Proposal for royal commission to probe Malaysia’s warship deal presented to Cabinet: Defence minister

KUALA LUMPUR: The proposal on establishing a Royal Commission of Inquiry (RCI) to probe the littoral combatant ship (LCS) scandal has been presented to the Cabinet, said Malaysia's Senior Defence Minister Hishammuddin Hussein. 

"It is still in the process of discussion involving all parties, especially the ministers, but I cannot reveal what was discussed in the Cabinet meeting," he told reporters at Armed Forces Fund Board (LTAT) golden jubilee celebration on Wednesday (Aug 17). 

He said the matter might be discussed again in the next Cabinet meeting.

On Tuesday, the minister told the Upper House that it is his responsibility to bring up the matter to the Cabinet, although there are objections.

“I will bring this to the Cabinet and the Cabinet will then have to present this to the king,” the minister said when wrapping up the debate on the issue. 

The procurement of six LCS is the subject of a RM9.14 billion (US$2.05 billion) navy contract scandal, which saw current and former defence ministers denying responsibility.

The Malaysian parliament's Public Accounts Committee (PAC) said the project to construct six ships was awarded by the Ministry of Defence to Boustead Naval Shipyard Sdn Bhd (BNS) through direct negotiation, and the government has paid RM6.08 billion or 66.65 per cent of the cost so far.

Five LCSs should have been completed by August 2020 - the first was due in April 2019 - but none has been delivered. 

According to Boustead Heavy Industries Corporation Berhad, the LCS is a frigate-class vessel that can perform complex naval missions covering all four dimensions of modern warfare, namely anti-air warfare, anti-surface warfare, anti-submarine warfare and electronic warfare.

During her debate on Tuesday, Senator Lim Hui Ying said the PAC report brought up many issues on the scandal and suggested the establishment of an RCI to conduct a full investigation and find a solution.

“Only with the highest authority of this country, namely an independent and professional commission mandated by the king, can we get the truth and subsequently a solution to the LCS scandal,” she said.

An RCI is usually formed to look into matters of importance, with the king determining its terms of reference.

In the past, RCIs have been formed to look into issues of illegal immigrants in Sabah and forex losses by the country’s central bank in the early 1990s.

Mr Hishammuddin said in the Upper House that many steps and initiatives have been taken so that the project can continue, in line with a Cabinet decision in April this year.

The minister also said that those responsible for the ships’ delay or were involved in abuse of power must face justice.

“I am no exception. If any mistakes have been made and there are elements of corruption, bring me to court. 

“But while we are looking for those who are at fault, the project must continue. I will not look back again, we must move forward,” said Mr Hishammuddin, who was also the defence minister from 2014 to 2018. 

He added that Boustead Holdings Sdn Bhd must prove that it is able to complete the building of the ships, some of which he said are already 60 per cent complete.

BNS is a subsidiary of Boustead Holdings, a diversified business conglomerate whose largest shareholder is Lembaga Tabung Angkatan Tentera (LTAT) or the Armed Forces Fund Board.

On Tuesday, former BNS managing director Ahmad Ramli Mohd Nor pleaded not guilty to three charges of criminal breach of trust over the scandal.

The 78-year-old, who used to be Malaysia's navy chief, was alleged to have authorised payments totalling more than RM21 million to three companies without the approval of the BNS' board of directors.

Mr Hishamuddin said that while the public wanted politicians to be charged for the scandal, it did not mean that those brought to court were “small fry (ikan bilis)”. 

“The fact is there are no small fry when it comes to wrongdoing, especially when it comes to national security,” he said.  

Prime Minister Ismail Sabri Yaakob had last week promised that investigations into the issue will be carried out transparently and that the government will not protect anyone involved.

He also said that the government agreed to declassify a report on LCS prepared in 2019 by the Committee on Procurement, Governance and Finance under the Prime Minister’s Department as well as a forensic audit report.

The parliament’s PAC confirmed that it has received a copy of the report by the procurement committee on Wednesday.