Contractor in Malaysia's warship project allegedly misused funds, opposition says

The scandal revolves around a 2011 move by the Royal Malaysian Navy to build six small warships by awarding it to local ship builder Boustead Naval Shipyard. PHOTO: FOTOBERNAMA

KUALA LUMPUR - A contractor firm tasked with buying spare parts for a RM9 billion (S42.8 billion) Malaysian warship project had used part of the government funds to buy everyday items such cotton buds, mineral water, cleaning cloths and fans, an opposition leader claimed on Thursday (Aug 25).

Rafizi Ramli, deputy president of Parti Keadilan Rakyat (PKR) on Thursday (Aug 25) questioned how much of the RM210 million contract given to contractor Alizes Marine Limited was spent buying these items, though its main task in the littoral combat ship (LCS) project was to supply "spare parts" for the vessels.

"After obtaining a contract to supply spare parts from the LCS project, invoices with false addresses were sent and payment instructions diverted funds to different companies registered in Malta and Labuan," Rafizi claimed in a Facebook post on Thursday, as reported by Malaysiakini news site.

The revelation could embarrass the government further as Alizes Marine was allegedly controlled by Zainab Mohd Salleh, the second wife of a former deputy defence minister who is now a full Cabinet minister, Abdul Latiff Ahmad.

Rafizi said the minister should be fired from the Cabinet for his wife's role in the project.

The scandal revolves around a 2011 move by the Royal Malaysian Navy, which is under the Defence Ministry, to build six small warships by awarding it to local ship builder Boustead Naval Shipyard.

Alizes Marine is one of several contractors appointed to aid Boustead with the project.

The six vessels, to be used to patrol Malaysia's shoreline, were to have been delivered from 2019 onwards but none are ready today, Parliament was told on Aug 4, causing a public uproar.

Five of the ships should have been delivered by this month, with the sixth scheduled to be delivered next year, the bipartisan Public Accounts Committee (PAC), which reports to Parliament, said in its Aug 4 report.

The PAC further said that the first LCS that is still being built was only about 44 per cent complete today.

Rafizi said on Thursday that Alizes Marine was awarded the RM210 million contract to supply the spare parts for the project between 2011 and 2015.

He quoted from redacted parts of a forensic audit report on the LCS that was recently declassified by the government, that supposedly read: "Global purchase orders (PO) issued to Alizes Marine contained certain items which did not belong to depot level spare parts (repairs and maintenance).

"This signified the level of discrepancy and deception in the process of procurement."

Abdul Latiff had earlier denied that one "Zainab Mohd Salleh" that was widely discussed on social media was his wife.

But Rafizi pointed out that the evidence pointed to another Zainab Mohd Salleh that was indeed Abdul Latiff's wife, and that this woman was the controlling sharehlder of Marine Alizes.

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