Malaysian Finance Minister Lim Guan Eng says seizure of funds from China's CPP not by his ministry

Malaysian Finance Minister Lim Guan Eng told reporters that neither he nor his ministry had issued any instructions for the seizure.
Malaysian Finance Minister Lim Guan Eng told reporters that neither he nor his ministry had issued any instructions for the seizure.PHOTO: ST FILE

KUALA LUMPUR - Malaysia's Finance Minister Lim Guan Eng said on Monday (July 15) that his ministry did not issue any instructions to seize more than RM1 billion (S$330 million) in funds from state-owned China Petroleum Pipeline Engineering (CPP). His comments followed a report by The Straits Times over the weekend that cited sources as saying the government had ordered the seizure.

The report, published in the paper's Sunday edition, said the Pakatan Harapan (PH) government had early this month ordered that the funds be seized from a CPP account held with global banking giant HSBC in Malaysia and transferred to Suria Strategic Energy Resources, a company wholly owned by the Ministry of Finance.

"I would just like to say that neither the Finance Ministry nor I issued any instructions for the seizure," The Star newspaper quoted Mr Lim as telling reporters in Parliament's lobby on Monday.

"So, if there are any instructions of seizure, you should refer to the enforcement agencies. That's all I want to say," he added.

The report, citing lawyers and bankers familiar with the situation, said the moves came against the backdrop of an ongoing dispute involving two multibillion-dollar energy pipeline projects in which CPP was the lead contractor that were suspended last July.

The pipeline projects were awarded to CPP in November 2016 by the previous Barisan Nasional government of prime minister Najib Razak but they have been in limbo after the PH alliance took office following its victory at the May election last year.

The projects were a 600km multi-product pipeline along the west coast of peninsular Malaysia costing RM5.35 billion and a gas pipeline network in the East Malaysian state of Sabah costing RM4.06 billion.

 
 
 

CPP, in response to queries from The Sunday Times, confirmed that the funds were transferred out, while the HSBC corporate office in Kuala Lumpur declined to comment, citing client confidentiality.

"CPP firmly abides (by) the laws of Malaysia and is perplexed by the unilateral transfer of monies without notifying CPP," the company, a unit of China's state-owned oil and gas giant China National Petroleum Corp, told The Sunday Times.

CPP said it is speaking to the relevant parties in a bid to understand the basis of the transfer and would take appropriate actions to protect its rights once it has further information.

Bankers familiar with the situation said that certain bank accounts held by CPP, including the monies in HSBC, were frozen by the Malaysian government after the projects were suspended.

Malaysian press reports at the time alleged that the monies initially paid out by Suria Strategic Energy Resources were diverted to third-party Cayman Island companies linked to the scandal at 1Malaysia Development Berhad. But CPP has strenuously denied those allegations.