Vincent Tan files lawsuit against govt, Spanco for 'loss' of vehicle fleet concession

17 Jul 2023 10:26pm
Berjaya Group founder, Tan Sri Vincent Tan
Berjaya Group founder, Tan Sri Vincent Tan

SHAH ALAM - The founder of the Berjaya Group, Tan Sri Vincent Tan, has filed a lawsuit against the government and Spanco Sdn Bhd over a multimillion-ringgit vehicle fleet concession.

Tan claimed that in 2018, the previous administration issued a Letter of Intent (LoI) selecting the Berjaya Group, in partnership with Naza Group, to handle the fleet concession.

To jointly compete for the lucrative deal, which reportedly involved 12,500 vehicles and was valued at about RM300 million per year starting from the fifth year, Berjaya and Naza established a 49:51 partnership in 2018, according to a report published in NST.

Tan stated that the consortium, as per his claim as LoI from the Finance Ministry to replace Spanco Sdn Bhd as the fleet management provider.

Before the official award announcement, Tan alleged that the LoI was unjustly terminated.

"We have initiated a lawsuit against the ministry regarding this matter and we anticipate going to court later this year.

"You will receive further updates in due course," he said during a press conference concerning the RM700 million sale of Berjaya Group's waste management business to Naza Group.

In February 2018, the government requested proposals for a 15-year contract which includes the supply, maintenance, and fleet management of its official vehicles.

Among the other bidders were Spanco, which had been managing the concession since 1994, Sime Darby Bhd, DRB-Hicom Bhd, Samling Group, Comos, Go Auto, and the Naza-Berjaya partnership.

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Tan further said the Naza-Berjaya consortium emerged as the winning bidder with the lowest offer.

"We secured the contract as the lowest bidder and received the Letter of Intent (LoI). However, following a change in administration with the appointment of Tan Sri Muhyiddin Yassin as the prime minister, we received a notice three months later that our LoI had been terminated.

"(The government) terminated our LoI and gave the tender to Spanco Sdn Bhd. Our tender was RM700 million cheaper than Spanco," Tan was reported as saying.

Tan raised a question regarding why the government had agreed to pay RM700 million more to Spanco.

"Perhaps the new administration believes that Berjaya and Naza are not sufficiently competent in the automobile or automobile maintenance industries," he added.

Tan further clarified that the consortium made changes to its shareholder agreement, increasing Bumiputera ownership to 60 percent.

"Berjaya's ownership has consequently decreased to 40 percent. I hope that the court will rule in our favour," he said.