KUALA LUMPUR, Aug 18 — PKR deputy president Rafizi Ramli today alleged that RM192 million from the littoral combat ship (LCS) project has been funnelled to nonexistent, untraceable offshore accounts.

Rafiz claims to have sighted an internal investigation by Boustead Heavy Industries Corporation Bhd. That report was not shared with the press.

In a statement this afternoon, he said that the report found that LCS subcontractors had paid €43.69 million, equivalent to RM210 million, based on invoices from a French firm.

However, the payments went to a Malta-incorporated phoney firm.

He said based on the French firm’s financial returns to the French authorities, only €3.53 million (around RM18 million) was collected during that period.

"This means RM192 million had been transferred to off-shore companies (and the funds) can no longer be traced,” alleged Rafizi.

He said that the received payments were for technical services that do not exist.

Rafizi said the French firm was appointed to the LCS project’s subcontractor as a spare part supplier following recommendations by another French company.

He added that although the LCS project received invoices that appeared to come from France, the payments were actually made to an account in Singapore by another company.

"The modus operandi used is similar to the method used to steal 1MDB money. Fake companies are set up all over the world whose name is identical to a real company.

"The invoice is sent from one company, but the payment instructions are for the invoice to be paid to an account registered under a company whose name is almost the same but a different company," Rafizi said.

Rafizi added that the second French company’s involvement in the misappropriation of funds were clearly stated in the conclusion of the internal investigation.

He said the investigators also concluded that the two French companies were part of a scheme that transferred money from this project in violation of the Money Laundering Act.

He claimed that this was confirmed when investigators compared the amount paid by the LCS project to purchase replacement equipment to the French firm, compared to the amount reported in its financial statements for the period 2011 to 2015.

Rafizi said that such an elaborate scheme to "steal people’s funds" cannot happen without backing from superiors more powerful than a recently indicted retired Navy Commander.

He urged former prime minister Datuk Seri Najib Razak, and former defence ministers Datuk Seri Ahmad Zahid Hamidi and Datuk Seri Hishammuddin Hussein to answer.

Yesterday, a declassified report from the Investigating Committee on Procurement, Governance and Finance (JKSTUPKK) on the LCS project was made public.

Based on the report the government may need to fork out RM11.145 billion in total for the six controversial littoral combat ships, a substantial increase from the RM9 billion agreed upon years ago.