China firm insists no link to 1MDB debt payments

China Petroleum Pipeline Engineering Co Ltd says all payments made are aboveboard and that Tony Pua’s claims are baseless.

PETALING JAYA: China Petroleum Pipeline Engineering Co Ltd (CPP) today denied that funds from its two pipeline projects in Malaysia were used to pay debts linked to 1MDB.

“We wish to make it very clear that all funds from Export-Import Bank of China (Exim Bank China) were only paid directly to CPP’s bank accounts.

“This is in accordance with the strict anti-money laundering banking rules, regulations, and signed legal agreements,” CCP said in a statement.

“There were absolutely no funds paid to any third-party Cayman Island-based company and/or companies whatsoever. Any allegations or statements to the contrary are completely false.”

The CCP was denying remarks by Damansara MP Tony Pua, in a BBC article, on the possibility of links between 1MDB and the pipeline projects in Kedah and Sabah.

CCP said the article “contains blatantly false information with respect to the company’s pipeline projects in Malaysia”.

It added: “We request that the media be factual in their reporting and not be influenced or pressured by unnamed sources to report based on false information that defames CPP.”

In the interview with the BBC, Pua, a special officer to Finance Minister Lim Guan Eng, said the ministry believed the money was being used to cover debts linked to 1MDB.

“The entire project smelled like a scam. [There were] clearly elements of money laundering taking place,” he said, adding that the building work itself had not even started. Only the consultancy studies had been completed, he said.

“We were giving money out – to a Chinese company – and we suspect this money is being funnelled to parties related to the previous administration.”

It was reported that the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) were awarded to a company connected to Low Taek Jho, or Jho Low, who has been named by US authorities as the mastermind behind the alleged theft of billions from 1MDB.

The company in question is Suria Strategic Energy Sdn Bhd (SSER), a wholly-owned finance ministry subsidiary set up in 2016.

The projects were awarded to China Petroleum Pipeline Bureau (CPPB) in November 2016 and were signed by SSER chairman Irwan Serigar.

SSER’s president, Mohammed Azhar Osman Khairuddin, is also a director of Putrajaya Perdana Sdn Bhd, a company that Lim had said was linked “directly with Low Taek Jho”.

Last month, Lim’s revelation that 88% of the contract cost, or RM8.3 billion, had been paid out by SSER despite only 13% of the work being completed, made headlines.

Soon after, the two projects were suspended, along with the multi-billion ringgit East Coast Rail Link.

According to the BBC report, CPPB did not respond to emails on Pua’s claims.

The Chinese embassy in London told the BBC that China had always “conducted economic, trade and investment cooperation with Malaysia, as well as other countries, with the principle of mutual benefit and win-win outcomes”.  FMT