned by the Ministry of Finance, Suria Strategic Energy Resources Sdn Bhd (SSER).

“CPP firmly abides with the laws of Malaysia and is perplexed by the unilateral transfer of monies without notifying CPP,” the company was reported telling ST.

“Once we have further information, CPP will take the necessary and appropriate actions to protect its rights. We hope that our Malaysian counterparts can resolve this with us through amicable means.”

HSBC’s Kuala Lumpur branch however declined to comment over the report.

In May, Putrajaya said it is now negotiating with China-based contractors on the total compensation amount to be paid by SSER, following the cancellation of the RM9.4 billion pipeline.

SSER was incorporated as a wholly-owned unit of the Finance Ministry in 2016 to undertake two projects: the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP).

Both contracts were awarded to China Petroleum Pipeline Bureau in November 2016 in contracts signed by former Treasury secretary-general Tan Sri Irwan Serigar, who is also SSER chairman.

In June last year, Lim revealed that the government had paid RM8.3 billion for the two projects worth RM9.4 billion despite only completing 13 per cent of the work.

Subsequently, the projects’ engineering, procurement, construction and commissioning contracts and other associated contracts have been terminated in August last year. Together, all the contracts were valued at RM10.4 billion.

CPP had previously said it would negotiate with Malaysia for reasonable compensation over the cancelled projects.

 

The MPP is a RM5.35 billion project to build a 600km oil pipeline from Jitra to Port Dickson while the TSGP is a 662km gas line connecting the Kimanis Gas Terminal to Sandakan and Tawau at a cost of RM4.06 billion.

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