KUALA LUMPUR, Aug 11 — Boustead Naval Shipyard Sdn Bhd used funds from the littoral combat ship (LCS) contract to pay suppliers for another project as the firm was responsible for developing Malaysia’s warship construction ecosystem, Datuk Seri Najib Razak claimed today.

The former prime minister said BNS also needed to ensure the continuity of the suppliers it paid for the New Generation Patrol Vessel (NGPV) project as these were the same ones that would supply parts and services for the LCS.

"So, if they did not pay off their old debts to their previous vendors and suppliers from the NGPV project, who else would want to or can afford to provide Boustead the supply it needs for the LCS construction?

"And if the debt is not repaid and the vendors and supplies are forced to close shop, what would happen to the defence shipping industry?” he said in a Facebook post.

He also insisted that he was not involved in Boustead’s decision making at the time.

DAP veteran Lim Kit Siang previously noted concerns of "hidden hands” behind the delay of the construction of the LCS, and implicated Najib, who was prime minister at the time.

He pointed out that Najib was not only the prime minister and the finance minister at the relevant time of the procurement of the six LCS, but he was defence minister twice, the first time from 1991 to 1995 and the second time from 2000 to 2008.

Lim also noted that Najib’s successor as defence minister from 2009 to 2013 was Datuk Seri Ahmad Zahid Hamidi, who overturned the Navy’s recommendation to procure Signma LCS from the Dutch and in favour of the French-made Gowind LCS.

PKR deputy president Rafizi Ramli today also alleged that there were plans from the beginning to hide irregularities in the LCS project for Malaysia’s navy through various complicated transactions.

He said the plan included the engagement of two subcontractors — Contraves Advanced Devices Sdn Bhd (CAD) and Contraves Electrodynamics Sdn Bhd (CED) — when Boustead Naval Shipyard Sdn Bhd (BNS) could have handled the project on its own.

The LCS scandal came to light last Thursday when the Public Accounts Committee (PAC) presented its report on the project in Parliament.

PAC chairman Wong Kah Woh revealed that cost overruns of the LCS project have reached RM1.4 billion, including RM400 million used to pay old debts from NGPV project.

The LCS project is the largest procurement in the history of Mindef with a total cost of RM9 billion.