The government should be cautious in making allegations concerning other countries or risk jeopardising trade and diplomatic relationships, said a Gerakan leader today.

Gerakan secretary-general Liang Teck Meng, in a statement, referred to the recent claim by Finance Minister Lim Guan Eng involving a Chinese company - China Petroleum Pipeline Bureau (CPPB).

Lim had said CPPB had used a loan it had received for pipeline projects in Malaysia to bailout 1MDB.

Lim's special officer, Tony Pua, had also alleged the same, two weeks ago.

The company has since denied the allegation, calling it "entirely false"

"This China company is the wholly-owned subsidiary of the fourth biggest company by revenue in the world and is fully-owned by the China government,” said Liang.

"Yesterday, this company had issued a statement denying the allegations and had warned the media to be factual in their reporting and not be influenced or pressured by unnamed sources to report false information that defames them.

"This is a big blow to the reputation and credibility of our finance minister as he is now accused of giving false information and defaming another country," Liang said.

Liang urged Lim and Pua to defend themselves by clarifying if the said China company had grossly overpaid the pipeline project to cheat Malaysia.

He also asked them to declare if they are certain that the company had no intention of completing the said project despite receiving the bulk of the payment and whether they are certain that the company had colluded with the previous BN administration to commit money laundering.

In the absence of any evidence to back up their allegations, Liang urged Lim and Pua to steer clear of "politically motivated" allegations which he pointed out could cause "serious harm to our investments, exports and eventually to the people."