Perimekar: Chronicle of a death foretold?

By Céline Boileau | June 1, 2011
Free Malaysia Today

PETALING JAYA: Businessman Lodin Wok Kamaruddin has recently been cited by WikiLeaks as one of Prime Minister Najib Tun Razak’s close friends.

What WikiLeaks didn’t reveal is that Lodin Wok was also one of the directors of Perimekar Sdn Bhd until last year.

Last year too, the company registered huge losses.

Perimekar had acted as the go-between for the procurement of two French-made submarines by the Malaysian Defence Ministry. In the process, the company made RM534.8 million in commission.

A simple line, buried in a mass of documents, is sometimes enough to cause an avalanche of surprises.

The US diplomatic cable from the US embassy in Kuala Lumpur revealed by WikiLeaks on May 19 contains a list of friends of Najib.

One of them is “Lodin Wok Kamaruddin, Chief of the Armed Forces Fund Board”, an institution also known as Lembaga Tabung Angkatan Tentera (LTAT).

Due to the various companies in which Lodin Wok has held positions of responsibility, the businessman may find himself involved in the case of “Scorpene scandal”, currently under probe in France.

Thus, in addition to his position in LTAT, Lodin Wok is deputy chairman of Boustead Holdings Bhd. These two companies hold 20% each of Perimekar shares, through the holding KS Ombak Laut Sdn Bhd. The remaining 60% is held by KS Ombak Laut.

What is less known is that according to Perimekar financial statements, Lodin Wok is one of the five directors of Perimekar, alongside Mazlinda Makhzan, Rozana Abdullah Meili, Abdul Rani Mohd Hussin Abdullah and Mohd Hussin Tamby.

He also sits on the boards of Affin Bank Bhd,one of Perimekar’s bankers.

These string of “coincidences” could place the 61-year-old businessman in an difficult position regarding the submarines deals.

When contacted for comment, Lodin Wok said he had resigned from Perimekar board on July 1, 2010 after the company completed its contract with the government upon the delivery of the two Scorpene submarines. He added that he was a director in the company as a representative of LTAT.

Ups and downs of Perimekar

Besides, it appears that Perimekar has been declining since last year. Suspected of being created for the sole purpose of distributing a RM500 million commission between Malaysian and foreign beneficiaries after the sale of the submarines, the company, registered in 1999, defines its activity as “marketing, maintenance and other activities related to submarines and surface vessels…”.

The financial statements report that Perimekar has a single customer: the Malaysian government.

They also show that the company has a wide range of financial performance from year to year. For example, while the company has reported a net loss of RM8.2 million in 2003, it declared a net profit of RM24.7 million the following year.

In 2008, Perimekar also became a group with two small subsidiaries (Prima Laksana and Gagah Nirwana).

Now, has the golden age of Perimekar gone? Between 2009 and 2010, while the submarines were being delivered, Perimekar’s activity has (almost) tumbled down: the company has seen its net income decrease from a profit of RM19 million to a loss amounting to RM3.3 million.

The turnover has plunged from about RM85 million to RM23 million – an amount still comfortable enough for its shareholders.

They have been granted dividends of RM56.2 million in 2009 (66% of the turnover) and RM18.7 million in 2010 (81% of the turnover).

Between 2003 and 2010, the company received more than RM200 million from its contract with the government.

However, the financial report of 2010 stated: “The company’s project with the governement of Malaysia was completed on Dec 25, 2009, after which a downsizing exercise was done in a fair manner and the company was focusing on prospecting for other viable business opportunities.”

The second company

According to Dr Kua Kia Soong, director of Suaram and author of the book “Questioning arms spending in Malaysia”, the rise and fall of Perimekar sounds like a convenient story to hide from the investigation into the Scorpene deal.

“We would like a Royal Commission of Inquiry to investigate how Perimekar disbursed 114 million euros (RM500 million) for apparently ‘coordination and support services” in those six years,” he said.

“Looking at the financial accounts of the company, Perimekar did not have the means to undertake such a contract,” he added. From 2003 to 2004, the company declared a revenue from 0 to RM67 million.

But Perimekar is not the only Malaysian company being involved in the Scorpene deal.

Boustead DCNS Naval Corp, a 60:40 joint venture between BHIC Defence Technologies and the French-based DCNS, started in 2009, was awarded by the defence minister a RM532 million contract related to the Scorpene submarines.

The company thus undertakes service support of Scorpene submarines from 2010 to 2015. BHIC Defence is owned by BHIC (Boustead Heavy Industries Corporation), whose chairman is Lodin Wok.

Céline Boileau is a freelance writer based in Paris.

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