KUALA LUMPUR: The Malaysian Anti-Corruption Commission (MACC) has raided the office of Suria Strategic Energy Resources Sdn Bhd (SSER), the company which awarded two pipeline projects worth RM9.4bil, said Finance Minister Lim Guan Eng.
“The Finance Ministry has taken control over SSER offices. All of its employees have been placed on ‘garden leave’ until further notice,” he said.
Lim added that former prime minister Datuk Seri Najib Tun Razak had deliberately avoided the principal questions on the RM9.4bil pipeline scandal in his recent statement on the matter.
The Finance Minister said Najib issued a statement last week (June 5), defending his administration’s award of two petrochemical and gas pipeline projects worth RM9.4bil to China Petroleum Pipeline Bureau (CPPB) by SSER.
“He deliberately did not focus on the principal questions surrounding the pipeline scandal," said Lim, but instead focused on alleged "benefits" to the country from signing the RM9.4bil contract.
Lim said Najib had also claimed that he and China’s Premier Li Keqiang “had witnessed the signing of the Memorandum of Understanding (MOU) for the pipeline projects" along with other projects while in Beijing on May 14, 2017.
Najib had also claimed that, as part of the two pipeline agreements, China had committed to importing goods worth US$2 trillion over the next five years from Malaysia, to invest up to US$150bil in Malaysia and offer 10,000 places for training and studies in various institutes in China, Lim said in a statement on Monday.
"(However) all officials asked have stated that these claims by Datuk Seri Najib are untrue,” stated Lim.
There was no mention of the various “commitments” made by China, as claimed by Najib in any of the Cabinet papers presented in 2016 and 2017, which approved the SSER projects, Lim said, unless there were certain hidden Cabinet papers or “red” Cabinet minutes that no one has access to except Najib himself.
Over the past few days, the ministry has sought the assistance of the Treasury officials and the Chief Secretary to the Government to determine the veracity of the former prime minister’s claims of big money "commitments" by China to Malaysia linked to the two pipeline agreements.
Lim said the ministry has also discovered that for some reason, the East Coast Rail Link (ECRL) projects and the SSER projects were always presented together in the same Cabinet paper by Datuk Seri Abdul Rahman Dahlan, the then Minister in the Prime Minister’s Department for Cabinet approval.
“This raises red flags, as the ECRL and the SSER projects are vastly different in nature and business, involving different companies, contractors and geography, even if they were financed by the same China Exim Bank.
“Najib has deliberately refused to respond to the principal question of this RM9.4bil scandal as to why payment of RM8.3bil which is equivalent to 88% of the project value were made even though only 13% of progressive work had been completed,” he said.
Lim also questioned why Najib permitted such disbursement to be made within the first year of a three-year contract.
Lim pointed out that 88% of the funds had been disbursed despite the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) projects recording only 14.5% and 11.4% progress completion respectively (as at the end of March 2018).
“Furthermore, the above completion rates have yet to be verified or audited.
"Worse, we have since discovered that SSER has failed to secure any rights from Petronas, as required by law, to lay the pipes for MPP, and has also failed to acquire the necessary land in Sabah to do the same for TSGP,” he said.
"Despite such shocking revelations, Najib still claims that all the necessary processes, procedures and laws had been complied with in relation to the signing of these two pipeline projects,” Lim added.
The MPP involves a 600km multi-product petroleum pipeline connecting Melaka and Port Dickson all the way north to Jitra, costing RM5.35bil.
As for the TSGP, it involves building a 662km gas pipeline from the Kimanis Gas Terminal on Sabah's west coast to Sandakan and Tawau on Sabah's east coast, costing RM4.06bil.
Lim said the Finance Ministry is providing updates on the actions taken thus far.
Apart from the MACC raid on the SSER office, Treasury officials have also removed the SSER president, Datuk Mohammed Azhar Osman Khairuddin, as a director of the company.
“We are in the process of appointing an Executive Committee (Exco) led by an accounting firm to operate the company and investigate the transactions made by SSER.
“The Pakatan Harapan Federal Government would like to assure Malaysians that all necessary measures shall be taken to uncover the truth.
"We will take any required action against any party responsible to protect taxpayers’ interests,” added Lim.