KUALA LUMPUR (Aug 10): Chief executive officer of railtrack solutions provider Emrail Sdn Bhd Amrish Hari Narayan admitted that the company has not repaid the outstanding amount of RM34.2 million from a RM320 million financing facility granted by Kuwait Finance House (KFH) to Emrail.  

While being cross-examined at the High Court here on Thursday (Aug 10), KFH lawyers Datuk Firoz Hussein Ahmad Jamaluddin, Wafiy Azman and Datuk Syed Faisal asked Amrish about the payments.

Firoz referred to the statement of facts filed in court, which mentioned that Emrail had proposed to KFH that it repays the outstanding amount with proceeds from the Light Rail Transit Line 3 (LRT3)  project.

Amrish replied that while Emrail had received payments from the project delivery partner for the project, it had not made any principal or profit payment towards the RM34.2 million owed to date.

Firoz then asked him whether late payments and other amounts remain due, to which Amrish answered in the affirmative. 

Amrish was testifying at the High Court here on Thursday (Aug 10) in Emrail’s suit against KFH for its alleged failure to issue a compliant performance bond for the project, which was awarded to the company by MRCB George Kent Sdn Bhd in 2017.

According to details of Emrail's suit, Prasarana had stipulated that Emrail must submit a “performance bond” for almost RM40 million in favour of Prasarana and MRCB George Kent, upon undertaking the contract worth RM738 million.

In January 2018, KFH granted Emrail a financing facility of up to RM320 million, which included the Murabahah Tawarruq General Working Capital Financing and Kafalah Bank Guarantee (KBG) to part finance Emrail's working capital and other requirements as the contractor of the works package.

Emrail alleged that KFH would have to issue a compliant performance bond as requested by Emrail and as required by MRCB George Kent and Prasarana which guarantees due performance of work as stipulated in the contract between Prasarana and Emrail.

Emrail further claimed that a compliant performance bond was crucial to the project as it served as a prerequisite for the project, and MRCB George Kent and Prasarana were entitled to terminate the contract if a compliant performance bond was not provided.

However, in its statement of defence, KFH stated that it was under no obligation to issue the performance bond based on the format requested, and that it was not part of the terms under the Kafalah Bank Guarantee Agreement.

KFH also said it would be contrary to Shariah laws if it issued the performance bonds based on the format requested by Emrail and MRCB George Kent, given that the performance bond made reference to an agreement that has not been executed and dated.

Amrish had previously testified that its other shareholders in the company are Tan Sri Hari Narayanan and former Chief Justice of Malaysia Tun Zaki Azmi, who are also plaintiffs in this case.

He also said that after the 14th General Election in 2018, Emrail was asked by the government, via Prasarana, to cut the RM738 million cost of the project to RM575 million.

In August 2019, MRCB George Kent terminated the LRT3 contract given to Emrail.

Emrail and Amrish is represented by Shaarvin Raj, Craig Ho, Louise Azmi and Ravvenneah Kalisvaran. 

The trial will continue on October 2 with Amrish on the stand.