MoF denies ordering seizure of CPP’s RM1b fund

pic by BERNAMA

THE seizure of more than RM1 billion of funds held by China Petroleum Pipeline Engineering Co Ltd (CPP) was not done under the command of the Ministry of Finance (MoF), nor by Finance Minister Lim Guan Eng (picture) himself.

Lim said his ministry has not instructed for any seizure, after Singapore’s Straits Times reported that Malaysia government had, early this month, instructed global banking giant HSBC Holdings plc to transfer the funds held in CPP’s account in Malaysia to Suria Strategic Energy Resources Sdn Bhd (SSER), a wholly owned unit of the MoF.

“I would just like to say that neither the (MoF), nor I issued any instructions for the seizure.

“So, if there are any instructions of seizure, you should refer to the enforcement agencies.

“That’s all I want to say,” he told reporters at the Parliament lobby yesterday.

The Straits Times report, which quoted sources, stated the seizure and transfer of funds as “an unprecedented move in Malaysian banking”.

CPP is the main contractor for the Multi-Product Pipeline, a 660km-long west coast pipeline from Jitra to Port Dickson costing RM5.35 billion, and Trans-Sabah Gas Pipeline, a 662km gas line connecting the Kimanis Gas Terminal to Sandakan and Tawau at a cost of RM4.06 billion.

The Straits Times cited sources confirming that the funds have been transferred out from CPP.

“CPP firmly abides by the laws of Malaysia and is perplexed by the unilateral transfer of monies without notifying CPP.

“Once we have further information, CPP will take the necessary and appropriate actions to protect its rights.

“We hope that our Malaysian counterparts can resolve this with us through amicable means,” the company stated in the Straits Times report.

Both contracts were awarded to CPP Bureau in November 2016, signed by former Treasury secretary general Tan Sri Dr Mohd Irwan Serigar Abdullah, who is also SSER chairman.

In June last year, Lim revealed that the government has paid RM8.3 billion for the two projects worth RM9.4 billion, despite only completing 13% of the work.

Subsequently, the projects’ engineering, procurement, construction and commissioning contracts, and other associated contracts have been terminated in August last year.

Together, all the contracts were valued at RM10.4 billion.