Guan Eng: Seizure of Chinese firm’s RM1b not an attack on China

KUALA LUMPUR, July 17 — Malaysia’s forfeiture of RM1.1 billion belonging to a Chinese pipeline firm is not indicative of Putrajaya’s stance on Beijing, Finance Minister Lim Guan Eng (PH-Bagan) emphasised today.

Instead, the minister told Parliament that it was a purely law enforcement matter directed at China Petroleum Pipeline Engineering Ltd (CPP) over two dubious pipeline projects in East Malaysia that have since been terminated.

Lim reminded federal lawmakers that the previous Barisan Nasional administration paid out 88 per cent of the combined RM9.4 billion value of both projects despite no physical work being done.

“I would like to clearly state here that the actions we had taken was against a company, not a country. It was a company-specific action and not a country-specific action.

“The government has a responsibility to protect the nation’s interest if we find that there are any companies that is not carrying out work that benefits the country or is in the best interest of the public,” said Lim.

He also disclosed that the directive to seize the funds held in a bank account came from the Malaysian Anti-Corruption Commission (MACC).

He likened the situation to Malaysia’s demand for US investment bank Goldman Sachs to repay funds it allegedly defrauded the country of through bonds issuances on behalf of 1MDB.

Lim said the demand was also specific to the US firm and not the US.

He was replying to a supplementary question by Chan Foong Hin (PH-Kota Kinabalu) who wanted to know if Malaysia will negotiate on friendly and diplomatic terms with China over the seizure.

It was reported last week that Malaysian authorities seized the sum held in a HSBC bank account belonging to state-linked CPP and transferred it to the government-owned Suria Strategic Energy Resources Sdn Bhd (SSER).

CPP was the firm behind the RM9.4 billion Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) projects that the federal government cancelled on suspicion of fraud.

Beijing has indicated its intention to resolve the matter with Putrajaya through “friendly consultation”.

China’s foreign ministry spokesman Geng Shuang said the projects, which had been awarded to the subsidiary of state energy giant China National Petroleum Corporation, had been “carried out in accordance with the contract”, international newswire Associated Press reported today.