Defence minister Ismail Sabri Yaakob said the decision was made at the Cabinet meeting on Wednesday.

He said the continuation of the project would save 1,600 Malaysians working on the project from losing their jobs and sustain more than 400 vendors comprising Bumiputera SMEs.

“If the construction of this LCS is not continued, it will have a negative impact on the workers and the Bumiputera vendors involved.

“It will also affect the Armed Forces Fund Board (LTAT) which is a shareholder in Boustead Holdings Berhad,” he said in a statement here tonight.

Apart from that, Ismail said if the project was not continued, it would indirectly affect the contributors to the board, who are military personnel.

He added that the bank that gave the loan to this project would also suffer losses because Boustead Naval Shipyard (BNS) could not afford to repay the loan.

It was previously reported that the defence ministry had conducted an in-depth investigation on the failure by BNS, a subsidiary of Boustead Holdings Berhad, to supply six littoral combat ships to the Royal Malaysian Navy.