Hisham urged to explain LCS contractor's finances in Dewan Negara

 

Former defence minister Mohamad Sabu and his then deputy Liew Chin Tong want an explanation of the finances of Boustead Naval Shipyard Sdn Bhd (BNS), the main contractor of the RM9 billion Littoral Combat Ship (LCS) project.

The duo, who helmed the Defence Ministry during Pakatan Harapan’s federal administration, urged Defence Minister Hishammuddin Hussein (above) to explain in the Dewan Negara.

In a joint statement, Mohamad and Liew concurred with three senators that the Public Accounts Committee (PAC)’s findings on the LCS scandal should be debated in the Dewan Negara soon.

Senators Lim Hui Ying, Fadhlina Sidek, and A Kesavadas Nair proposed yesterday that the LCS issue be debated in the upper house before the end of the current session on Aug 16.

“The minister has to answer the financial status of BNS at the Dewan Negara next week. Firstly, what is the amount of BNS debts as of August 2022?

“BNS’ debt stood at RM1.738 billion as of August 2019. This included a RM869 million loan from a financial institution and RM767 million debts to original equipment manufacturers,” said Mohamad and Liew.

Former defence minister Mohamad Sabu (left) and his then deputy Liew Chin Tong.

They also accused former prime minister Najib Abdul Razak of lying when he said the Defence Ministry under Harapan froze the LCS project for 15 months.

“The LCS project was hit by financial problems before Harapan took over,” they said.

They also questioned if Hishammuddin agreed that part of what the government paid for the LCS - RM400 million - was assigned to BNS to settle its debts for a past project, namely the New Generation Patrol Vessels (NGPV).

“Did the LCS project kick-off with the purpose of 'rolling' the bad debt of NGPV?” they asked.

RM53 billion for 30 years

“We wonder why BNS, in June 2021, proposed a contract or an order book amounting to RM53 billion from the government for the purpose of obtaining a loan via sukuk issuance amounting to RM4 billion.”

The RM53 billion referred to maintenance, repair, and overhaul work for 30 years.

“In the PAC report, the committee was informed that the government only agreed last year to give a three-year order book.

“On April 20, Hishammuddin said the LCS project would continue but no one, including the PAC, were informed of the details, funding method and timeline.

“Hishammuddin and the government must provide a transparent and clear explanation and pledge there will not be any misappropriation of funds,” said Mohamad and Liew.

Last week, the PAC tabled its report on the procurement of the LCS to the Dewan Rakyat, which highlighted numerous irregularities in the project.

On Aug 4, Hishammuddin said his ministry and all related stakeholders will take into account recommendations made by the PAC in proceeding with the procurement of the LCS.

‘Tantamount to abuse of power’

Separately, Amanah’s Sepang MP Mohamed Hanipa Maidin said it was wrong for BNS to use the LCS funds outside its intended purpose.

“With the greatest respect, I am of the view that the allegation that money slated for the LCS was used to pay off bad debts is legally invalid. In law, such an act is tantamount to a tort of misfeasance in public office,” he said in a statement today.

“Be that as it may, I am also of the view that all the relevant parties directly or indirectly involved in such an unfortunate fiasco may be sued as potential respondents, such as the relevant minister, BNS and the government,” he said. 

“Who can act as the potential plaintiff or claimant? Assuming any party intends to proceed with a judicial review application, the best claimant would be any of the Armed Forces Pension Fund (LTAT) contributors who may be considered as an ‘aggrieved party’ in law, thus possessing the necessary locus standi to sue.

“The claimant may seek from the court, inter alia, a declaratory relief declaring the act of all the aforementioned respondents to be illegal and invalid and in turn tantamount to abuse of power,” said the Amanah leader.

Yesterday, LTAT chief executive officer Ahmad Nazim Abdul Rahman said BNS was forced to use LCS funds to pay off bad debts from an earlier contract to build offshore patrol vessels (OPV). 

This was because, he said Boustead Holdings Bhd - whose biggest shareholder is LTAT - was compelled at one point to take over the debt-ridden PSC Industries Bhd, a company that failed to deliver on an RM9 billion contract to build six OPVs.

The contract was awarded in 1998 and Boustead Holdings took over PSC in 2005. - Mkini