KUALA LUMPUR: Tanjung Offshore Bhd’s former group adviser and managing director (MD) Datuk Harzani Azmi has been detained by the Malaysian Anti-Corruption Commission (MACC) as part of an investigation into the alleged fraudulent acquisition of Gas Generators (M) Sdn Bhd (Gastec) in 2013 for RM34.3 million.

Sources close to the investigation told The Edge Financial Daily that Harzani was one of four people summoned to the commission’s headquarters in Putrajaya at about 4pm yesterday to have their statements recorded.

It is understood that Harzani would be detained overnight and would be remanded today under Section 117 of the Criminal Procedure Code.

When contacted by The Edge Financial Daily, a MACC spokesman confirmed the arrest of Harzani, adding that MACC is expected to obtain a remand order on the former top executive today.

According to sources, the 48-year-old Harzani is being investigated under Section 17A of the MACC Act 2009 for allegedly accepting gratification. An offender is liable to imprisonment of up to 20 years, or a fine of up to five times the sum or value of the gratification.

A source said 14 people, including Tanjung Offshore directors and lawyers, have had their statements taken by MACC since January this year. “However, only Harzani has been arrested in relation to the case.”

Previous news reports revealed that Tanjung Offshore had purchased the remaining 49% stake in Gastec from Appolusa Sdn Bhd to enable the group to capitalise on the latter’s technology and market leadership, and capture new markets in the Asia-Pacific. It was alleged that Tanjung Offshore (valuation: 0.9; fundamental: 1.85) had paid more than the actual value of the deal.

Gastec designs and manufactures hydrogen, oxygen and nitrogen gas generators, and related process equipment for the oil and gas (O&G), petrochemical, mining and healthcare industries.

To recap, since January, Tanjung Offshore has been fraught with alleged misdealings and long-drawn-out boardroom exchanges, which prompted the board to establish an independent committee on Jan 8 to review its deals, which include a proposed reverse takeover by French Bourbon SA, that would have enabled Tanjung Offshore to return to the offshore services vessel industry, which was called off on Dec 29 last year.

On Jan 28, the committee found possible conflicts of interest and breaches of fiduciary duty by (now) Tanjung Offshore executive director Tan Sri Tan Kean Soon (who was a non-independent director then) and his predecessor Muhammad Sabri Ab Ghani. It also found deficiencies in the approval process where Harzani was concerned.

As a result, their executive andadvisery roles were suspended the same day, but Harzani was brought into Tanjung Offshore again as a group adviser while Tan, who has the largest stake in the company with 8% equity interest, became the executive director.

Harzani, who has about 25 years’ experience in the O&G industry, eventually resigned  in January this year along with several other directors who also sat on the independent committee.

Following the findings from the independent committee and a three-month long boardroom tussle, the Tanjung Offshore minority shareholders group, had urged the directors to resolve their issues.

Tanjung Offshore’s shares closed unchanged at 47 sen yesterday, with a market capitalisation of RM178.16 million.

This article first appeared in The Edge Financial Daily, on May 21, 2015.