(This article has been updated for accuracy.)
KUALA LUMPUR (Dec 5): Former minister Datuk Mohd Zaid Ibrahim made a mandatory divestment of his remaining 70% stake in law firm Messrs Zaid Ibrahim & Co which he founded, upon his appointment as Minister in the Prime Minister's Department for Legal Affairs and Judicial Reform, for an agreed total purchase price of RM25.65 million in March 2008.
Due to the purchase, the partners have the right to retain the firm's name, said the law firm's executive chairman and senior partner Datuk Seri Dr Nik Norzrul Thani N Hassan Thani. He added that Zaid has been appointed a consultant for the firm since 2018, and that if he wishes to use the name "Zaid Ibrahim", he could use other permutations like "Zaid Ibrahim & Associates" or "The Chambers of Zaid Ibrahim" as an alternative.
“When Zaid was appointed as a consultant in 2018 with a pay of RM20,000 a month, he never asserted any claim over equity, goodwill, name or interests in the firm."
In 2004, Zaid sold a 30% stake to nine lawyers in the firm, who subsequently became equity partners in Zaid Ibrahim & Co, for RM10.13 million. "[Former managing partner Chew Seng Kok] and I have made the payments regularly and promptly," said Nik Norzrul Thani, adding the sale resulted in the right to use the name Zaid Ibrahim & Co and its goodwill.
He added that a sales and purchase agreement was made to that effect, and as the incident took place 12 years ago, Zaid's claim now to acquire the rights to the name of the firm is "time barred".
Nik Norzrul Thani, 60, said this in his affidavit in support dated yesterday that was sighted by theedgemarkets.com, to strike out Zaid's law suit and also to stop an injunction from being imposed against the firm from retaining the use of Zaid Ibrahim & Co.
Chew is the managing director of ZICO Holdings Inc, which provides regional management services and business support services to members of the ZICO Law Network, of which Zaid Ibrahim & Co is a member, and to certain entities within the ZICO group. ZICO has no equity in the network, according to the law firm.
Malaysia practises a limitation on when a suit could be filed for consideration by the court. According to the Limitation Act 1953, a person could file a suit within six years of an event.
Nik Norzrul Thani said since Zaid left, the firm had grown by leaps and bounds, emerging as the largest law firm in Malaysia with close to 160 lawyers.
In addition, the firm has become the anchor firm of ZICO Law, a network of separate and independent law firms across 10 Asean countries, said the chairman.
“We are the first firm to have such extensive networking in all Asean countries. The goodwill of the firm cannot be attributed to Zaid, as the exponential growth took place since March 2008,” he said.
“It is fallacious for Zaid to allege misrepresentation by the firm, as the name Zaid Ibrahim & Co, whilst containing components of his name, does not represent him anymore. For 12 years, from 2008 to this year, he never asserted any claim or interests in the equity, goodwill, name or any part thereof of the firm,” he said.
He added that while Zaid was appointed as consultant for the firm, the former minister had requested that his name would not appear in the letterhead of the firm despite having re-joined the firm from July 2018 to October 2020, as he had harboured political ambitions under Pakatan Harapan.
While acknowledging letters from Zaid's solicitors seeking the return of the firm's name, Nik Norzrul Thani said the partners in the firm agreed to offer the former minister the chairmanship of the firm, but he did not sign any agreement.
He alleged that Zaid, while being chairman, had unilaterally ordered renovations to his office worth RM75,000 without any tender exercise, unilaterally approved withdrawals to himself to the amount of RM90,000, and had purportedly disrupted the proper administration of the firm and took steps to sow doubt about the character and integrity of the partners.
“Zaid carried out a divide and rule policy with some partners in order to cause split and dissension among the partners in the firm,” Nik Norzrul Thani claimed in the affidavit.
Following these breaches, the firm decided to terminate Zaid's chairmanship on Nov 11.
He further asserted that the firm did not breach the Legal Profession Act nor the Bar Council ruling no 2.01 in retaining the name.
“For the reasons cited above, I pray that the suit would be dismissed with costs,” Nik Norzrul Thani said.
In a tweet, the former minister denied he abused the company's funds by renovating his office.
"Abuse is not when you renovate a 500 sq foot room or agree to a salary higher than Nik Norzrul Thani.
"Abuse is when you allow the firm to be indebted close to RM90 million mostly to ZICO Holdings. That is abuse," Zaid tweeted.
On the striking out application by Nik Norzrul Thani, Zaid asked on what grounds did Messrs Tommy Thomas (the firm representing Zaid & Co) filed it for?
"Time bar. That's a big improvement. Earlier those who owe me money said: Nothing due or owing," he tweeted.
It is not certain as to what the RM90 million debt that Zaid was referring to.