Rafizi: Najib’s associate ‘gave away’ control of LCS subcontractor

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PKR deputy president Rafizi Ramli today claimed that an associate of former premier Najib Abdul Razak had effectively ceded the Armed Forces Pension Fund (LTAT)’s control over the littoral combat ship (LCS) project to a foreign company despite holding a majority stake.

However, former LTAT chief executive officer Lodin Wok Kamaruddin, as then Boustead Heavy Industries Corporation (BHIC) chairperson, said he failed to recall the board’s decision supposedly made in August 2010.

Rafizi said even though Contraves Advanced Devices Sdn Bhd (CAD) and Contraves Electrodynamics Sdn Bhd (CED) were associate companies of Lembaga Tabung Angkatan Tentera (LTAT), control over decisions was allegedly held by a foreign company – German defence contractor Rheinmetall Air Defence AG (RAD).

He said BHIC as LTAT’s subsidiary had approved the purchase of a 51 percent share in CAD on April 28, 2010, while the remaining 49 percent was owned by RAD.

“In the purchase agreement dated Aug 13, 2010, between BHIC (through its subsidiary) and RAD (through its subsidiary) for 51 percent stake in CAD, BHIC agreed that RAD has management control over CAD, despite BHIC holding a majority stake,” claimed Rafizi.

He further claimed the “illogical decision” was agreed to by Lodin.

“Due to the illogical decision, CAD is only owned by Boustead (and LTAT) on paper,” he said.

When contacted, Lodin said he could not recall the board’s decision made 12 years ago.

“I do not have the meeting minutes on hand (to check),” he told Malaysiakini.

At the same time, Lodin also questioned whether Rafizi, in making his allegations, had access to BHIC’s board meeting minutes.

“He must have gone back to the board meeting’s minutes. But how did he get access to the documents?” asked Lodin.

Responding to Rafizi’s initial allegations that he had colluded in a purported scheme to increase costs of the LCS project, Najib yesterday detailed the ownership of CAD and CED as LTAT’s associate company.

Rafizi, today, however, insisted that Najib must expose the individual involved in influencing BHIC’s decision to cede management control, including on appointment of CAD’s chief executive officer and chief financial officer.

“Aside from controlling CAD’s management, RAD’s representatives were also given the authority to sign cheques and approve spending without needing to refer to BHIC’s representatives in the company,” said Rafizi.

Meanwhile, Rafizi also claimed that RAD’s expertise was only to develop fire control systems – one component of the LCS – and not to handle the entire construction, including other parts such as the combat management system.

“Under whose influence and interference that RAD was brought in despite information available at the time showing that they did not have the full range of expertise to handle the project?” questioned Rafizi.

The PAC in 2019 found that the Defence Ministry and its company Boustead Naval Shipyard Sdn Bhd ignored the Royal Malaysian Navy in the procurement of the LCS.

This led to a cost overrun amounting to RM1.4 billion in the RM9 billion contract awarded in 2011. – Malaysiakini