9:23pm Thu Jun 5th, 2003
A police report was lodged against the top gun of an
aircraft maintenance company which holds major contracts
with the Royal Malaysian Air Force for alleged corruption
report against Airod president Ahmad Johan (photo)
was lodged by PRM vice-president R Sivarasa with the Bukit
Aman federal police headquarters in Kuala Lumpur.
Speaking to reporters, PRM president Dr Syed Husin Ali
said they possess evidence of "highly questionable
payments" of up to RM5.7 million from Airod to Quality
Ranch - a company set up by Ahmad and his son Edron Hayata.
payments were made for ‘consultancy work’ involving
extensions on two C130 aircraft owned by the RMAF and
contracted out to Airod - of which Second Finance Minister
Jamaludin Jarjis is a director and believed to be the
largest individual shareholder.
The Defence Ministry signed the deal - worth RM 102.3
million - with Airod in June 2001.
According to Syed Husin, the actual consultancy work was
carried out by United States-based Lockheed Martin.
He added that however the consultancy contract was given
to Quality Ranch although the company did not have any
experience in the field of aviation.
Three invoices from Quality Ranch to Airod - both of which
are under Ahmad’s control - for the payments starting from
Dec 4, 2001 to Aug 1 last year were also distributed to
no details of the consultancy work were included in the
invoices for the payments of RM3 million, RM1.2 million
and RM1.5 million respectively.
"We believe that no actual business activities actually
took place between Quality Ranch and Airod... It appears
that Quality Ranch is being used to siphon funds from
Airod and this needs full investigation," said the police
report, a copy of which was also made available.
As of August 2001, Ahmad and his son were no longer
directors of Quality Ranch and were replaced by two
secretaries-cum-personal assistants, Ajibah Hossein and
According to the police report, Airod is controlled by
Aerospace Industries Malaysia (AIM), a private company
chaired by Ahmad.
AIM is parent to a number of subsidiary companies dealing
with the defence industry such as ATSC, which services the
Russian-made MiG-26 aircraft, and SMEI which also owns a
number of subsidiaries producing rifles, weapons, hand
grenades and aircraft components.
The Finance Ministry owns 10 percent of AIM shares through
the bailout vehicle Khazanah Nasional while the other 90
percent is owned by PJS Industries - of which Ahmad is
also a director.
All three companies - Quality Ranch, PJS Industries and
Airod - share the same registered address in Taman
Setiawangsa, Kuala Lumpur.
Meanwhile, the report also contained a second allegation
against Ahmad, involving another one of his companies
Fabel (UK) Ltd, which supplies spares to Airod for its
aircraft repair and maintenance work.
The report said prior to Ahmad becoming president of Airod,
spares were obtained from the original manufacturers but
now since the spares come from Fabel, the cost of
obtaining them is higher.
the end of the day, spares have to be paid for at a higher
price by Airod and RMAF. The people end up having to pay
more," said Syed Husin.
He also expressed concern over the implications of the
concentration ownership of key defence industry companies
in the hands of one man.
"It is certainly very dangerous to have a single person
controlling so much of the aerospace industry, especially
when there are so many allegations of corruption against
"How is it that the government can allow him to have such
enormous control over the production of materials that can
directly affect national security?"asked the PRM
allegation levelled against Ahmad, was that he authorised
payments to himself amounting to RM3.4 million in the form
of personal cheques.
Syed Hussin said the business tycoon’s practice in issuing
34 separate cheques of RM100,000 may be indicative of a
need to hide such information.
"We believe that RM100,000 is the maximum he is authorised
to make without reference to the board of directors," he
The complainants also submitted documentary evidence
involving the transactions.
Aman public relations chief Supt Jamshah Mustafa received
the report at the entrance of the police headquarters
together with copies of company registrations, invoices
and balance sheets of companies allegedly involved in
"What we have here is only the tip of the iceberg as this
is what we know. Which is why we are asking the police to
investigate immediately," said Syed Husin.
Meanwhile, a joint statement distributed to the press
signed by the PRM president and his Keadilan counterpart
Dr Wan Azizah Ismail, also alleged that companies owned by
Ahmad were involved in unfair union-busting.
claimed Airod unfairly dismissed five leaders of its
workers’ union, while SME Aviation, another company which
Ahmad is a director of, had closed down its workers’
They added that these actions were believed to be taken
because the companies wanted, among others, to intimidate
workers for questioning activities within these entities.
Also present were PRM secretary-general Sanusi Osman,
Youth chief Faizal Sanusi and. Keadilan vice-president Dr
Despite numerous attempts, Ahmad could not be reached for