4. Lack of Segregation of Authorization.

Eric Chia suggested for the formation of a tendering committee(TC)

comprising of himself as the chairman together with the other two directors
which he know well of them. The BOD unanimously approved the procedure
for the purchases and awards of contracts as directed by the MOB and
proposed by tendering committee. Zaina further reported that the BOD also
resolved that Eric be allowed to conclude purchases and contracts without
referring to the tendering committee for consumable goods like electrodes,
scrap, iron are lubricants and contracts of RM5 Million and below.

5. Lack of Documentation Evidences.

The unawareness on the many incidents related to the accused Eric Cia
by the ACA investigating officer responsible in handling the case, implied
some form of subjugation and control of the course of justice by Mahathir. The
Swiss Government prepared to cooperate with the Malaysian authorities in
probing the missing Perwajas money in Swiss bank accounts, but also an
official request to freeze the bank accounts of those allegedly involved in the
scandal could be done by the ACA when the Mutual Assistence in Criminal
Matters Bill 2002 became law. So, they failed to check out of the evidences.

6. Lack of Internal Control

Perwaja Steels RM 9.1 billion liabilities of which RM 4.1 billion are in the
form of directs loan, RM 5.1 billion in government-guaranteed borrowings and
a loan of RM 105 million to one private company which is Equal Concept Sdn
Bhd that was formed to take over the running of Perwaja. The company was
reported to suffer losses of more than RM 2.9 billion and the 1998 Auditor-
Generals report stated taht Perwaja had been the biggest loan defaulter by
not paying up federal loans of RM893 million.
Crony capitalism happened in Perwaja Steel Sdn Bhd

Crony capitalism refers to forms of capitalism in which leading

businessmen enjoy closse personal relationships with key politicians . Crony
capitalism is often associated with corruption and it may be exhibited by
favoritism in the distribution of legal permits, government grants, special tax
breaks, other form of dirigisme , Crony capitalism is believed to arise when
political cronyism spills over into the business world ,self serving friendships
and family ties between businessman and the government influence the
economy and society to the extent that it corrupts public-serving economic
and political ideals. In many underdeveloped countries crony capitalism may
be perceived both as corrupt and as antinational.

One of the most biggest financial loses in Malaysian history and being
seen by world of business that had burdened the Malaysian taxpayers was
the Perwaja Steels RM 9.1 billions liabilities of which RM 4.1 billion are the
form of directs loans , Rm 5.1 billion in government-guaranteed borrowings
and a loan of RM 105 million to one private company(Equal Concept Sdn
Bhd) that was formed to take over the running of Perwaja. The company was
reported to suffer losses of more than RM 2.9 billion and the 1998 Auditor-
Generals report stated that Perwaja had been the biggest loan defaulter by
not paying up the federal loans of RM 893 million.

On 16 June 1997, Perwaja Steel was handed over to two cronies: Abu
Sahid of Maju Holdings, who took a 51% stake saw it as an opportunity to be
known as a steel man, and the Pheng family of Kinsteel who took over the
remaining to thwart threat to their own steel operations business. In 2008,
Perwaja Holdings was listed on the main board of Bursa Malaysia and
Perwaja Steel became its 100% subsidiary. EPF filed suit against Perwaja
Steel for RM 4.5 billion and it went into receivership in December 2014.