This article first appeared in The Edge Malaysia Weekly on February 8, 2021 - February 14, 2021

WHAT’s in a name? William Shakespeare asked.

For former de facto law minister Datuk Mohd Zaid Ibrahim and his former law firm, Zaid Ibrahim & Co, it means everything, as the law firm — now one of the largest in the country — is already a familiar name and brand.

For the two parties, it also means who owns the remaining 5% stake in the firm and the balance of the sale of Zaid’s shares amounting to a total of RM25.65 million, following his appointment as a minister in 2008.

As has been reported, a legal battle is looming between Zaid and the firm he founded in the late 1980s. Open conflicts at law firms are not entirely new. The latest occurred early last year at Lee Hishammuddin Allen & Gledhill, and ended in five of its partners leaving and establishing a new legal entity.

However, in the current imbroglio between Zaid and his former firm, the founder is going against the firm he formed. Last November, 69-year-old Zaid sued Zaid Ibrahim & Co after he was removed as chairman nine days after he was appointed to the position.

The former Kota Bharu member of parliament is seeking an injunction against the firm to bar it from using his name “Zaid Ibrahim” in any form or style, and for an order of delivery of materials such as letterheads, brochures, notepaper, invoices and other items it used.

He is further seeking an assessment of damages for the wrongful use of his name and costs of the action and other relief deemed fit by the court.

While the suit stems from his wanting a return of his name, a check by The Edge based on court documents — the case has yet to go on trial — revealed the conflict is also over his remaining 5% stake at the firm and the balance of the sale of his shares amounting to a total of RM25.65 million, following his appointment as a minister in 2008.

Under a sales and purchase agreement (SPA) drawn up in 2008 between Zaid, Zaid Ibrahim & Co former managing partner Chew Seng Kok and the firm’s chairman Datuk Seri Nik Norzrul Thani Nik Hassan Thani, Zaid was to receive 20 annual instalments of RM1.2 million and a final payment of RM1.65 million, following his disposal of a 57% stake in the firm after he was made a minister by then prime minister Tun Abdullah Ahmad Badawi.

Payments allegedly stopped in 2014 — the year Zaid and Chew purportedly agreed that the remaining payments would be converted into a 10% holding in Singapore-based Zico Holdings Ltd, which is listed in the city state. In its affidavit, the company denies the contention. As part of the agreement, Chew was to become the managing director of Zico Holdings.

Zico Holdings, as stipulated on its website, is an integrated network of professional service firms focused on the Asean region, providing advisory and transactional services, management and support services and licensing services. It includes Zico Advisory, Zico Asset Management, Zico Capital and nine other entities besides running legal services through Zico Law, which in 2003 became the first law firm to expand out of Malaysia to all 10 Asean countries.

To support his suit, Zaid filed a discovery application in December to obtain documents from the law firm.

In an affidavit in reply to oppose Zaid’s discovery application, however, Chew denied that the remaining payment due to the former minister was to be converted into a 10% stake in Zico Holdings. He described the claim to be “totally untrue and is denied”.

“Zaid also never registered himself as [a] Zico Holdings shareholder,” the company’s managing director said in his Jan 8 affidavit, adding that, since the company’s formation on Nov 11, 2014, it had never declared any dividends.

On Zaid’s claim that his stake in Zico Holdings is said to be worth S$4 million (RM12.17 million), Chew said it was an estimate by financial experts to facilitate the former minister’s loan application to purchase a property.

In reply to Chew’s denial dated Jan 26, Zaid maintained that the sales proceeds of the 2008 transfer were not paid in full to him despite payments that were last received in 2014.

“To address the balance of payment due to me from both of them, Chew arranged for me to beneficially own shareholdings of Zico Holdings that he held as trustee. In this regard, Chew signed an agreement confirming that he held the shares in Zico Holdings in trust for me,” Zaid said, in reference to an agreement between Chew and himself in May 2014 ahead of the planned listing of Zico Holdings.

Zaid said he had repeatedly asked Chew to provide him with what was due to him from Zico Holdings but that the managing director had been evasive.

Zaid also produced the agreement that he signed with Chew dated May 27, 2014, which stipulated the 10% stake in Zico Holdings belonged to Zaid, and that he be guaranteed a minimum payment of RM1 million annually in two tranches. The agreement also stated that Zaid’s wife, Datin Suliana Shamsuddin, would be his beneficiary in the event of his death.

Following a file search of the case, The Edge was able to gain sight of the agreement between Zaid and Chew. In the discovery application, Zaid said that, since 2014, he had not received any payment in relation to what was owed to him, and that he was also unable to register as a shareholder of Zico Holdings, as Chew was holding all the relevant documents.

“The documents are readily available to Chew, who has power over them to give the disclosure. There should be no objection from him in the circumstances to provide the documents,” his affidavit in reply states.

“Chew never gave me an account of my beneficial interests in the shares or made any payment to me for the shares. Chew now admits that the financial experts themselves valued my beneficial interests in excess of S$4 million.

“It is for this reason that I verily believe that Chew is seeking to engage in subterfuge in creating such smoke and mirrors. He has not given a pointed answer as to what has happened to my beneficial shareholding in Zico Holdings. That is the basis for my intended claim against Chew to seek an account from him as my trustee,” he alleges further in the dispute.

Zaid said he also needed the documents to commence his suit against his former law firm.

In the November suit against Zaid Ibrahim & Co, the former minister claimed the firm represents him in its practice by continuing to use his name and that the wrongful use of his name deprives him of using his own name to set up his own law firm.

He further claimed that, as a result of this, he would face the prospect of suffering substantial damage in not being able to use his name in continuing his law practice.

“The firm has also breached the Bar Council Ruling 2.01 that states that when a partnership has [been] dissolved, no partner may continue to practise under the name of the dissolved firm name unless the partners of the dissolved firm so consent, subject, however, to any provision to the contrary in the partnership agreement governing the partners of the dissolved firm. This rule does not apply to the death of a partner.”

Zaid also claimed that his termination as the firm’s chairman after nine days for alleged “unauthorised acts” — done unilaterally without other partners knowing — was not specified to him.

When met, Zaid told The Edge that the Bar, which is the supervising body for lawyers, should enforce the rules that it drafted and not allow firms to get away with it.

“It is for this reason the suit is filed, as I want to get what is rightfully mine,” he said, adding there is also a question of whether it was right for Zaid Ibrahim & Co’s financial accounts to be done by Zico Holdings in Singapore, another practice that may go against the Bar’s regulations.

“I left my lifetime work and wealth in search of solutions for the betterment of the country. That’s what my politics was about. Looks like I lost both,” he added.

Chew and Nik Norzrul Thani have yet to reply to Zaid’s Jan 29 affidavit in relation to his discovery application, but are likely to do so in the coming weeks.

Zaid has engaged the firm of Messrs Suflan TH Liew as its solicitors, while Zaid Ibrahim & Co has hired the firm of Tommy Thomas and the former attorney-general to represent them.

No dates have been fixed for the hearing of the suit or the discovery application. Case management of the discovery application was held before High Court deputy registrar Maslinda Selamat on Jan 29. A further case management date for the discovery application has been fixed for Feb 24 while a case management for the suit has been fixed for Feb 26.

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