DAP questions contract to print tax labels awarded to minister’s brother

Petaling Jaya Utara MP Tony Pua questioned the government’s decision to award a security-labelling contract for liquor and beer to a company controlled by Defence Minister Datuk Seri Hishammuddin Hussein's brother. – The Malaysian Insider file pic, October 15, 2014.

DAP today raised concern over Putrajaya's decision to award an RM77 million security-labelling contract for liquor and beer from the Royal Malaysian Customs Department to a company controlled by Defence Minister Datuk Seri Hishammuddin Hussein's brother.

Petaling Jaya Utara MP Tony Pua said he wanted to know the criteria leading to the government's consent to Lembah Sari Sdn Bhd as it already owned a concession to print security labels for all local and imported cigarettes.

"Is it because the company, owned by Datuk Haris Onn, was offering the lowest bid for the contract? Is this the only company with the expertise to do the job? Or was the decision made primarily because it is the cheapest?" asked Pua at the parliament lobby today.

The Edge Malaysia on September 12 reported that the contract was to design, print, store, supply and distribute banderols (tax stamps) for liquor (including beer) between 2014 and 2019.

The company would also supply the department with the authentication devices and provide them with the necessary training.

The report also said that Lembah Sari first took over the concession to print security labels for cigarettes from Kod Efisien Sdn Bhd in 2006, three years after Kod Efisien got it from the Customs Department.

“We are not sure how the contract changed hands, but it does raise eyebrows over how concessions are being awarded by the government,” Pua said, quoting the news report.

Pua said he was confident the use of security labels would not deter smuggling of liquor and cigarettes into the country.

He suggested that the government use the available funding to find another alternative to resolve the problem.

“Based on a report published in July last year, the government suffered losses of about RM1 billon each year due to smuggling of cigarettes.

“This alone shows that the use of labels only increases the cost and gives revenue to the company but is unable to prevent illegal entry of cigarettes into the country.”

He said the government should focus its resources on finding a solution to the problem at hand instead of distributing the burden from the rising costs to the people.

- TMI