LCS fiasco: Mat Sabu and Chin Tong claim senior execs formed companies to pursue vested interests

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Former defence minister Mohamad Sabu and his former deputy Liew Chin Tong today released excerpts from a yet-to-be declassified forensic audit report on the Littoral Combat Ship (LCS) scandal ordered by the Pakatan Harapan (PH) administration in 2019.

In a joint statement, the duo also lambasted the delay in declassifying the PH ordered forensic audit, and shared several excerpts from the Proceeding Report (Hansard) of the Public Account Committee (PAC) dated March 8, which they claim provides details of the audit results.

They highlighted that this misconduct was only uncovered after the PH government’s order to look into the matter.

“The Government Governance, Procurement and Finance Investigation Committee (JKSTUPKK) report was declassified yesterday but the forensic audit report and the former admiral of the Navy Tan Sri Ahmad Ramli Mohd Nor’s letter of reprimand have not yet been declassified.


“Forensic auditing of Boustead Naval Shipyard Sdn Bhd (BNS) began in 2019 as directed by the PH administration and the report was completed in July 2020, after the collapse of the PH government. For unknown reasons, the management of Boustead Heavy Industries Corporation Berhad (BHIC) chose to conduct forensic audits for the years 2010 to 2014 only. “However, the findings of this forensic audit are also shocking,” they said.

They said that the review and analysis of the documents and transaction history showed irregularities, fraud and mismanagement, and also involved senior officers who only followed orders without raising red flags in the procurement.

The former ministers said that on Page 27 of the PAC proceedings report, Prabhat Kumar, the executive director of Alliance Investigative and Forensic Accounting, testified to the PAC that those involved had no intention to deliver the LCS project, but only had intentions to maximise their own gains.

“The terms and conditions of the joint venture between BHIC and Rheinmetall Air Defence AG (RAD) (both through subsidiaries) to establish Contraves Advanced Devices Sdn Bhd (CAD) are biased and in favour of RAD and to the detriment of BHIC’s interests.

“RAD has absolute authority in the management of CAD. This decision also makes it difficult to access the information necessary to understand the details of CAD’s business operations and conduct internal audits.

“There is a hidden interest and hand in the company’s operations where CAD is used as a vehicle to carry out projects issued by BNS,” they said.

They also pointed out that Ahmad Ramli — who was the BHIC managing director at that time — and Anuar Murad as the director of the LCS programmes were the ones who issued Letters of Agreements and Variation Orders without getting the views of the technical and commercial teams, as well as the LSC steering committee.

“They act like the only two of them in the organisation. On page 22, En Prabhat Kumar says that ‘It is clear that in the case of the LCS programme, Anuar bin Murad sidestepped the authority of all of his subordinates, and acted in a manner as if they were only two persons in the whole organisation’.”

“It is an outright conflict of interest whereby Tan Sri Ramli is the chairman of the LCS Steering Committee and CAD, and at the same time also the Managing Director of BHIC,” they said. – MMO