Lokman Noor Adam, a former director of communications at the finance ministry, said if there was any wrongdoing, it should be left to the relevant authorities to investigate first.
He was particularly unhappy with today’s allegations by Finance Minister Lim Guan Eng that a company with links to controversial businessman Low Taek Jho was paid RM8.3 billion, or 88% of the contract’s worth, despite completing only 13% of works to build two pipelines in Kedah and Sabah.
Lim had said the project, worth RM9.4 billion, was given to Suria Strategic Energy Sdn Bhd (SSER), a wholly-owned finance ministry subsidiary set up in 2016 specifically to undertake the Multi-Product Pipeline and Trans-Sabah Gas Pipeline.
Lim added: “I have been informed by Treasury officials that SSER is an offshoot by the same people behind SRC International, a former subsidiary of 1MDB. SRC is the acronym for Strategic Resources Corporation, a name that is similar to SSER.”
SSER’s CEO Mohammed Azhar Osman Khairuddin, Lim said, was also a director of Putrajaya Perdana Sdn Bhd, a company that Lim said was linked “directly with Low Taek Jho”, the businessman named by US authorities as responsible for the theft of billions of dollars from 1MDB.
Lokman said in a statement: “In his statement, he had made the very specific allegation that payments were made ahead of construction milestone to China Petroleum Pipeline Bureau (CPPB) – not to any other company.
“There was no allegation that such payments had been diverted or wrongly paid to other companies.”
He then urged Lim to provide more details to prove his allegations today that the two pipeline projects were “a scandal”.
Lokman said CPPB was one of the top pipeline builders in the world and had completed more than 10,000km of pipelines.
CPPB, he added, was a wholly-owned subsidiary of the China-government-owned China National Petroleum Corporation (CNPC), which was listed at number four in the 2017 Fortune 500 global companies with revenue of US$263 billion last year.
“Given their strength and track record, is Guan Eng alleging that the CPPB or CNPC may not complete the two projects on time after receiving these payments?
“It is not unusual for turnkey construction projects to have payment schedules different from construction milestones. This could be due to the government-to-government negotiations related to the soft loan given by the Chinese government. Perhaps the MoF can disclose the entire agreement for the public to examine why the payment milestones were structured this way.”
Saying Lim had also made references to two other consultancy contracts and a maintenance contract, Lokman called on Lim to disclose the names of these companies and whether they were also linked to the CPPB and CNPC.
On Lim linking SSER to SRC and 1MDB, Lokman said Lim had done so because the “SSER has a similar name to Strategic Resources Corporation Bhd (SRC) since it has the words ‘Strategic’ and ‘Resources’ in it. However, checks with SSM (Companies Commission of Malaysia) show that SSER is not a subsidiary of SRC Bhd but is 100% directly owned by Minister of Finance Incorporated with all 30,000,001 issued shares”.
Another reason for the link, he said, was that SSER CEO Azhar had previously been an independent non-executive director at Putrajaya Perdana Berhad.
“While it is true that Jho Low had reportedly bought the then listed Putrajaya Perdana Berhad and another listed company, Loh and Loh Berhad, in 2007 with Middle East backing before 1MDB existed, Azhar is a senior Petronas veteran and has served in various capacities since 1979, including as a director in Petronas Gas and Petronas Bhd.
“Therefore, he would have the necessary experience and expertise to undertake the job at SSER.
“Today’s allegation is particularly damaging as our MoF is essentially implying that the Chinese government has colluded with our government in carrying out corrupt practices.
“This can only be negative for our diplomatic and trading relations.”