Former navy chief pleads not guilty to corruption amid shipbuilding scandal

Updated at 5:54 p.m. ET on 2022-08-17

A former Malaysian navy chief pleaded not guilty Tuesday to three charges of criminal breach of trust in connection with millions of dollars in unauthorized payments when he ran a government-owned shipyard in 2011. 

Ahmad Ramli Mohd Nor, 79, served then as managing director of the Boustead Naval Shipyard Sdn Bhd (BNS), which lately has become embroiled in a controversy around a stalled, multi-billion-ringgit project to build littoral combat ships for the Royal Malaysian Navy.

“I understand [the charges], I plead not guilty and claim trial,” Ahmad Ramli told Kuala Lumpur Sessions Court Judge Suzana Hussin, according to a report by state news agency Bernama. He was released on 500,000 ringgit ($112,000) bail and ordered to surrender his passport.

It was not immediately clear whether the case against Ahmad Ramli and an investigation by the Malaysian Anti--Corruption Commission into the scandal over the combat ships are connected.

If convicted, he could face two to 20 years in prison along with a caning and a fine for each charge.

The charges against him stemmed from alleged payments totaling 21 million ringgit (U.S. $4.7 million) that were made to three Singapore-based companies without approval from the BNS board of directors.

Ahmad Ramli allegedly approved 13.5 million ringgit ($3 million) to Setaria Holdings Ltd. without board approval between July 26, 2010, and March 25, 2011, according to the charge sheet. The second charge deals with an alleged unapproved payment of 1.36 million ringgit ($304,500) to JSD Corp. Pte Ltd. between April 19, 2011, and May 4, 2011.

In the third charge, he allegedly approved a payment of 6.1 million ringgit ($1.3 million) to Sousmarin Armada Ltd. between Oct. 28, 2010, and Nov. 22, 2010.

None of the Singaporean companies had dealings with BNS, a source with the Malaysian Anti-Corruption Commission (MACC) told The Straits Times newspaper.

Ahmad Ramli served as BNS managing director during the period of the payments and after he served as navy chief from October 1996 until his retirement in 1998, following a 35-year career in the Royal Malaysian Navy.

On Monday, MACC had issued a statement alerting journalists to the court action.

“This is to inform you that the Malaysian Anti-Corruption Commission has obtained permission to prosecute a former managing director of a company related to the case of a littoral combat ship,” the statement said.

Others could face charges

In an earlier statement from last week, MACC said it had completed investigations into “a few individuals” linked to alleged irregularities in the project to construct littoral combat ships (LCS). It submitted documents to the Attorney General’s Office “with a proposal from the MACC to consider charges against several individuals,” and is awaiting instructions from the office.

Malaysian Prime Minister Ismail Sabri Yaakob has said that those responsible should face criminal charges once enough evidence has been obtained. Meanwhile, members of his cabinet have called on the MACC to speed up its investigation into the delays around the ships’ construction.

In 2011, BNS received a letter of award from the Ministry of Defense to deliver six LCS as part of its fleet renewal plan, according to a report released by Parliament’s Public Accounts Commission earlier this month.

The 250-page report, which followed a two-year investigation, noted that a letter of intent for the project was drawn up in 2010, four years before the government awarded a contract to BNS for the six-ship, 9 billion ringgit ($2 billion) project – the largest defense contract in Malaysian history.

Issued on Aug. 4, the PAC report noted that while the Royal Malaysian Navy should have received five ships by this month, none had been delivered to date despite government spending of 6 billion ringgit ($1.36 billion) on the project.

CLARIFICATION: This report has been updated to clarify that the charges against Ahmad Ramli Mohd Nor are not necessarily connected to a Malaysian Anti-Corruption Commission investigation into the littoral ship scandal.