PUTRAJAYA:

Prime Minister Dr Mahathir Mohamad today said the government was entitled to order the transfer of over RM1 billion from the Malaysian bank account of a Chinese state-owned company to that of a company owned by the finance ministry.

“What happened is that there was a proposal to build this pipeline. I understand that the money for 80% of (work for) the pipeline was paid but the work completed was only 13%.

“So the government is entitled to get back the money.

“Since the project was cancelled, we want to get back the money for the parts that have not been implemented,” the PPBM chairman told a press conference after a party supreme council meeting at the Perdana Leadership Foundation here.

It was reported that global banking giant HSBC was told on government orders to transfer US$243.25 million held in the Malaysian account of China Petroleum Pipeline (CPP) Engineering Ltd to Suria Strategic Resources Sdn Bhd, which is wholly owned by the finance ministry.

Mahathir confirmed that this was from their account.

Asked under what provision of the law the transfer was carried out, he said: “They entered into a contract to build this pipeline. This is a contract from the government.

“They took from the government 80% of the contract price but delivered only 13%. So for the part that they have not delivered, the government is claiming back the money.”

Asked who authorised the transfer, Mahathir noted that Finance Minister Lim Guan Eng had said earlier today he did not and that the prime minister was responsible.

“I’m responsible for the principle that when a contract is given and the contractor does not use the money given for constructing the whole project (and) the rest of the project is not constructed, then the government is entitled to get back the money.”

CCP Engineering is the main contractor for the 660km peninsular west coast pipeline, costing RM5.35 billion, and the Sabah gas pipeline costing RM4.06 billion.

Both projects have since been suspended by the Pakatan Harapan government.

Mahathir denied that the order to transfer the money would upset the Chinese government, saying Putrajaya was not taking back money for work done, only for work not done.

The Singapore Straits Times had first reported the seizure and transfer of funds, describing it as “an unprecedented move in Malaysian banking”.

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We’re entitled to do it, Dr M says on RM1 bil bank transfer

The prime minister says the government is entitled to take the money back as China Petroleum Pipeline (CPP) Engineering Ltd was paid 80% of the contract value whereas only 13% of work was done.