Press Statement: EXPLOSIVE EXPOSE: MOH’S RM30 MILLION PROCUREMENT SCANDAL

PRESS STATEMENT DATED 11 MAY 2020

HEALTH MINISTER ADHAM BABA MUST COME CLEAN ON MOH’S RM30 MILLION PROCUREMENT SCANDAL

The Center to Combat Corruption & Cronyism (C4 Center) is deeply disturbed by news articles reporting that several companies directly appointed by the Ministry of Health (MOH) to supply Covid-19 related testing equipment are currently mired in controversy and are being probed by the Malaysian Anti-Corruption Commission (MACC).

 Overview

It was reported on May 5 that at least five contractors have been summoned by MACC in order to facilitate the investigation involving contracts believed to be worth at least RM30 million. The contracts involve the purchase of Covid-19 test kits, personal protective equipment and face masks.

The investigation of this possible shady deal came after former Member of Parliament Wee Choo Kiong claimed that a company which received the contract had been paid “lots of money upfront” and was not qualified.

Although MACC has declined to specifically identify the companies that are under its scrutiny in the investigations, it is rumoured to include a property development company Khazanah Jaya Sdn Bhd (KJSB) which had allegedly acquired a laboratory construction project for the ministry.

Without providing context, the Health Minister Datuk Seri Dr. Adham Baba had issued a press statement on May 4, saying the ministry is constantly monitoring and ensuring its personnel practised a high level of integrity.

Critical Findings as Uncovered by C4 Center

A search on the Companies Commission of Malaysia (SSM) website shows that the shareholders and directors of KJSB are Tan Boon Keong and Tan Jiat Jui. They are also shareholders and directors of South Asia Noble Sdn Bhd (SAN). It is interesting to note that one of the former director of SAN is Iskandar Miza Ahmad, who happens to be a shareholder and director in Adham Baba’s private clinic, Klinik Adham.

Klinik Adham is mostly owned by Adham Baba (96.8%) while Iskandar Miza who has been a director since April 2004 owns approximately 1,000 shares.

The link between the directors and/or shareholders and companies involved is shown below:-

Source: SSM 

  

These shocking findings raises the following questions:-

  1. Did Adham Baba assert control or influence over the affairs related to the Ministry he is in charge of, in particular, the selection of contractors?

  2. Did Adham Baba abuse his position by making decisions in ways that will provide personal benefit and favouritism for his business associates?

 

Demands

Public procurement is one of the government areas most vulnerable to corruption and other illegal activities. The National Anti Corruption Plan (NACP) has recorded that the largest chunk of corruption complaints amounting to 42.8% is derived from the procurement sector.

Despite existing procurement procedures, various circulars and directives, numerous projects were awarded through direct negotiations and selective tenders in the past, partly due to political interference.

Given the importance that transparency and accountability must not be lost in the haste to respond to a pandemic as deadly as the Covid-19, C4 demands Minister Adham Baba to provide a full explanation in the name of public interest on the procurement contracts as well as the appointment of contractors. 

As this unprecedented crisis puts healthcare systems, people’s safety and the economy under tremendous strain, it is imperative that transparency and accountability remain at the heart of the country’s policy responses.

 

Released by:

Center to Combat Corruption & Cronyism (C4 Center)

For further enquiries, please contact 012-379 2189 / 017-361 6473

 

References:

  1. https://www.malaysiakini.com/news/524158

  2. https://focusmalaysia.my/mainstream/macc-mum-over-property-firm-in-rm30-mil-covid-19-contract-scandal/

  3. SSM searches