Malaysia’s seizure of Chinese pipeline firm’s assets not a slight on Beijing, says finance minister Lim Guan Eng
- Lim told parliament the sequestration of US$240 million from a bank account of China Petroleum Pipeline Engineering was ‘company specific’
- Prime Minister Mahathir Mohamad confirmed the seizure on Monday, saying Kuala Lumpur was only taking back money for work that had not been done
Mahathir cancelled the two pipelines, worth some US$2.3 billion, last year after it was revealed that 80 per cent of China-Exim Bank loans undertaken by the previous administration had been disbursed even though only 13 per cent of the development was completed.
Answering questions in parliament on Wednesday, Lim said the asset seizure was “conducted against a company, and not its country [of origin]”.
According to local media reports, Lim told parliament that talks are continuing for the government to recover money “overpaid” for cancelled projects.
CPP won the contracts in November 2016 – during the Najib era – to build the 600km petroleum pipeline along the west coast of Malaysia and the 662km Trans-Sabah Pipeline in the Bornean state of Sabah.
The firm has strongly denied media reports claiming that funds paid for the pipelines were diverted to third-party Cayman Islands companies involved in money laundering.
Geng Shuang, the Chinese foreign ministry spokesman, said the pipeline works were being “carried out in accordance with the contract” before they were terminated by Malaysia last year.
He stressed that the two countries enjoy a “long-term friendly cooperative relationship” and that Beijing is confident of working with Malaysia to further deepen economic and trade ties.
Malaysia has sought to recalibrate ties with Beijing after last year’s election.