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KUALA LUMPUR – After alleging discrepancies in the awarding of two packages of the littoral combat ship (LCS) project to a local company, Rafizi Ramli today revealed how a foreign firm was given full control of the former despite only owning a minority share.
The PKR deputy president said Rheinmetall Air Defence AG (RAD), a German defence contractor fully owned by RD Investment AG, held 49% shares in Contraves Advanced Devices Sdn Bhd (CAD).
This was when Boustead Heavy Industries Corporation (BHIC), a subsidiary of the Armed Forces Fund Board (LTAT), had approved the purchase of a 51% share in CAD on April 28, 2010.
According to Rafizi, BHIC’s purchase of the majority share came just a year and a half before the government appointed Boustead Naval Shipyard Sdn Bhd (BNS) as the main contractor for the development of the six LCS in December 2011.
However, despite holding the majority share in CAD, Rafizi claimed that BHIC had given full control of the company to RAD, via a purchase agreement dated August 13, 2010.
“This was a senseless action. In any arrangement with two different shareholders, management control is held by the majority shareholder,” he said in a statement today.
“That is why I have said that based on evidence, it appears there was a structured plan from the beginning to ensure that misappropriation in the LCS project can be hidden through intricate transactions.”
Rafizi said as a result of this deal, CAD is only owned by Boustead and LTAT on paper, with key management positions in the company being appointed by RAD.
Separately, he alleged that RAD officials were also given the authority to sign off on cheques and grant expenditure approvals without first being required to be referred to BHIC representatives in CAD.
In a previous statement on Tuesday, Rafizi had revealed that two LCS packages worth RM1.185 billion were awarded to CAD by BNS in April 2012, with the contract being passed on to Contraves Electrodynamics Sdn Bhd (CED) as its subcontractor on the same day.
The PKR leader had also claimed that the RM1.185 billion cost charged to the government was supposedly only valued at RM397 million, about three times less.
Today, Rafizi said an internal investigation into the delays involving the LCS project similarly highlighted concerns on the power being granted to RAD’s officials on financial matters concerning CAD, despite RAD being the minority owner.
Additionally, he also questioned how RAD was given the responsibility to handle the two packages in full when the firm only specialises in fire control systems.
“On whose brave intervention was it that Boustead had to give up control of its subcontractor CAD and CED to a non-Malaysian company, when Boustead is the majority shareholder?
“On whose intervention was it that RAD was brought in, despite information at the time showing they lacked the expertise to handle the project?
“The biggest question is, who is the shark behind certain individuals who have such influence and power?” – The Vibes, August 11, 2022