KUALA LUMPUR, Aug 10 — Former defence minister Mohamad Sabu and his former deputy Liew Chin Tong today said that Minister of Defence Datuk Seri Hishammuddin Hussein needs to answer Dewan Negara regarding Boustead Naval Shipyard Sdn Bhd’s (BNS) financial situation in connection with the littoral combat ship (LCS) scandal.
In a joint statement, the pair asked three questions: the total of BNS’ debt as of August 2022; whether Hishammuddin agrees that the use of LCS funds to finance the debt of the New Generation Patrol Vessel (NGPV) is a crime; and whether BNS will be given an “order book” to guarantee the issuance of sukuk.
“Hishammuddin and the government must give transparent and clear evidence and guarantee that there has been no misappropriation of funds that will bring harm,” they said.
They also addressed former prime minister Datuk Seri Najib Razak’s allegations about the project’s slow progress after the Ministry of Defence under the Pakatan Harapan (PH) government “froze” the LCS project in September 2019, saying that the project had experienced financial issues prior to PH taking over.
Besides that, they asked if the LCS project was begun with the intention of “rolling” NGPV’s debts, referring to Armed Forces Pension Fund (LTAT) CEO Datuk Ahmad Nazim Abdul Rahman’s statement that part of the LCS fund was used to finance BNS’ debts for old projects, namely NGPV which began in 1998 and ended in 2010 with a “rescue fund” from the Malaysian government of RM 1.4 billion without any increase in equipment or scope of work.
“We wonder why in June 2021 BNS proposed a contract or order book value of RM53 billion from the government for the purpose of obtaining a loan through sukuk amounting to RM4 billion to restore the LCS project,” they said, calling the proposal unfair.
“PAC was informed in 2021 that the government only agreed to give an order book for three years. But even this is not a correct and safe action.
“Hishammuddin announced on April 20, 2022 that the LCS project would continue but no one, including PAC, was informed of the details and method of getting funds, nor the timetable,” they went on to say.
The pair said they welcomed the motion to debate the Public Accounts Committee (PAC) report regarding the LCS scandal in Dewan Negara that was submitted to Speaker of the National Assembly, Tan Sri Rais Yatim, yesterday by senators Lim Hui Ying, Fadhlina Sidek and Datuk A. Kesavadas Nair.
On Monday, they demanded the declassification of three documents as part of the solution for the LCS controversy.
Hishammuddin told the Dewan Negara on Monday that the first of six LCS purchased from BNS should be ready no later than two years from now.
Last week, he revealed that the Malaysian Anti-Corruption Commission (MACC) was investigating the matter.
Transparency International Malaysia (TI-M) criticised the scandal, saying that Malaysia is increasingly becoming known for its bad governance practices resulting in the loss of billions of ringgit of public funds.
The LCS project is the largest procurement in the history of the Defence Ministry with a total cost of RM9 billion.
The said contract began in 2013 with a 10-year time frame and six LCS ships were expected to be built and delivered to the country by the end of 2023.