KUALA LUMPUR (Oct 13): After a High Court trial of almost three years, the government’s civil suit against the National Feedlot Corporation Sdn Bhd (NFCorp) and 10 other defendants has come to an end.

On Friday, Judicial Commissioner Anand Ponnudurai gave his decision that the defendants — NFCorp, its chairman Datuk Seri Dr Mohamad Salleh Ismail and nine others — would have to pay approximately RM33.7 million to the government for the failed National Feedlot Cattle programme.

He also ordered the defendants to return land in Gemas, Negeri Sembilan, in Putrajaya and properties at One Menerung Bangsar in Kuala Lumpur to the government, which is the beneficial owner of these properties.

However, Anand stated that it was not unlawful for the defendants to utilise part of the loan sum to invest in properties in the name of the company. In this regard, NFCorp was not in default of the loan agreement and the implementation agreement.

Labelling the case a “debacle”, Anand additionally invoked the decision to terminate the entire project. This means that the NFC project is officially terminated.

Although this civil suit was for RM250 million, Anand did not award the government the full amount it was claiming.

The RM33.7 million comprises the balance from the RM250 million which was not utilised.  

Anand additionally ruled that the government was also entitled to RM86.9 million that it had previously seized from the defendants, which is currently held in escrow by the Accountant General.

The government had been seeking RM253.62 million, which included accrued annual interest of 2% from May 1, 2019.

Salleh and the others were accused of misappropriating RM118 million from a RM250 million loan granted to NFCorp by the government in December 2007 to set up and operate a national feedlot centre (NFC) in Gemas, Negeri Sembilan.

Salleh is the husband of former women, family and community development minister Tan Sri Shahrizat Abdul Jalil.

Apart from Salleh and NFCorp, the other defendants are the couple’s three children Wan Shahinur Izran, Wan Shahinur Izmir and Wan Izzana Fatimah Zabedah, as well as six other companies owned by the family.

The RM250 million loan agreement was signed on Dec 6, 2007 between the government and NFCorp for the financing of costs to establish and operate the NFC in Gemas, as part of a government policy to develop and increase beef production for local consumption.

Both parties in the suit had previously agreed that the project had failed. However, the government claimed the family had misappropriated and wrongly used RM118 million of the government's RM250 million loan.

Salleh and his children claimed that the government reneged on the contract, which caused them to fail. They claimed that the government did not hold up its end in the contract to build an export quality abattoir (EQA), which is why they were not able to repay the RM250 million, as they could not meet production targets.

On this, Anand allowed the counterclaim by Salleh, NFCorp and the nine others, as he found that the government had breached the implementation agreement when they failed to construct the EQA, and had breached the loan agreement when the government unlawfully terminated it. As such, he awarded RM10,000 to the defendants.

As a result of the government not building the EQA, the project targets were not met. And because the project targets had not been met, the judge decided that NFCorp had to return the unutilised loan sum in the amount of RM33.7 million to the government.

The trial had been stalled on a number of occasions as parties tried to come to an out-of-court settlement.

The Edge reported in January 2022 that the parties were negotiating a settlement. The trial, which at the time was at its midway point, had been put on hold since then, pending the outcome of the settlement.

However, in October, 2022, the parties informed Anand that a settlement had not been reached between them.

The judge then ordered the trial to resume, with Salleh taking the stand in November 2022.

His three children, Wan Shahinur Izran, Wan Shahinur Izmir and Wan Izzana Fatimah Zabeddah had taken the stand as the defence’s last witnesses in the suit in March this year.

The lawyers representing the defendants were Datuk Seri Rajan Navaratnam and Datuk K Kirubakaran.

The government, meanwhile, was represented by senior federal counsel Azliza Ali.

Note: This story originally stated that the sum awarded to the government was RM120.6 million. After clarification from both parties involved, the sum awarded is actually RM33.7 million, while the remainder RM86.9 million had previously been seized by the government.