Scorpenes, OPVs: As cronies sell assets ahead of GE-13, Lodin denies taking BHIC private

As Umno crony tycoons begin cashing out on assets believed to held on behalf of top leaders including former premier Mahathir Mohamad and former Finance minister Daim Zainuddin, there is talk that BHIC - a firm implicated in the RM570million commission allegedly paid by French arms giant DCN to Prime Minister Najib Razak - may be taken private.

While Perimekar Sdn Bhd, a firm privately-held by Najib's close friend Razak Baginda, is believed to have received the kickback on behalf of Najib and in the forms of a support services and maintenance contract, it may not be the only firm involved. BHIC or Boustead Heavy Industries Corp Bhd was also accused of getting special deals to launder the commission corruptly paid to Najib so that he would sanction the Malaysian government's procurement of the two Scorpene submarines.

"Lodin was the main character when Najib was Defence Minister when the transaction was done in 2002," said PKR secretary-general Saifuddin
Nasution had told the press late last year, following disclosures from leaked US cables sent from the local mission to Washington.

Saifuddin was referring to BHIC chairman Lodin Wok Kamaruddin. Among tycoons who have been busy divesting assets include Vincent Tan and Ananda Krishnan, both known for their connections to the Umno elite.

Denial

Indeed, BHIC's unit, Boustead DCNS Naval Corp, was awarded a RM532 million contract related to the Scorpene submarines by the Defense ministry. The company now undertakes service support of Scorpene submarines from 2010 to 2015. Boustead DCNS Naval Corp is a 60:40 joint venture between BHIC Defence Technologies and the French-based DCNS, started in 2009.

Nonetheless, Lodin has denied the recent spate of news reports that BHIC would be taken private, saying plans were afoot to move the company forward.

"I don t think there s any intention on our part as a shareholder to take BHIC private. At the moment, we don t see any reason to privatise BHIC," Bernama reported Lodin as saying.

"I wrote to Bursa Malaysia that there is no intention on our part to take BHIC private. With that announcement, we would not be able to do that kind of exercise for at least in the next six months. I don t know how these rumours started. It s not true, not as far as we the shareholders of BHIC, (are concerned)."

The Armed Forces Fund Board (LTAT) is BHIC's largest shareholder, holding a direct 8.15 per cent stake in the company and an indirect 65 per cent stake via Boustead Holdings Bhd. LTAT holds about 60 per cent equity interest in Boustead Holdings.

6 OPV for RM9billion, more orders in the pipeline

Speculation had swirled that LTAT may choose to privatize BHIC at between RM5 and RM6 a share, driven by the jobs it is expected to secure over the medium to long-term.

On Dec 16 last year, BN Shipyard received the letter of award from the Defence Ministry for the contract to design, construct, equip, install, commission and to deliver six units of second generation patrol vessels, Littoral Combat Ships, the first expected in 2017 with follow on ships every six months thereafter. This contract carries a RM9 billion ceiling to be implemented over the 10th, 11th and 12th Malaysia Plans.

"A lot of people had the impression that the RM9 billion project award was given to BHIC. This is not quite true as the award was given to BN Shipyard (Boustead Naval Shipyard), an associate of BHIC," he said.

"BN Shipyard only got the letter of award for the next batch of combat vessels towards the end of last year. There was a gap of slightly over a year from the time we delivered the last ship of the first batch of six offshore patrol vessels. We had a lot of expenses to pay such as the staff salary and that affected BHIC's performance."

Lodin was referring to the 6 OPVs, made controversial when Defense minister Ahmad Zahid Hamidi announced its costs, which was overly high compared to similar quality and equipped vessels owned by other navies. Initially, Zahid mentioned RM6 billion, putting the cost at RM1 billion per ship or nearly 5 times the market value. Despite public anger, Zahid later revised the figure upwards to RM9billion.

Murder too

The Offshore Patrol Vessels procurement together with Scorpene purchases are typical of the BN government's murky military purchasing procedures. Few details are given out until the deal is sealed. Because the BN holds the parliamentary majority, it is able to ram through the approval for such acquisitions, while denying calls for a Royal Commission of Inquiry into the Scorpene purchases, which also involves a murder.

Altantuya Shaariibuu, a Mongolian translator, is believed to have been murdered for threatening to expose the corruption behind the deal when she failed to collect her portion of the kickback. She is alleged to have been Najib's mistress and also the lover of his friend Razak Baginda.

Two of Najib's former bodyguards were sentenced to hang for killing her. Chief Inspector Azilah Hadri, 34, and his colleague Corporal Sirul Azhar Umar, 39, were sentenced to death on April 9, 2009, after the judge found them guilty of killing Altantuya at a jungle clearing in Mukim Bukit Raja between 9.45pm on Oct 18, 2006, and 9.45pm the next day. Their trial went on for 159 days, and both men are still on death row.

But Malaysians are convinced the two cops were only the 'hired hands' and want the 'mastermind' to be brought to justice. After a near 3-year delay, deputy registrar Kanageswari Nalliah has fixed March 9 as the next case management date to enable Azilah's lawyer, J Kuldeep Kumar, to obtain a complete set of records. This will pave the way for the appeal hearing proper.

Najib is believed to be trying to delay the hearing until after the 13th general election expected to take place this year, so as not to draw negative publicity for himself in an election fight which may see him losing to Opposition Leader Anwar Ibrahim.

The Malaysian PM has denied ever receiving any kickbacks from DCN and has also denied involvement in the Altantuya case.

Malaysia Chronicle