Rafizi: Who is the ‘big shark’ in the LCS scandal?

(MMO) – PKR deputy president Rafizi Ramli today alleged that there were plans from the beginning to hide irregularities in the littoral combat ship (LCS) project for Malaysia’s navy through various complicated transactions.

He said the plan included the engagement of two subcontractors — Contraves Advanced Devices Sdn Bhd (CAD) and Contraves Electrodynamics Sdn Bhd (CED) — when Boustead Naval Shipyard Sdn Bhd (BNS) could have handled the project on its own.

“As expected, Datuk Seri Najib Razak quickly replied that subcontractors CAD and CED are Armed Forces Pension Fund’s (LTAT) associated companies.

“He did not answer the 200 per cent commission issue that I raised. But only pretending that he was not involved in this scandal because CAD and CED subcontractors are LTAT’s associated companies,” Rafizi said in a statement, commenting on Najib’s earlier response to accusations he was involved in the high-profile scandal.

Rafizi explained that LTAT, a subsidiary of Boustead Heavy Industries Corporation (BHIC), approved the purchase of a 51 per cent stake in CAD, with the other 49 per cent going to Rheinmetall Air Defense AG (RAD), a German defence contractor company held through subsidiaries wholly owned company RD Investment AG.

He said that the decision was made during a BHIC board meeting on April 28, 2020 — a year-and-a-half before the Malaysian government appointed BNS as the contractor of the six LCS warships through a letter of appointment dated December 16, 2011.

He added that the purchase agreement between CAD and BHIC agreed that RAD has management control over CAD despite the fact that it is owned in majority by BHIC.

“As a result of that ridiculous decision, CAD is only owned by Boustead and LTAT on paper. The CEO and CFO, the two most important management positions in CAD, were agreed to be appointed by RAD instead of Boustead and LTAT,” he said, adding that the current CEO of CAD is one Gordon Hargreave who represents RAD.

He said that the decision to give management control to the smaller shareholder was approved by chairman of the BHIC board of directors Tan Sri Lodin Wok Kamaruddin, who is the former CEO of LTAT.

He added that representatives of RAD are authorised to sign checks and approve expenses without referring to BHIC representatives.

“BHIC reasoned that RAD should be brought in to get their expertise and enable technology transfer in making this LCS project a success.

“A general review can show that RAD’s real expertise is in developing ‘fire control systems’ rather than in handling the entire project involving other components such as ‘combat management system’,” Rafizi said.

He also cited an internal report stating that former commander of the Royal Malaysian Navy, Admiral Tan Sri Datuk Sri Abdul Aziz Jaafar, raised concerns over the LCS project’s dependence on the two subcontractors.

“The biggest question: who is the big shark behind certain individuals who have such influence and power?” Rafizi asked.