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Boustead lodges report with MACC over irregularities in RM9 bil combat ship project

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The parent company of Boustead Naval Shipyard says findings of a forensic audit on littoral combat ship (LCS) project were submitted to anti-graft agency for further investigation.

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Free Malaysia Today
A littoral combat ship similar to the ones supposed to have been delivered by Boustead Naval Shipyard. (Bernama pic)

PETALING JAYA:
After months of questions raised by various quarters and calls for investigations into the non-delivery of six littoral combat ships (LCS) from Boustead Naval Shipyard Sdn Bhd (BNS), its parent company Boustead Heavy Industries Corporation Bhd (BHIC) has lodged a report with the Malaysian Anti-Corruption Commission (MACC).

In a statement yesterday, BHIC said it wants the MACC to probe possible irregularities in the RM9 billion littoral combat ship (LCS) project.

According to BHIC, the findings of a forensic audit, which was commissioned in February 2020, were handed over to the MACC in September.

“This stands testimony to the BHIC’s group commitment in fighting corruption and bribery at all levels of the organisation and in all its business dealings.

“This is in line with its core corporate values of belonging, honour, integrity and commitment,” BHIC chairman Ramlan Mohamed Ali, who is also a retired navy chief, said.

He added that BHIC will cooperate with the MACC and other authorities in any probe conducted on the LCS project.

“We have had several discussions with the MACC following the submission of the forensic audit report,” Ramlan said.

It was previously reported that the project, worth more than RM9 billion, was awarded in 2014 and the order was for six LCSs to be constructed.

The first ship should have been delivered in April 2019, but not one ship has been built although the government had already paid the company RM6 billion.

Former deputy defence minister Liew Chin Tong told the Dewan Negara in September that Putrajaya’s special investigation committee on procurement, governance and finance, had discovered that RM1 billion of the RM5.94 billion paid for the warships could not be traced.

He called for a probe into the missing funds especially with the partial payment having been made for the LCS project despite the project not having been completed.

Last month, National Patriots Association (Patriot) president Mohamed Arshad Raji also raised the issue criticising the Armed Forces Fund Board (LTAT) and Boustead Holdings (Boustead) over its silence on the issue.

“When there was consistent bad press towards Boustead subsidiaries and the contractor, Boustead Naval Shipyard, regarding the non-delivery of the six littoral combat ships (LCS), the management of LTAT and Boustead remained silent.

“This missing RM1 billion might not have gone into the BNS account and the funds appear to have been diverted,” Arshad said, urging the defence ministry and defence minister to quickly provide answers on the issue.

He added that the management of LTAT and Boustead must not cover up any crime committed if the RM1 billion was illegally misappropriated.

In August, Defence Minister Ismail Sabri Yaakob said the ministry was considering three options to resolve the delay in the delivery of six LCS units, as Boustead Naval Shipyard Sdn Bhd (BNS) had completed none of the orders.

These options were for the appointment of Naval Group France as a rescue contractor to complete at least two LCS units; the completion of at least two units by BNS with the remaining contract ceiling; or the termination of the contract with BNS.

Liew raised questions about this proposal as the navy would only be getting two ships out of the six ordered despite paying two-thirds of the RM9 billion ceiling cost.

BNS is majority-owned by Boustead, which has a 68.84% stake. BHIC owns a 20.8% stake in BNS through its direct subsidiary Perstim Industries Sdn Bhd. The remainder is owned by LTAT, while the finance ministry holds one share.

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