KUALA LUMPUR – Ocean Sunshine Bhd, which has taken over project management of the littoral combat ships’ (LCS) construction, is not a shell company and is fully owned by the Finance Ministry, said Defence Minister Datuk Seri Mohamad Hasan.
“The special purpose vehicle (SPV) is fully owned by the Finance Ministry, for the sake of taking control (of the project), so there are no more incidents like before,” he said in the Dewan Rakyat today, referring to the company.
“That’s why there is a clause in our supplementary agreement where the ministry can directly pay the original equipment manufacturer if there are any issues with the SPV.
“(Ocean Sunshine) is not under the ownership of anyone but the Malaysian government,” Mohamad said.
He was responding to a supplementary question by Datuk Seri Ikmal Hisham Abdul Aziz (Tanah Merah-PN), who enquired about Ocean Sunshine’s track record and merits.
Ikmal had expressed concern that the firm may be a shell company, and the ships would remain unfinished – resulting in history repeating itself.
The LCS project, worth RM9 billion, became controversial last year when multiple government and corporate reports outlined discrepancies behind the deal with then contractor Boustead Naval Shipyard Sdn Bhd (BNS) and other companies.
Earlier this month, Prime Minister Datuk Seri Anwar Ibrahim, who is also finance minister, said 10.38% of the Armed Forces Fund Board’s shares in BNS were transferred to Ocean Sunshine, aimed at completing the LCS project.
In August, Boustead Heavy Industries Corp Bhd sold 20.77% of its stake in BNS to the Finance Ministry for a nominal sum of RM1 after the government’s decision to take over the LCS project through Ocean Sunshine.
Mohamad today also said that the management of the LCS’ construction, which is monitored by the defence and treasury secretaries-general, is in line with recommendations made by Parliament’s Public Accounts Committee.
“Although the LCS’ construction is no longer under BNS, it is still managed by two secretaries-general – treasury and defence – and officials who will examine and follow the progress of its construction.”
“We will comply with what the PAC and auditor-general have instructed, so we will issue periodic reports to Parliament, the PAC and select committees.
“(This is) so that the construction of the LCS is monitored to avoid a repetition of what has happened,” he said when winding up the debate on Budget 2024 for his ministry. – October 31, 2023