Perwaja sought RM70mil for spare parts, court told

KUALA LUMPUR: The management of Perwaja Group had to seek financial assistance of RM70mil from the Finance Ministry to buy spare parts and consumables for the “Beam and Section Mill” project in Gurun, Kedah, the Sessions Court heard. 

Former Perwaja Terengganu Sdn Bhd director Datuk Zubir Embong said the assistance was necessary as the US$196mil (RM745mil)allocated for the purpose had been utilised for other things. 

Zubir, 50, said: “Under the previous management, Perwaja spent money to train staff and contract employees of the privatised company, Nesaga Technologies Sdn Bhd, while the training was preventive in nature and 'predictive maintenance’ had not been implemented. As such, the money was needed.” 

Questioned by DPP Tun Majid Tun Hamzah, Zubir said the training referred to was for the Beam and Section Mill project.  

“As at Feb 14, 1996, no training was provided for Perwaja staff,” he said at the trial of former Perwaja Steel Sdn Bhd managing director Tan Sri Eric Chia Eng Hock who has been charged with criminal breach of trust. 

Chia, 72, who was also the former managing director of Perwaja Rolling Mill and Development Sdn Bhd, is alleged to have approved a payment of RM76.4mil into the account of Frilsham Enterprise Incorporated at American Express Bank Limited, Hong Kong, for technical assistance rendered by NKK Corporation of Japan for a “Beam and Section Mill Plant” project in Gurun when no payment should have been made.  

Alternatively, he is alleged to have dishonestly released the fund by signing an agreement with NKK Corporation and approving payment for the amount without approval from the board of directors or tender committee of Perwaja Rolling Mill Development Sdn Bhd. 

He is alleged to have committed the two offences at his office at Menara UBN, Jalan P. Ramlee, here between Nov 4, 1993 and Feb 22, 1994. 

Zubir said that at the 18th meeting of the Perwaja Rolling Mill and Development on Dec 18, 1995, the management had raised the matter on the utilisation of the US$196mil and the purpose specified.  

“As a result, the hot run for the Beam and Section Mill scheduled for Feb 1, 1996 and 'melt shop’ for the 'Steel Making’ project on Feb 15, 1996, had to be delayed,” he said. 

Zubir said due to the delay, Perwaja did not have the funds to buy spare parts estimated at RM40mil for the Beam and Section Mill in Gurun and RM39.3mil for spare parts for the 'melt shop’ in Kemaman. 

Asked if he was aware of the payment of RM76.4mil to NKK Corporation for the technical assistance agreement, the witness said: “Not aware.” 

However, he said he could still remember that the agreement had been mentioned by Chia but could not remember when it was mentioned. 

The trial continues today.– Bernama