KUALA LUMPUR (Aug 4): Those involved in misconduct concerning the RM9 billion littoral combat ship (LCS) project will be brought to justice, said Senior Defence Minister Datuk Seri Hishammuddin Hussein.

"As far as weaknesses and irregularities [in the project] are concerned, I have always stressed that whoever is guilty remains guilty," he said in a statement on Thursday.

“The Malaysian Anti-Corruption Commission (MACC) investigation is still ongoing and this means that the parties involved in the irregularities in the project will not go unpunished.

"The Parliamentary Audit Committee (PAC) has recommended MACC to speed up the investigation and prosecution. Whoever is guilty will be brought to justice," he said.

The Minister's statement came after PAC released a report on the LCS project on Thursday.

The committee said not a single ship had been completed despite the Government spending RM6 billion on the project, which it had awarded to Boustead Naval Shipyard Sdn Bhd — a subsidiary of Boustead Holdings Bhd — through direct negotiations.

The Royal Malaysian Navy (Navy) should have received five of the ships by August.

The PAC also found that the Government had not done its due diligence on BNS' financial problems.

This was evidenced by the fact that the Government was required to make an advance payment of up to RM1.36 billion to BNS, contrary to a Treasury circular in effect at the time.

PAC also stated that BNS's financial situation was in a weak and critical state due to abuse of power and deficiencies in financial management.

The PAC also urged the MACC to take prosecutive action against those involved in the LCS scandal, after considering recommendation based on the findings made under several reports, namely PAC’s report, as well as the Special Committee on Governance Investigation, Government Procurement and Finance (JKSTUPKK) report, and the forensic audit report.

The report was compiled following nine proceedings conducted regarding this issue between November 18, 2020 and March 8 this year. This issue cropped up following findings made by the National Audit Department, which were reported in the 2019 Auditor-General’s Report (Compliance Auditing of Ministries and Departments), as well as contained in the JKSTUPKK report.

Witnesses summoned to the proceedings included Hishamuddin, former Defence Minister Datuk Seri Ahmad Zahid Hamidi, Ministry of Defence (Mindef) secretary-general Datuk Muez Abd Aziz, Royal Malaysian Navy (RMN)chief Tan Sri Mohd Reza Mohd Sany, former RMN chief Tan Sri Abdul Aziz Jaafar, Boustead Heavy Industries Corp Bhd CEO Sharifuddin Md Zaini Al-Manaf and Boustead Naval Shipyard Sdn Bhd chief operating officer Low Kok Chiang.

Hishamuddin said Mindef is also aware of the PAC's findings, adding that Mindef has been given full cooperation and has always been transparent while attending the proceedings and the investigation process carried out by PAC.

He added that Mindef and other project stakeholders will examine the report in detail and take into consideration all of the PAC's recommendations.

He added that the Cabinet had also agreed to the LCS project recovery plan in April, which allows a six-month mobilisation period to enable negotiations with OEMs and vendors so that the forward planning of the project's procurement can be finalised.

The Government has also established a Special Administration Committee led by the chief secretary of the Treasury, Finance Ministry and the chief secretary of Mindef.

"This committee is tasked with closely monitoring the mobilisation process during this six-month period and reporting its progress to the Cabinet."

Moving forward, he said, the most important thing now is to ensure that the LCS project can continue smoothly. “LCS is a much-needed asset for the security of national waters, in line with the 15 to 5 Fleet Transformation Program, and for the sake of the navy.”