Najib dismisses $2.4 billion pipeline project scandal allegations, claiming they were ‘politically motivated’

Former prime minister Datuk Seri Najib Razak warned Finance Minister Lim Guan Eng about making “serious politically-motivated” public allegations involving state-owned companies.

Former premier Datuk Seri Najib Razak has dismissed allegations by Finance Minister Lim Guan Eng regarding a RM9.4 billion ($2.37 billion) gas pipeline project scandal.

In a Facebook post on Tuesday (Jun 5), Najib wrote: “To my recollection, I am confident that all necessary process procedures and laws have been complied with in the negotiation and execution of the two pipeline projects raised by Finance Minister Lim Guan Eng today.”

Lim said in an earlier statement that the Finance Ministry had discovered the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) projects and that Suria Strategic Energy Resources Sdn Bhd (SSER) was tasked with handling them, says a report by The Malay Mail.

SSER, according to Lim, was taken in by the Finance Ministry as a wholly-owned unit in 2016.

A separate report by The Star quoted Lim as saying that he was informed by Treasury officers that SSER is an offshoot of SRC International, a subsidiary of scandal-laden 1Malaysia Development Bhd (1MDB).

Both MPP and TSGP projects were awarded to China Petroleum Pipeline Bureau (CPPB) on Nov 1, 2016 and suspicions were raised when CPPB was paid RM8.25 billion – 88% of the total funding – when only 13% of the work was completed.

The anomaly was uncovered among the ministry’s so-called red files that could only be accessed exclusively by a few officials. The full extent of the 1MDB scandal was also contained within the files.

Najib raised that he and Chinese Premier Li Keqiang had witnessed the signing of the memorandum of understanding (MOU) for the pipeline projects along with other projects while he was in Beijing on May 14, 2017.

“The two pipeline projects which will be of much economic and energy security benefits to Malaysia were negotiated on a government-to-government basis with the People’s Republic of China,” he said.

He further noted that during the MOU signing event, China had committed to driving imports worth $2 trillion over the next five years from Malaysia, investing up to $150 billion in the country and offering 10,000 locations for training and studies in various institutes in China.

Najib said he welcomes open and transparent investigations into the matter but also warned Lim about making “serious politically motivated” public allegations involving state-owned companies.

He pointed out that such moves could have a “negative effect” on foreign relations and international trade.