Prime Minister Mahathir Mohamad should explain whether state-owned steel company Perwaja, declared insolvent four years ago, has since lost another RM800 million of taxpayers money, DAP chairman Lim Kit Siang said today.

Lim called on the prime minister to present a White Paper, to disclose details of the Perwaja scandal, as well as what went wrong with the "bailout" plan that awarded Maju Holdings the rights to acquire Perwaja's assets.

"In 1996, I had questioned the government's decision to approve the 'bailout' plan by Maju Holdings. It has now been proven right, as the government and taxpayers have now been placed in a position of having to bail out the bailor!"

Lim was commenting on an Asian Wall Street Journal article today that Perwaja continues to operate in the red, with new losses amounting to another RM800 million, bringing its total losses close to RM11 billion to date.

Perwaja was a cornerstone of Malaysia's industrialisation drive in the 80s, but had failed to post any profit since its inception.

An internal audit report on Perwaja, disclosed in 1996, had declared the corporation insolvent, unable to pay RM5.7 billion in domestic and foreign borrowings, and mired in financial irregularities.

In the bailout exercise, full responsibility was assumed by the government for Perwaja's RM9.9 billion in accumulated losses and other liabilities, while Maju Holdings was allowed to start on a clean slate through Equal Concept, which is 51 percent owned by Maju Holdings and 49 percent by the government.

However, by 1998, Perwaja's steel business under Equal Concept posted a loss of RM340 million.

According to Lim, the bill for Perwaja borne by taxpayers at the end of 1998 totalled RM 9.1 billion, of which RM4.01 billion was in the form of a direct government loan to Perwaja Terengganu, making it by 1998 the single largest recipient of government loan to a company. ("[#1] Terengganu will not inject fresh funds into Perwaja[/#] ", April 28)

The Anti-Corruption Agency had announced an investigation into the affair shortly after chief executive Eric Chia's resignation from Perwaja in April 1996. However, since then, nothing has yet been publicly disclosed.

Mustafa Ali, exco member for economic development, petroleum industry for Terengganu, which has a 19 percent stake in Perwaja Terengganu, declined to comment on the case when contacted by malaysiakini .