DAP has called on the police to launch an investigation into Prime Minister Dr Mahathir Mohamad's role in the multi-million ringgit Perwaja Steel scandal.

Deputy secretary-general M Kula Segaran said in a press statement that Mahathir should be investigated because he has been closely involved in the running of Perwaja since the company's inception in 1982.

Kula Segaran, the former member of Parliament for Teluk Intan, said it was Mahathir who had first approved sums of more than half a billion ringgit for the management of Perwaja by tycoon and former Perwaja managing director Eric Chia.

"(This was done) in utter violation of the cardinal principle of collective cabinet consideration and decision on vast sums of public money," said Kula Segaran.

Kula Segaran also attached two letters sent by Mahathir to Chia approving the setting up of two Perwaja plants.

In one of the letters dated March 23, 1990, Mahathir had approved a plan for Perwaja to build new infrastructure in Terengganu with a capital sum of RM575 million.

When contacted today, Perak DAP chief Ngeh Koo Ham said a police report based on the letters was lodged at the Ipoh police station last Saturday by the party's state leaders.

Perwaja's steel-making operations started in 1982 as a joint venture between the Heavy Industries Corporation of Malaysia (Hicom) and Japan's Nippon Steel Corporation.

The full extent of the company's problems became evident when it was declared insolvent in 1996, due to accumulated losses of some RM3 billion.

Lingering questions

Kula Segaran also expressed dissatisfaction over Perwaja's continued losses despite a change in management in 1996, which saw Maju Holdings taking over.

In a reply to Parliament earlier this month, Deputy Finance Minister Dr Shafie Mohd Salleh said the company still registered losses between 1997 and 2001, albeit at decreasing levels.

In 1997, Perwaja was said to have made RM617 million in losses. This figure fell to RM320.9 million in 2001. (See chart)

"What will be the losses for 2002 and 2003? According to the deputy finance minister, all losses from 1997 to 2001 will be borne by the government until 2007," Kula Segaran said.

The long-running Perwaja scandal has remained recurrently raised by opposition parliamentarians in view of the many unanswered questions lingering over the full extent of mismanagement of the company.

Mahathir's involvement has often been singled out by critics because Perwaja Steel was set up in accordance to his vision for Malaysia to develop its own steel producing capacity, in order to support nascent local heavy industries, particularly the national car project.

In an interview with Bernama two weeks ago, Mahathir said, however, that Perwaja had failed because those responsible did not understand the business, and not because of problems with the idea of Malaysia entering the heavy industry sector.