Monday 22 Apr 2024
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PUTRAJAYA (Oct 5): FGV Holdings Bhd has failed to strike out a counterclaim by five of its former non-executive directors, including Tan Sri Ismee Ismail and Tan Sri Sulaiman Mahbob, over the controversial acquisition of Asian Plantations Ltd (APL) in 2014.

On Wednesday (Oct 5), the Federal Court dismissed a leave (permission) application by FGV to appeal to the apex court to hear the merits of the company’s appeal to strike out the counterclaim.

Federal Court judge Datuk Seri Hasnah Mohammed Hashim, the sole judge who sat in the online proceedings, refused to grant leave as she ruled that FGV had not passed the threshold of Rule 96 of the Courts of Judicature Act for the court to grant leave for the merits of the case to be heard.

Hasnah also ordered FGV to pay total costs of RM30,000 to the five former directors.

Apart from Ismee and Sulaiman, the other three former directors are Tan Sri Wan Abdul Aziz Wan Abdullah, Datuk Nozirah Bahari and Datuk Fazlur Rahman Ebrahim.

Following the apex court's decision on Wednesday, the main suit and counterclaim are set to go to trial in January 2023.

FGV was represented by Lambert Rasa-Ratnam while counsel Fahda Nur Ahmad Kamar appeared for the five former directors.

Fahda Nur confirmed the outcome when contacted by theedgemarkets.com. She said the trial will now commence from Jan 9 to 12 next year.

In civil cases at the Federal Court, appellants have to gain leave (permission) before the merits of the appeal can be heard based on questions of law, or if there is anything novel in the appeal.

In September last year, a three-member Court of Appeal bench reinstated the counterclaim by the five former directors, as it ruled that the counterclaim is not an “obviously unsustainable” case that the court could strike out at the pre-trial stage.

Judge Datuk Abdul Karim Abdul Jalil led the appellate bench that also included judges Datuk Supang Lian and Datuk Ghazali Cha in the unanimous decision.

“Even if the case is weak and not likely to succeed at the trial, there is no ground per se for the pleading to be struck out as long as it discloses some cause of action or raises some question fit to be decided by the judge,” Abdul Karim had said in the unanimous decision.

In November 2019, High Court judge Datuk Azimah Omar allowed the striking out of the counterclaim resulting in the five appealing to the appellate court.

Background to the suit

FGV filed the suit in November 2018 against its former group president and CEO Datuk Mohd Emir Mavani Abdullah and 13 others for RM514 million following the APL acquisition.

Others that were included in the suit were former Felda chairman Tan Sri Isa Samad (who was FGV chairman at the time), former chief financial officer Ahmad Tifli Mohd Talha, former business development of downstream cluster vice president Farisan Mokhtar, and former downstream cluster senior general manager Rasydan Alias Mohamed, besides the five mentioned.

FGV claimed it had brought about this legal action for loss suffered from their failure to discharge their respective fiduciary duty, duty of fidelity and/or duty to exercise reasonable care, skill and diligence in the group's acquisition of 100% equity interest in APL via a voluntary conditional cash offer in 2014.

It is claiming RM514 million for loss arising from the acquisition, or alternatively damages or loss from the acquisition as assessed by the court.

APL was listed on the London Stock Exchange’s Alternative Investment Market when FGV proposed to acquire it in August 2014 for £2.20 (RM11.50) per share or £120 million (RM628 million at the time).

At that time, the Singapore-based company had its plantations in Miri and Bintulu, Sarawak.

In the counterclaim, the five ex-directors named FGV and 10 individuals — Datuk Azhar Abdul Hamid, Mohd Hassan Ahmad, Datuk Dr Othman Omar, Dr Mohamed Nazeeb P Alithambi, Datuk Dr Salmiah Ahmad, Datin Hoi Lai Peng, Datuk Yusli Mohamed Yusoff, Dr Nesadurai Kalanithi, Datuk Mohd Anwar Yahya and Datuk Mohamed Suffian Awang — as defendants.

The five had alleged that the FGV board had initiated the civil suit against them to cover their weaknesses in managing the company that led to a drop in FGV’s share price and had alluded that the losses were due to the acquisition of the 100% stake in 2014.

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