MOF Malaysia claims Najib hid S$3.2b pipeline scandal in secret ‘red files’

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Malaysia’s Finance Ministry said it has discovered that the previous administration run by ex-PM Najib Razak was hiding some seriously scandalous projects in the Ministry of Finance (MOF) under as ‘Red Files‘.

These are believed to form part of the projects kept as “red files”, which Minister of Finance Mr Lim Guan Eng said were hidden away from the scrutiny of most Treasury officials during Najib’s tenure.

Datuk Seri Najib was also finance minister during his nine years at the helm.

The current government has pledged that the Prime Minister of the country will not hold the post of Finance Minister, nor any other portfolio other than the Prime Minister’s role.

Lim said he discovered dubious payments worth RM8.3 billion made in two pipeline projects but only 13% of these projects are completed.

The projects are worth RM9.4 billion.

The projects – one multi-product petroleum pipeline running from Melaka and Negeri Sembilan to Kedah, and a gas pipeline from Kimanis to Sandakan and Tawau – are all handled by a wholly owned subsidiary of the MOF.

The Suria Strategic Energy Resources (SSER) was set up on 19 May 2016 with the specific intent to undertake the Multi-Product Pipeline (MPP) and the Trans-Sabah Gas Pipeline (TSGP) projects. Both projects were approved by the Cabinet on 27 July 2016.

Both projects were approved by the Cabinet in July 2016, under the previous Barisan Nasional administration.

“I have instructed my officers to file a report with the Malaysian Anti-Corruption Commission..

“We have discovered that the payment schedules for the above contracts are based almost entirely on timeline milestones, and not on progressive work completion milestones. Worse, based on the agreements signed, 85 per cent of the project value would be paid by March 1, 2018,” Mr Lim said.

According to the statement, the projects were awarded to China Petroleum Pipeline Bureau (CPPB) in November 2016.

The 600km multi-product petroleum pipeline (MPP) connecting Melaka and Port Dickson in Negeri Sembilan to Jitra, Kedah, costs about RM5.35 billion. Meanwhile, the 662km Trans-Sabah gas pipeline (TSGP) from Kimanis Gas Terminal to Sandakan and Tawau costs about RM4.06 billion.

SSER secured 85 per cent of funding for both projects from China Exim Bank in March last year, while the remaining 15 per cent was to be raised by issuing sukuk, or Islamic bonds. Both the China Exim Bank borrowings and the sukuk are secured by federal government guarantees.

The Board of Directors, and Tan Sri Irwan Serigar in particular must answer as to why SSER signed such a lopsided contract that clearly jeopardises the interest of the Malaysian people and government.

In addition, we would welcome the former Finance and Prime Minister, Dato’ Seri Najib Razak, who has been active on Facebook recently, to explain how he could possibly approve the above transactions.

Najib fights back

Najib dismissed the accusations, saying the allegations were politically motivated.

In a Facebook post on Tuesday (Jun 5), Najib wrote: “To my recollection, I am confident that all necessary process procedures and laws have been complied with in the negotiation and execution of the two pipeline projects raised by Lim Guan Eng.”

Najib said that he and Chinese Premier Li Keqiang had witnessed the signing of the memorandum of understanding (MOU) for the pipeline projects along with other projects while he was in Beijing on May 14, 2017.

He also said the two projects will be beneficial to the public.