THERE were plans from the start to hide irregularities in the littoral combat ship (LCS) project by way of complicated transactions, PKR deputy president Rafizi Ramli said.

He said the project could have been completed by Boustead Naval Shipyard Sdn Bhd (BNS), but instead, it had engaged two subcontractors Contraves Advanced Devices Sdn Bhd (CAD) and Contraves Electrodynamics Sdn Bhd (CED).

The LCS project started under the Najib Razak administration, when Umno president Ahmad Zahid Hamidi was defence minister.

“As expected, Najib was quick to reply that CAD and CED are linked to the Armed Forces Fund Board (LTAT).

“But he did not explain about the 200% commission issue that I raised, pretending that he was not involved in the scandal because the two subcontractors were linked to LTAT,” Rafizi said in a statement today.

According to Rafizi, Boustead Heavy Industries Corporation (BHIC) a subsidiary of LTAT approved a 51% share purchase in CAD on April 28, 2010, after a board meeting.

The remaining 49% was held by Rheinmetall Air Defence AG (RAD), a German defence contractor.

BHIC’s decision to purchase CAD however took place a year and a half before the government appointed BNS as the contractor for the six LCSs through a letter of appointment dated December 16, 2011.

“As a result of that ridiculous decision, CAD is only owned by BHIC and LTAT on paper. The CEO and CFO, the two most important management positions in CAD, were agreed to be appointed by RAD instead of BHIC and LTAT,” he said, adding that the current CEO of CAD is Gordon Hargreave, who represents RAD.

This decision to hand over control to the minutiae shareholder was also something that was agreed upon by chairman of the BHIC board of directors Lodin Wok Kamaruddin, who is the former CEO of LTAT and a close associate of Najib, Rafizi said.

“I want to know under whose authority BNS gave up control of CAD/CED, a company that is not run by Malaysians when BHIC was the majority shareholder.

“Under whose influence was RAD brought in when it does not have the expertise for the project?

“Most importantly, who is the ‘shark’ behind these individuals who seems to wield so much influence?” Rafizi asked.

Malaysia was rocked again recently with the longstanding LCS procurement back in the spotlight after the Public Accounts Committee (PAC) released its report on the project’s failures.

The report disclosed that it had held nine proceedings from November 18, 2020, with the latest one on March 8 this year, by calling several witnesses.

The PAC found that the contract was awarded to BNS via direct negotiations, with the government paying RM6.08 billion, but not a single LCS has been delivered.

According to the original schedule, five ships should already have been ready and handed over by this month. – August 11, 2022.