Rafizi: Phoney firm siphoned RM192m from LCS project 1MDB style

An internal investigation by Boustead Heavy Industries Corporation Bhd on the littoral combat ship (LCS) project had alleged that RM192 million was siphoned off.

This was revealed by PKR deputy president Rafizi Ramli today, who claimed to have sighted the investigation report. That report was not shared with the press.

According to Rafizi, the report found that LCS subcontractors had paid €43.69 million, equivalent to RM210 million, based on invoices from French firm Alizes Marine France.

However, the payments went to a Malta-incorporated phoney firm known as Alizes Marine Limited.

“Based on the Alizes Marine France’s financial returns to the French authorities, only €3.53 million (around RM18 million) was collected (during that period).

“This means RM192 million had been transferred to off-shore companies (and the funds) can no longer be traced,” alleged Rafizi.

Rafizi said that the scheme was similar to that of 1MDB, in which fake companies with names that were similar to legitimate companies were set up around the world to collect illicit funds.

“An invoice would be sent by one company but an instruction would be given to pay to an account registered by another company with a similar name,” he alleged.

The French connection

Central to this scheme, alleged Rafizi, was French defence firm DCNS, which now goes by the name Naval Group.

Rafizi claimed that the internal report had stated that Alizes Marine Limited was recommended as a spare parts supplier by DCNS, which is the firm behind the design of the LCS.

“DCNS used Alizes Marine as a front to benefit from the supply of spare parts on the arrangement made and carved in Malaysia,” read a portion of the internal report which was shared by Rafizi.

Rafizi said Malaysia has a bad history with DCNS because the firm is currently under investigation by French authorities over bribery allegations in connection to Malaysia’s procurement of two submarines in 2002.

Therefore, said Rafizi, it was only right for the public to demand an investigation on who was “protecting” DCNS in its role in the LCS project.

“Only (then prime minister) Najib Abdul Razak, (former defence minister) Ahmad Zahid Hamidi, and (current defence minister) Hishammuddin Hussein can answer this question,” said Rafizi.

According to the Public Accounts Committee’s (PAC) report, Zahid had on May 26, 2011, greenlit the navy’s request for Boustead Naval Shipyard Sdn Bhd to construct six LCS based on the Sigma design.

However, in less than two months, Zahid changed his mind and instead followed BNS’ recommendations to use the Gowind-class design owned by Naval Group.

This was despite repeated protests by the navy. - Mkini