KUALA LUMPUR, Aug 26 — Opposition MP Lim Kit Siang today demanded Malaysian Anti-Corruption Commission (MACC) chief Tan Sri Azam Baki explain why it has not recommended charges for what is said to be the largest naval procurement scandal in Malaysian history.
The Iskandar Puteri MP noted that the MACC has been in possession of the forensic audit report on the RM9 billion littoral combat ship (LCS) procurement for the past two years — declassified recently — which highlighted all manner of financial irregularities.
“Reading the forensic audit report on the LCS scandal from 2011 to 2014 on ‘questionable transactions’, even with over 10 redacted pages all in black, the question every reader would ask is — why MACC, which is worth its salt, had not charged anyone for the RM9 billion LCS scandal for over two years!” he said in a statement.
Lim noted that the three corruption charges against former Boustead Heavy Industries Corp Bhd managing director Tan Sri Ahmad Ramli Mohd Nor had nothing to do with the LCS scandal, as they predate the issue of the Letters of Award for the RM9 billion LCS procurement which were issued on December 16, 2011.
Critics have questioned why some of the poignant issues highlighted in the Public Accounts Committee (PAC) report on the LCS project was not in the list of charges against Ahmad Ramli, who is also a former navy chief.
Ahmad Ramli, who was also chairman of the LCS Steering Committee, was on August 16 accused of abusing his position as director of the Boustead Nayal Shipyard Sdn Bhd (BNS) by offering contracts to companies without approval from the board.
In the first charge, he was accused of approving payment of RM13,541,140 to Setaria Holding Limited at the Standard Chartered Bank, 6 Battery RD, Singapore 049909 without approval from the BNS board.
The second charge was for approving a payment of RM1,360,716 payment to JSD Corporation Pte Ltd at the Overseas-Chinese Banking Corporation Limited in Singapore also without approval of the BNS board.
The final charge was for approving payment of RM6,182,295 to Sousmarin Armada Ltd at Standard Chartered Bank at 6 Battery Road, Singapore.
Lim said the LCS procurement scandal could very well turn out to be the “new 1MDB scandal”, noting that the declassified forensic audit report indicated high-level manipulation.
“Did the MACC investigate who is the very big ‘shark’ behind the RM9 billion LCS scandal?” he asked.
He added that national interests were at stake which warrant the establishment of a Royal Commission of Inquiry to investigate and identify the “big shark” behind the LCS scandal.
In its report released on August 8, the PAC said BNS was awarded a RM9.128 billion 10-year contract from 2013 to 2023 for the supply of the six LCS.
The PAC report also said the Malaysian government had to date already paid RM6.083 billion to the contractor, but none of the six LCS vessels has been completed. Based on the original schedule, five of the six LCS vessels should have been completed and handed over by August 2022.
According to the PAC, the project had run into cost overruns of RM1.4005 billion as the government’s payments to the Boustead Naval Shipyard were not fully used for the LCS project, noting that the RM1.4 billion overrun included RM400 million that was spent to pay off an old debt for the New Generation Patrol Vehicle project.
The PAC report said equipment kept in storage for the LCS project is estimated to be worth RM1.7 billion, with an estimated 15 per cent of these already obsolete.
