Bought and paid for, all of RM300 million, but where are the 6 helicopters?

13 June 2019

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The Defence Ministry today lodged a report with the Malaysian Anti-Corruption Commission (MACC) over the purchase of six helicopters worth more than RM300 million in 2015, which has yet to be received by the Malaysian Armed Forces to date

The report was filed by the ministry’s representative at the MACC Headquarters.

According to the ministry’s source, the McDonnell Douglas MD530G lightweight combat helicopters (above) were supposed to be received in two phases, namely two in July 2017, and the rest in December 2018.

The source said the terms of the purchase agreement did not safeguard the interests of the government, which included clauses such as “the contract is valid for two years, or, until the local company appointed as the agent successfully delivers the helicopters.”

According to the source, the approval for the purchase of the military assets in November 2015 was not done according to set procedures.

“The contract was done via direct negotiation with the agency, while many terms of the contract were not favourable to the government, for example, the contract was approved without any military specifications, a mandatory requirement in the purchase of military assets,” the source said.

He said McDonnell Douglas had cancelled the local company’s contract as its agent in Malaysia, by the time the helicopter purchase agreement was signed.

The source added the Malaysian government had paid RM112.65 million, which was 35 percent of the total cost of the acquisition, to the company.

– Bernama

https://www.malaysiakini.com/news/479522

21 May 2019

PETALING JAYA: Former defence minister Hishammuddin Hussein says he has nothing to hide if the authorities want to question him over the purchase of military assets during his tenure, following revelations that six US-made helicopters were never delivered despite a deal to acquire them for RM300 million.

Hishammuddin told FMT that the matter should be investigated by the Malaysian Anti-Corruption Commission (MACC).

“I have nothing to hide,” the Sembrong MP added.

He was responding to FMT’s report yesterday on a deal by the previous administration to buy six MD530G light scout helicopters manufactured by MD Helicopters of the US.

Let MACC investigate, says Hishammuddin on heli purchase

20 May 2019

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A contract was signed in November 2016, in which the helicopters were to be delivered in two batches with the second batch scheduled to arrive by last year.

As per the contract, Company A was paid 35% of the contract value, amounting to some RM113 million.

RM300 million for US-made helicopters, bought through dubious firm and never delivered

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RM300 million for US-made helicopters, bought through dubious firm and never delivered

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KUALA LUMPUR: Military helicopters bought during the previous administration for over RM300 million have yet to be delivered to the Royal Malaysian Army, a source close to investigations into allegations of corruption and mismanagement in the purchase of defence assets told FMT.

It is understood that six MD530G light scout attack helicopters, manufactured by MD Helicopters of US aerospace giant McDonnell Douglas, were ordered in 2016 by the defence ministry (Mindef) then headed by Hishammuddin Hussein.

The helicopters, better known as “Little Birds”, had reportedly impressed Mindef officials during a demonstration at the 2015 Langkawi International Maritime and Aerospace (Lima) exhibition.

But an investigation into the deal has revealed more startling details, including the fact that the Malaysian army never took delivery of the helicopters.

“It was found that the helicopter which performed at Lima 2015 wasn’t really an MD530G but another variant, the N369FF,” the source told FMT.
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FMT now understands that after Lima 2015, a local company with strong ties to “a very senior” Mindef official (“Company A”), which was the appointed agent in Malaysia for MD Helicopters, had made a proposal to Mindef to acquire the six MD530G.

The proposal was then submitted to former prime minister and finance minister Najib Razak for approval.

It is understood that the finance ministry gave the green light for the acquisition from Company A through direct negotiations.

It is also learnt that the Economic Planning Unit exempted the deal from undergoing value management checks.

A contract was signed in November 2016, in which the helicopters were to be delivered in two batches with the second batch scheduled to arrive by last year.

As per the contract, Company A was paid 35% of the contract value, amounting to some RM113 million.

“The main issue is that no real due diligence was done with the government,” said the source, adding that the approval was given just about four months after submission of the proposal.
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There were also concerns among the top brass of the Malaysian Air Force about the ability of the MD530G.

“One complaint was that it did not have a combat-proven record,” a retired air force official told FMT.
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In 2015, Company A sent a proposal to Hishammuddin worth US$60 million.

“Just three months later, it submitted another proposal, this time over US$70 million,” the source told FMT.

“In just three months, the price inexplicably went up by over 20%.”

A separate investigation into Company A found that it was financially weak before the deal was struck, having suffered losses in 2015 and 2016.

The deal is also believed to have been the first contract for the company, which had no experience in implementing a multi-million ringgit agreement.

“It only owned computers, furniture and office supplies valued at under RM50,000. Mindef could have gone directly to MD Helicopters and saved millions in taxpayers’ money.”

FMT is contacting Hishammuddin for a response.

RM300 million for US-made helicopters, bought through dubious firm and never delivered

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