KUALA LUMPUR, Sept 22 — A Penang government official who previously affirmed that Chinese developers bidding for  the Penang undersea tunnel project had no advantage over its competitors today changed his tune in the corruption trial of former state chief minister Lim Guan Eng.

Muhamad Azrai Mohamad Zaini, the prosecution’s fourth witness, said the Beijing Urban Construction Group (BUCG) held an advantage when bidding for the 2012 project following their involvement in state government meetings discussing the scope of the project, and through a Memorandum of Understanding (MoU) that was signed between the developer and the state administration.

“I want to stick to my previous statement that was done, where I said the it was not reasonable for BUCG to be involved in the processes leading up to the state government’s Request for Proposal,” he said during re-examination by Deputy Public Prosecutor Wan Shaharudin Wan Ladin.

He said BUCG’s initial involvement with MoU was nothing out of the ordinary, but things changed when the company subsequently became a bidder. He explained that helping conceptualise the project effectively gave BUCG the upper hand.

In his previous testimony, Muhamad Azrai told the court that he saw a possible conflict of interest with BUCG’s early involvement on the project, but not necessarily to the point that it would be an unfair advantage during bidding.

Muhamad Azrai was at that time the assistant director of infrastructure in the Penang State Economic Planning Unit. He is currently private secretary to current Penang Chief Minister Chow Kon Yeow.

Wan Shaharudin: Why would it be unreasonable?

Muhamad Azrai: Because they were there at the start from the signing of the MoU, where BUCG was supposed to help the state government to prepare for this project, so to me based on that agreement of the MoU, it was enough for a direct appointment to be done. And BUCG had the expertise to do the project that involves high technology such as a tunnel project. Even if [the state government] wanted preparation documents and pre-qualifications and such, [its involvement] is only to that point, to help the state government prepare the scope, specifications and not to later enter the RFP themselves.  

Wan Shaharudin: Previously you disagreed that BUCG did not have an advantage, then when asked again you said you agreed that BUCG had no advantage. Can you please explain the disparity in your answer?

Muhamad Azrai: At that time I was bombarded repeatedly with questions [by the defence lawyer] and I was confused with the question and that was why I gave an answer contradicting my statement.

Wan Shaharudin: So, BUCG had an advantage?

Muhamad Azrai: Yes, they had an advantage. Like I have said, from the MoU, the state government had meetings with BUCG, there would have been no issue even though if BUCG wanted to help with the project. But later on, if they entered and joined the RFP, I think that is not reasonable.

BUCG is one half of the Consortium Zenith BUCG joint venture that was subsequently awarded the RM6.341 billion project to build three roads and the undersea tunnel in Penang.

Lim has been accused of seeking and accepting bribes from Consortium Zenith BUCG’s managing director Datuk Zarul Ahmad Mohd Zulkifli.

Maurice Lacroix timepiece

The prosecution next called a former luxury watch broker, K. Rajan Gunaretnam, 66 to testify about the sale of a Maurice Lacroix Swiss-made luxury watch to Zarul sometime between 2015 and 2016.

Rajan told the court that he was introduced to Zarul by a mutual friend about 10 years ago, and knew the latter as a watch and timepiece collector who asked him for the particular Maurice Lacroix watch.

Wan Shaharudin: Did you manage to find the Maurice Lacroix watch as per requested by Datuk Zarul Ahmad?

Rajan: Yes.

Wan Shaharudin: How much did you buy the watch for from the dealer?

Rajan: RM20,000.

Wan Shaharudin: And how much did you sell it for to Datuk Zarul?

Rajan: RM40,000.

Wan Shaharudin: Can you explain why is there a vast difference in prices and how you came to the figure?

Rajan: The normal practice is that the retail price is that and selling price will be that, so here the retail is RM40,000, and for the dealers is RM20,000. Most luxury products have a 35-50 per cent margin.

During cross-examination by defence lawyer Gobind Singh Deo, Rajan explained that as a watch broker, he would reach out to Zarul if and when he came across several “good” watches he thought the latter might be interested in.

“When I get some good watches I will buy it and call him, he will then tell me to bring them over and he would buy the watches,” he said.

Rajan said they usually met in Zarul's office and would usually show the latter between three to 10 different timepieces.

He said Zarul told him the watches were purchased for his staff and some for his personal collection.

But Rajan affirmed that the sale of the Maurice Lacroix watch had nothing to do with Lim.

He said he had never met the accused prior to today.

“No sir, I have never met. I have not seen him and have had no dealings with him,” he replied Gobind when asked about his relationship with Lim.

In this trial, Lim faces four charges, one under Section 16(a)(A) of the Malaysian Anti-Corruption Commission Act for having allegedly solicited kickbacks of 10 per cent of future profits from Zarul as a reward to help the latter’s company secure the project in March 2011, as the then CM.

He is also facing a charge under Section 23(1) of the same Act for allegedly receiving RM3.3 million in kickbacks from Zarul between January 2011 and October 2017 for allegedly helping the latter’s company secure the mega project.

The trial before judge Azura Alwi continues tomorrow