PUTRAJAYA (Nov 7): 1Malaysia Development Bhd (1MDB) former director of investment, Kelvin Tan Kay Jin, will remain a defendant in the suit filed by the firm and its four subsidiaries.
This follows the Court of Appeal on Monday (Nov 7) dismissing Tan's appeal to strike out the claim made against him and six others, including former prime minister Datuk Seri Najib Razak.
Judge Datuk Vazeer Alam Mydin Meera, who led the three-member bench, ruled the High Court's decision not to strike out the suit against Tan was correct.
"We (the bench) agree with the High Court judge's finding and concur with the reasons he made in dismissing the application.
"The application by the appellant (Tan) to strike out the respondents' claim under Order 18 Rules of Court 2012 cannot be sustained on the grounds set in the notice of application [to strike out]," he said.
The law, Vazeer Alam said with regard to striking out proceedings, is settled.
"When the pleadings and the affidavits in this case are considered in its entirety, it cannot be said that the claim against the appellant (Tan) is plainly and obviously unsustainable," the judge said during online proceedings.
The bench that comprises Court of Appeal judge Datuk M Gunalan and High Court judge Datuk Azman Abdullah ordered Tan to pay costs of RM10,000.
Tan is one of the witnesses who have testified in the ongoing 1MDB criminal trial involving Najib.
US$8 bil claim by 1MDB
1MDB, along with its subsidiaries 1MDB Energy Holdings Ltd, 1MDB Energy (Langat) Ltd, 1MDB Energy Ltd and Global Diversified Investment Co Ltd (formerly known as 1MDB Global Investments Ltd), had filed a US$8 billion (RM37.95 billion) suit against Najib and six others.
They claimed that Najib, formerly prime minister and chairman of 1MDB's board of advisers, and others had facilitated the companies to enter into sham agreements to create a circuitous trail of money to ease or conceal the misappropriation of 1MDB funds.
The companies also contended that Najib disregarded his obligations under Article 117 of the 1MDB memorandum of articles and association, and abused his power in exercising his public functions to maliciously commit fraud and misappropriation with others resulting in the fraudulent transfers of funds and losses to them.
However, the companies were claiming specifically from Tan and Najib the US$1 billion lost from 1MDB following the transfers of US$700 million to Good Star Ltd and the balance US$300 million into the 1MDB-PetroSaudi International Ltd joint venture account in 2009.
Tan's counsel GK Ganesan said on Monday that his client should not have been included in the claim when several other prominent names of the 1MDB board of directors who were initially named were suddenly omitted from the claim.
Furthermore, Ganesan said Tan's role was only as a transcriber of the board's minutes as the company secretary was not able to attend, and although he did prepare the proposal paper for the transfers of funds, as stipulated in the 1MDB statement of claim, the final decision to transfer the funds came from Najib.
"There was a second valuation paper for the joint venture deal to be done, but Najib stepped in and said there was no need for the second valuation. Najib was in total control of 1MDB being the chairman of the board of advisors where monetary decisions would have to be made by him.
Hence, he said, regardless of Tan's role, it was Najib who had a role in the dubious transfers as shown by the court documents filed by 1MDB.
Initially, the plaintiffs had also named Tan Sri Che Lodin Wok Kamaruddin, Tan Sri Ismee Ismail, Tan Sri Ong Gim Huat and Ashvin Valiram besides ex-1MDB chief executive officers Datuk Shahrol Azral Ibrahim Halmi and Mohd Hazem Abdul Rahman and former chief financial officers Azmi Tahir and Radhi Mohamad.
Also named in the lawsuit were former 1MDB officers Terence Geh Choh Heng, Jasmine Loo Ai Swan, Casey Tang Keng Chee, Vincent Beng Huat Koh, Tan and Nik Faisal Ariff Kamil.
However, now the names of Che Lodin, Ismee, Ong, Ashvin, Shahrol Azral, Hazem, Azmi and Radhi were withdrawn, resulting in seven defendants remaining.
Loo, Geh, Tang and Nik Faisal are out of the country.
Siva Kumar Kanagasabai, representing 1MDB, in reply argued that this is not a straightforward case for the appellate court to allow the striking out application.
"This follows that there are so many facts in dispute and hence it has to go to trial. The High Court judge was right in not allowing the striking out of this suit by Tan in this infamous scandal that resulted in a massive amount of money to be lost," he added.
Last March, High Court judge Atan Mustaffa Yussof Ahmad dismissed Tan's striking out application, ruling that it was not an action that could be struck out based on the pleadings and circumstances of the case.
The court, he said, amongst others did not accept Tan's submissions that there was no nexus between him and the plaintiffs' losses, therefore he should be named as a defendant in this action.