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Sunday, August 31, 2008

Auditor-General Report 2008 - CTRM investment failure

Auditor-General's Report:: Half billion spent, RM25m returns
August 31, 2008, NST Online

OVER half a billion ringgit was spent, but all the Malaysian government got in return from its investment in Columbia Aircraft Manufacturing Corporation in the United States was RM25 million.

From 1994 until September last year, the government and Composites Technology Research Malaysia Sdn Bhd (CTRM) poured RM537.04 million into Columbia Aircraft in the form of investments and loans.

(The government, through the Finance Ministry, is the biggest shareholder in CTRM, owning about 90 per cent of its shares. Petronas is the other shareholder.)

However, the government's aim of reaping profits from its investments in the aircraft manufacturing company failed because of the company's weak management and unscrupulous spending by its senior officers.

The Auditor-General's report said the company's board of directors failed to expedite the manufacture of aircraft while the Minister of Finance Incorporated did not monitor the company's activities.

Columbia Aircraft's main activities were to plan and manufacture three four-seater light aircraft models -- the Columbia 300, 350 and 400 -- using composite material for the US market.

The company had accumulated losses of RM480.18 million at the end of 2006.

As a result of its huge debts, Columbia Aircraft filed for bankruptcy at the Oregon Court on Sept 24 last year.

On Nov 27 last year, Cessna, another aircraft company, bought over Columbia Aircraft for only RM56.27 million. The Malaysian Government only got RM25 million from the sale.

Source: NSTP

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