THE Kuala Lumpur Sessions Court today slapped an RM18 million fine on a Finance Ministry subsidiary involved in questionable petrochemical and gas pipeline projects that came under the spotlight after the 14^th general election.

Suria Strategic Energy Resources Sdn Bhd (SSER), which handles projects worth RM9.4 billion, was fined for failing to comply with Bank Negara Malaysia conditions.

Among the offences were that SSER had issued loan funds from The Export-Import Bank of China not based on the progress of the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) projects and paid RM8.3 billion or 88% of the cost of construction of RM9.4 billion for the two projects to the contractor, China Petroleum Pipeline Engineering Co Ltd (CPP) when work progress was only at 13%.

Judge Manira Mohd Noor meted the sentence on SSER, which was represented by Kishan Narendra Jasani, after he pleaded guilty to six charges on behalf of the company as the accused. 

Manira said the offence committed by SSER could give negative impact to the country’s public and economic interests and the punishment was a lesson to SSER and other companies not to commit the same offences.

SSER was fined RM3 million for each charge for a total fine of RM18 million.

When asked by the judge what is his post in the company, Kishan Narendra said he was only representing the company.

According to the first to the third charge, SSER failed to comply with conditions in the written approval dated April 13, 2017, by BNM under Sub-section 214(2) of the Financial Services Act 2013 to acquire foreign currency loans from non-residents, for which SSER has issued loan funds from The Export-Import Bank of China not based on the progress of the MPP project.

SSER also failed to ensure good and effective governance in managing the implementation of the MPP project as well as the failure to obtain the written approval of BNM for the change of information relating to the timeline for the implementation of MPP project.

For the fourth to the sixth charges, SSER is accused of failing to comply with BNM conditions which was issuing loan funds from The Export-Import Bank of China not based on the project progress for the Trans-Sabah Gas Pipeline (TSGP) project and the failure to ensure good and effective governance in implementing TSGP project and the failure to obtain written approval from BNM for change of information relating to the implementation timeline of TSGP.

All the offences were carried on the 9th floor of Menara 1 Dutamas, Solaris Dutamas, No. 1, Jalan Dutamas 1, in Kuala Lumpur between April 2017 and May 2018 according to Subsection 214(9)  of the same act which provides for a maximum of 10 years in jail or fine of up to RM50 million or both.

Counsel Lawrence Tan Kim Kai appealed to the court for a minimum fine as it was the company’s first offence and the company is now managed by a new team.

BNM prosecution officer Nurdeenie Abdul Rashid pressed for a punishment commensurate with the seriousness of the offences, which led to a depreciation of the ringgit against other currencies.

MPP is a 600km conduit for various petrochemical products betwen Malacca, Port Dickson and Jitra,.

TSGP is a 662km line from Kimanis Gas Terminal to Sandakan and Tawau in Sabahat a cost of about RM4.04 billion.

On July 22, 2016, SSER received cabinet approval to implement the two projects worth RM9.4 billion and awarded them to the China Petroleum Pipeline Bureau (CPPB) on November 1, 2016.  

The TSGP and MPP were terminated by the government on September 6. – Bernama, April 5, 2019.