JOHOR BARU, Aug 4 — PKR deputy president Rafizi Ramli today alleged that at least RM890 million in funds had been misappropriated from the littoral combat ship (LCS) project which began in 2011.

He claimed this involved allegedly fraudulent acts through money being transferred to parties with the aim of defrauding the contract, and the duplication of contracts with multiple claims, among other purported irregularities.

“The amount of misappropriation of funds has been identified through an internal investigation conducted on the project.

“So far this year, this has cost RM6 billion despite not one warship having been successfully completed,” said Rafizi in a statement today.


He was commenting on Public Accounts Committee (PAC) chairman Wong Kah Woh’s earlier statement regarding the findings of the committee which examined the handling of the LCS project which has been going on for the past 11 years.

Following that, Rafizi said he believed the internal investigation has reached Defence Minister Datuk Seri Hishammuddin Hussein.

“As the minister who signed the contract in 2014, he is also the minister who signed a supplementary agreement to revive the project in May 31 this year.


“Why until now has he not taken action to deal with the discovery of the embezzlement amounting to RM890 million because not a single case has been brought against the parties involved?” he asked.

Rafizi said among the country’s leaders involved in the project back in 2011 was then defence minister Datuk Seri Ahmad Zahid Hamidi, who was responsible for issuing the Letter of Appointment (LOA) to Boustead Naval Shipyard Sdn Bhd (BNS) to build and supply six second generation patrol vessels (SGPV) LCS worth a total value of RM9 billion.

He said the federal government also signed a final contract amounting to RM9 billion with BNS on July 17, 2014.

“The prime minister at the time the LOA and the project’s contract was completed was Datuk Seri Najib Razak,” he said.

Rafizi also pointed out that the alleged scandal will ensnare Umno, which had previously accused Pakatan Harapan (PH) of selling national assets, ahead of the 15th general election (GE15).

“While under Umno’s administration, the country’s weaponry and defence were neglected and lagged behind that of our neighbours like Indonesia.

“The plight of mostly Malay servicemen was ignored when the funds that were supposed to benefit them were wasted due to embezzlement,” he said.

The former Pandan MP said that he will continue to reveal detailed information about the alleged embezzlement until the leaders involved came forward with an explanation.

“The scandal involving the abandoned LCS happened under their supervision and management. It is their duty to come forward and offer an explanation to the people,” he said.

At the same time, Rafizi said the LCS episode is seen as being critical because it has a wide-reaching impact, including affecting the welfare of servicemen and the national defence system.

The LCS project, worth RM9.128 billion, was awarded to BNS by the government through the Defence Ministry in 2011 and a total of RM6 billion has been paid for the purpose of building the six ships simultaneously.

However, to date, none of the LCS has been completed and handed over to the Royal Malaysian Navy (RMN). This is despite the contract agreement dated January 2014 outlined that LCS 1, the first of two ships, should be handed over to the government by April 2019.