Were Bank Negara and Affin Bank working in concert to hide the truth?
Bank Negara, however, discarded the normal tender procedures and there were allegations of impropriety and many complaints regarding the arbitrary approach that the central bank adopted. Bank Negara actually admitted that a different approach was adopted in deciding whom to award the tender to.
THE CORRIDORS OF POWER
Raja Petra Kamarudin
On 3rd July 2012, Bank Negara Malaysia made a public announcement that it is facing a contractual dispute with H & I Niaga Sdn Bhd, the contractor for the Bank Negara Malaysia Financial Services Resource Centre. H & I Niaga was suing Bank Negara for an amount of RM131.9 million.
On 4th July 2012, Affin Bank filed a petition to wind up H & I Niaga regarding a RM12.8 million debt, thus jamming the company’s suit against Bank Negara. H & I Niaga said that the alleged RM12.8 million debt was actually an amount being owed by its subcontractor.
H & I Niaga, in turn, still owed its 123 subcontractors and suppliers RM23.1 million due to the amount of RM81.9 million that it had spent on the job and which Bank Negara has not paid them yet.
This was an ongoing legal battle between H & I Niaga and Bank Negara, which the court had not yet decided who was at fault. But then one day later Affin Bank filed a petition to wind up H & I Niaga, which effectively disrupted the whole process and allowed Bank Negara to get off the hook.
Was Affin Bank and Bank Negara working in concert to sabotage the court case and protect the central bank from the embarrassment of its dirty linen being washed in public?
Anyway, this whole thing started during Prime Minister Tun Abdullah Ahmad Badawi’s watch. Bank Negara was going to build its Financial Services Resource Centre and an estimate of RM320 million was put for the project.
Eight companies then tendered for the project: Ahmad Zaki Sdn Bhd, Peremba Construction Sdn Bhd, United Engineers Malaysia Bhd, Punca Cergas Sdn Bhd, TSR Bina Sdn Bhd, Anjungan Emas Sdn Bhd, Pembinaan SPK Sdn Bhd and H & I Niaga Sdn Bhd.
Bank Negara, however, discarded the normal tender procedures and there were allegations of impropriety and many complaints regarding the arbitrary approach that the central bank adopted. Bank Negara actually admitted that a different approach was adopted in deciding whom to award the tender to.
During the technical evaluation, Ahmad Zaki Sdn Bhd was rated as the top bidder with Peremba Construction Sdn Bhd the runner up. H & I Niaga was rated the least capable and least qualified of the eight bidders.
An estimated cost of RM346 million was set for this project with a plus-minus 10% variation. United Engineers Malaysia Bhd and Punca Cergas Sdn Bhd tendered a price of RM305 million and RM315 million respectively and were rejected because this was considered too low.
H & I Niaga tendered a price of RM320.3 million and was the third highest bidder. Even though H & I Niaga ranked last in the technical evaluation, it was moved up the list to the top spot.
Ahmad Zaki Sdn Bhd and Peremba Construction Sdn Bhd — the number one and number two companies in the technical evaluation — tendered a price of RM332.9 million and RM344.6 million respectively. However, both were rejected because their bids were higher than H & I Niaga’s bid of RM320.3 million.
Pembinaan SPK Sdn Bhd was rejected because it relied too heavily on subcontractors.
The final three short-listed companies were TSR Bina Sdn Bhd, Anjungan Emas Sdn Bhd and H & I Niaga — who ranked third, fifth and eighth respectively in terms of technical evaluation.
Anjungan Emas Sdn Bhd was considered lacking in experience while TSR Bina was considered too small. So H & I Niaga, the number eight on the list, got the job.
And then all hell broke loose, as the news report and the press statement by Bank Negara below shows. The question here, though, is: why in the first place was H & I Niaga given the job when the technical evaluation placed them last on the list?
And the second question is: why did Affin Bank file a petition to wind up H & I Niaga and prevent the case between the company and Bank Negara from going to court where the truth would be revealed?
As for the third question as to whether there was any under-the-table money involved here I am not going to ask that question but I will leave it to you to ask if you want to.
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Contractual Dispute with H & I Niaga Sdn Bhd
Bank Negara Malaysia, 03 July 2012
This is with reference to recent reports on a legal matter concerning H & I Niaga Sdn Bhd, a former contractor for the Bank Negara Malaysia Financial Services Resource Centre.
The case is a contractual dispute between Bank Negara Malaysia and the aforementioned contractor over the termination of their service in the final stages of the completion of the building. H & I Niaga had initially referred the contractual dispute for arbitration but, on the first day of the hearing, H & I Niaga withdrew from the arbitration process.
Within Bank Negara Malaysia there is a robust governance process in place on all matters undertaken by the Bank. The Bank has also maintained detailed documentation on every stage of the construction of the building including records on the basis for the decisions made. In view that the relevant party has filed a suit in the court, Bank Negara Malaysia will take the necessary course of action accordingly.
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Insolvency puts Bumi firm H & I Niaga’s RM132m suit against BNM on hold
(The Malaysian Insider, 5 July 2012) – A Bumiputera builder’s RM131.9 million lawsuit against Bank Negara Malaysia (BNM) for wrongfully terminating a RM320 million construction contract and misrepresentation has been put on hold due to the winding up of the company.
In the lawsuit filed by H & I Niaga on June 20,the firm had claimed RM131.9 million in compensation.
But a court decision yesterday to allow Affin Bank to wind up the company for a debt of RM12.8 million has caused H & I’s case to be stayed.
“It is now up to the liquidator to decide whether to pursue further action against Bank Negara,” said DAP’s Tony Pua, who had helped highlight the company’s situation last Sunday.
The two former directors of the now wound-up H & I Niaga stressed the importance of a settlement with Bank Negara, saying today that the company still owed RM23.1 million to 123 subcontractors and suppliers.
They confirmed that Affin Bank had filed the winding-up application before the lawsuit against BNM was filed, but said that the RM12.8 million debt was actually owed by its subcontractor.
H & I Niaga had won a RM320 million contract in September 2005 to build the central bank a financial services resources centre, which had been scheduled for completion by August 2007.
Last Sunday, the firm’s then executive director Amerudin Ismail had claimed that it had incurred extra costs when the project was delayed due to the central bank’s indecision.
He claimed Bank Negara had twice verbally assured the firm it would pay compensation for the extra costs, once on May 16, 2009 and again on April 8, 2010, but had instead axed the contract 20 days later.
The company’s then managing director, Datuk Ismail Mohd Hashim had also last week told reporters that H & I had put in close to RM16 million of its own money into the project.
Amerudin claimed the company was threatened into signing a supplementary contract with BNM that was “very unfriendly, harsh and one-sided” or their services would be terminated.
He added that BNM had gone ahead to terminate the contract in the end, allegedly because H & I was late in meeting a deadline in building the facade.
“But those milestones are handled by our sub-contractor and it’s not our direct responsibility,” Amerudin said.
Datuk Ismail had also last week said that the company had got the contract by using its own capability, after reporters asked if H & I was affiliated to any political party.
H & I Niaga had filed a lawsuit against BNM, the bank’s governor Tan Sri Zeti, the bank’s then deputy governor Datuk Zamani Abd Ghani and its then assistant governor Datuk Mohd Nor Mashor.
The company had wanted BNM to compensate the firm RM81.9 million spent on the job and another RM50 million for damage to its reputation.
The company had sought the DAP’s help to highlight the case after exhausting all avenues – including bringing the case for arbitration, bringing up the matter with the Ministry of Finance and the Prime Minister’s Office.
