Malaysia’s Mahathir Mohamad confirms US$240 million seizure from state-linked Chinese firm

The prime minister confirmed that the funds had been seized from state-linked China Petroleum Pipeline Engineering

He said his government was ‘entitled’ to the money, as it had been paid out for work on a project that had not been completed

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Malaysian Prime Minister Mahathir Mohamad speaks to reporters in Beijing last year. Photo: AP

Published: 8:48pm, 15 Jul 2019Updated: 12:51pm, 16 Jul 2019

Malaysian Prime Minister Mahathir Mohamad confirmed on Monday his government’s seizure of US$240 million from a state-linked Chinese firm appointed to build two now-stalled pipelines worth more than US$2.3 billion, saying the government was “entitled to get back the money” as the project had been cancelled.

“I don’t see why the Chinese would be unhappy about it, we are not taking back money for work they have done, only work they have not done,” Mahathir told reporters, adding that before its suspension, funds for more than 80 per cent of the pipeline had been paid out despite it being only 13 per cent completed.

China Petroleum Pipeline Engineering is a subsidiary of China National Petroleum Corp. Photo: Kyodo

Singapore’s The Straits Times newspaper on Saturday reported that Malaysian authorities seized 1 billion ringgit (US$243.4 million) from a HSBC account belonging to China Petroleum Pipeline Engineering (CPP) and transferred it to an account controlled by the finance ministry.

CPP – a subsidiary of state-owned China National Petroleum Corp – and the Malaysian government have been locked in talks over the status of the pipelines, which were cancelled in September 2018, just four months after Mahathir’s government took power.

The pipelines were cancelled amid questions about whether they were linked to money laundering.

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