KUALA LUMPUR (Nov 8): National Feedlot Corporation Sdn Bhd (NFCorp) was not able to pay back a RM250 million government loan it was given because the government had reneged on an execution agreement to build slaughterhouses that were required for the NFCorp project to start, according to its chairman Datuk Mohd Salleh Ismail.
Testifying in his defence at the High Court in the government's RM250 million civil suit against NFCorp, its chairman and nine others, Salleh said that because the government did not provide the infrastructure for the operations of a national feedlot centre in Gemas, Negeri Sembilan, NFCorp could not pay the loan back as there was no way to generate income.
He said that when the loan was given around 2008-2009, there was a three-year grace period according to the loan facility agreement between the government and NFCorp, meaning that first repayments of the loan was due on or about 2011-2012. However, Salleh also testified that the loans could not be repaid because the NFCorp accounts were frozen at that time.
Senior federal counsel Nurhafizza Azizan, who is representing the government, had asked Salleh during cross-examination about a notice of payment on Jan 19, 2012, which was sent to NFCorp by the Finance Ministry and why he did not adhere to the notice to pay back.
Nurhafizza: You received the notice to make payment from the Ministry of Finance on Jan 19, 2012? There was no payment made?
Salleh: No, because you (the government) ceased our account, so we couldn’t pay.
Nurhafizza: So you didn’t pay?
Salleh: You (the government) seized our account so we cannot pay. In December 2011, the account was frozen, we couldn’t take the money out (to make payments).
Nurhafizza then asked him about a meeting he had with then Treasury secretary general Tan Sri Mohd Irwan Serigar Abdullah at the Finance Ministry on March 18, 2013, where Salleh had allegedly agreed to make loan repayments for 2012 and 2013 which had not been paid.
He said that the agreement with Irwan to pay back the defaulted payments was based on the condition that NFCorp was sold, and that they had a potential buyer waiting.
“It’s a subjective agreement [with Irwan] subject to the sale of NFCorp. They (government) ceased our account and our money but they wanted us to sell. There was even a buyer. The condition was to take half of the loan money (which was frozen) and pay it back to the government and the other half to give to the new company to take and run the feedlot centre,” Salleh explained.
At this point, judge Anand Ponnudurai asked Salleh for a clarification: “You’re saying that the loan agreement was conditional [on NFCorp’s sale] but the letter (agreement letter) does not say it is conditional.”
Salleh replied that they did not have any intention to run away but to pay back the loan.
However, Nurhafizza said it was not stated in the agreement letter that the loan repayment was conditional.
The trial, which was supposed to go on for the better part of the day, had to be cut short in the afternoon as Salleh, 74, told Ponnudurai that he was on medication and was feeling unwell.
The judge allowed for the adjournment and requested that the trial begin on Wednesday (Nov 9) at 9.30am.
Salleh is represented by Datuk K Kirubakaran and Datuk Seri Rajan Navaratnam.
The government filed the lawsuit against NFCorp and Salleh in May 2019 to recover the loan.
Salleh is the husband of former Wanita Umno chief Tan Sri Shahrizat Abdul Jalil, who was also formerly the minister of women, family and community development.
Also named as defendants in the suit are the couple's three children and seven companies owned by the family, including NFCorp.
They were accused of misappropriating and wrongly using RM118 million out of the RM250 million loan.
The government is also seeking a declaration from the court to have Salleh's family personally liable for the debt repayment, the RM118 million allegedly misappropriated from the loan and secret profits arising from it, as well as Putrajaya's entitlement to claim equitable title to the properties bought by the defendants using the misappropriated sum.
The case had been on hold since 2021 as parties were negotiating an out-of-court settlement.
Salleh was slated to take the stand in his defence in January this year, when both sides asked for an adjournment pending the settlement.
Ponnudurai had previously ordered for the trial to resume from Nov 7 to 11 as the parties had not come to a settlement.