Advertisement

Putrajaya awarded RM100 million to company rejected by banks, says PKR

Zuhdi khianat Pakatan, kata PKR

PKR today questioned how Putrajaya awarded a RM100 million research and development grant to a company, which had been refused financing by banks.

PKR's strategy director Rafizi Ramli said the failure of the company, NSE Resources Corporation (NSERC) Malaysia Sdn Bhd, to get commercial funding for a gasifier steam boiler plant in Kerteh, Terengganu, raises doubts about the viability of the project as well as the government’s decision-making process.

“In fact this is worse than a bailout because it's free money,” Rafizi told reporters as he questioned the use of the Science, Technology and Innovation Ministry's (Mosti) RM1.152 billion R&D fund.

Rafizi said if the project was commercially viable with the right profit margin, any bank would have given its backing.

"The fact that the owner of this company clearly stated that his project did not get the support of financial institutions is already a red flag.

“It was already saying that the project is not going to generate the right income, and whatever (funds) you plunge into this project would be difficult to recover,” the Pandan MP said.

Yesterday Rafizi had alleged that Prime Minister Datuk Seri Najib Razak had lent his support to NSERC's application for a grant.

In its letter to Najib, NSE said it was the parent company of NSE Energy Sdn Bhd, NSE Polymer Sdn Bhd and Global Technology Sdn Bhd.

The group had expanded its business scope to the renewable energy industry led by NSE Energy, which also held five intellectual property rights registered with MyIPO.

NSE Energy had also been awarded pioneer status by the Malaysian Industries Development Authority.

The company claimed that it had signed a memorandum of understanding with a South Korean conglomerate (CJ Cheiljedang Corporation) and a French public listed company (Arkema S.A.).

The MoU was to jointly build the world's first bio-methionine plant in Malaysia worth RM2 billion.

The plant is scheduled to be built at the Kerteh Biopolymer Park in Terengganu and will create 500 jobs.

NSE Energy also said it was planning to supply renewable energy in Gebeng, Pahang and this project would create 400 jobs.

However, due to difficulties in obtaining financial assistance from banks, NSERC applied for a grant from Mosti to ensure it had sufficient cash flow.

The application letter was signed by NSERC managing director Azhar Anuar.

On the first page of the letter, Najib had allegedly scribbled a note for Mosti Minister Datuk Dr Ewon Ebin and there was also the premier's rubberstamp.

Rafizi claimed that after studying NSERC's letter, there was no doubt that Najib had given personal instructions via minutes in order to have the RM100 million grant considered by Mosti.

"The project managed by NSERC is for the purpose of supplying steam to a factory which is being built in Kerteh."

"The contract to supply steam at RM55 per tonne is a private contract involving NSERC and other private factory owners."

"Therefore, if it does not involve any government-linked companies, all profits will be owned by NSERC," Rafizi said.

He said the seventh paragraph in the letter from NSERC clearly showed that the commercial project had not obtained the backing from any financial institutions or banks.

"Should this point not raise any concerns with Najib or Putrajaya as this commercial project failed the financial vetting carried out by financial institutions?

"There is a high probability that the company's cash flow or financial status is unhealthy," Rafizi said.

"Therefore, there is a high risk probability that the returns from this project might be insufficient to repay any financial assistance which is injected into the venture."

Rafizi said that Najib should be more careful and cautious instead of recklessly venturing into projects which involved public funds of RM100 million.

"Moreover, the Mosti grants are supposed to be used for research and development, not commercial projects," Rafizi added.

Rafizi also stressed that he believed the commercial project did not meet the requirements for a grant or such a big injection of public funds.

"I am sure that the RM100 million grant did not undergo the technological vetting process by Mosti-appointed R&D specialists."

Rafizi said Najib could not continue running away from such daylight embezzlement issues and participate in anti-graft runs.

"Najib should come forward and give the rakyat an explanation," Rafizi said, warning he still had other documents which he had yet to make public. – April 22, 2014.