Friday 24 May 2024
main news image

KUALA LUMPUR (Oct 18): The federal government along with former prime minister Tun Dr Mahathir Mohamad and former minister Tan Sri Nor Mohamed Yakcop, in their defence to Tan Sri Halim Saad, have cited the businessman's latest legal action as time-barred, defective, and against the Public Authorities Protection Act 1948 (PAPA).

Halim’s claim is also seen to be prohibited under the principles of res judicata and estoppel.

Res judicata is a Latin term meaning a matter had been adjudicated or decided earlier by the same parties, as Halim had brought a similar action in 2013 against Nor Mohamed and others and failed all the way to the Federal Court.

In 2013, Halim had sued Nor Mohamed, Khazanah Nasional Bhd and the government for RM1.8 billion after alleging he was cheated in the deal. Halim fought till the apex court and lost in 2015.

Estoppel is a legal principle that bars a person from contradicting an action or statement made in the past.

The Attorney General's Chambers (AGC) in acting for the government, Dr Mahathir and Nor Mohamed said that Halim himself had agreed with Khazanah’s acquisition of his stakes in UEM Group Bhd, and on the compensation of RM165 million, which was paid in two tranches in 2003, namely RM45 million on May 22, 2003 and RM120 million on May 26, 2003.

“Hence the filing of this legal action by Halim is therefore denied as the defendants here stressed that the compensation of RM165 million paid by Khazanah Nasional is agreed [to] by Halim himself. Halim is bound by the agreed compensation, and hence there is no purported violation of his rights under Article 8 and 13 of the Federal Constitution,” the AGC said.

In his statement of claim filed on Aug 2, Halim filed the suit premised on his purported losses arising from the acquisition of the stakes in UEM by Khazanah. He alleged that he had suffered breach of constitutional rights under Article 8(1) and Articles 13(1)(2).

Article 8(1) of the Constitution stipulates that all persons are equal before the law, and entitled to the equal protection of the law while Article 13(1) stipulates no person shall be deprived of property save in accordance with the law and (2) no law shall provide for the compulsory acquisition or use of property without adequate compensation.

He claimed that the federal government had acted on Dr Mahathir and Nor Mohamed’s — in his capacity as special economic adviser to Dr Mahathir — instructions, and proceeded with the purchase of a 32.69% stake in Renong Bhd from UEM.

The defendants further denied that the government had forced Halim to sell his UEM stake.

Takeover was agreed by Halim himself and claim is time-barred

The AGC claimed that the takeover was agreed to by Halim himself for the compensated amount of RM165 million. The defendants further cited that the action is time-barred as under the Limitation Act 1953, any party filing actions of contract and tort and certain other actions, must do so within six years.

Besides this, the PAPA 1948 stipulates that any suit or action should be filed within 36 months (three years) of the act complained of.

The defence statement also said that the Renong-UEM companies were a big part of the then Kuala Lumpur Composite Index and as the performance of the Renong and UEM shares were weak and the price of its shares did not recover, it brought a negative impact on the share market as a whole.

“Under Halim’s control, the market capitalisation of the Renong Group had declined by 41% from RM7.2 billion in 1997 to RM4.2 billion in 2000. At the height of the Asian Financial Crisis of 1997/98, Renong have a debt of RM26 billion where 7% of those are to Malaysian banking system then.”

It said to further improve the situation, Dr Mahathir agreed to the proposal from Nor Mohamed that the best way was to restructure Renong and UEM. The idea was to make UEM private by making a general offer to all UEM shareholders.

“Dr Mahathir has given Nor (Mohamed) the mandate for the restructuring where Khazanah agreed to acquire UEM by making a general offer to the shareholders through Syarikat Danasaham Sdn Bhd. As Halim has controlling shares in Renong and owned a 37.92% holding in UEM, his support is needed to make the acquisition a success,” the defence statement said, adding that it resulted in the meeting on July 12, 2001.

UEM had increase in value since takeover

Nor Mohamed has outlined to Halim of his proposal to restructure UEM, and according to the defence, Nor Mohamed also told Halim that he does not have the mandate on the compensation and suggested that any request for compensation could be brought up with Dr Mahathir after the general offer was made.

The UEM general offer and its restructuring were done successfully and the market shares recovered.

“Through the acquisition of UEM by the government via Khazanah, the UEM group had expanded to become a RM17 billion conglomerate, a 31.2% value added since its takeover. The acquisition is done with Halim’s approval via his letter,” the defence added.

The defence further claimed that the UEM share prices owned by Halim do not portray UEM’s true value and this was due to weak control and governance of the company by Halim.

“The value of Renong and UEM shares owned by Halim acquired by Khazanah at the material time is an amount agreed between Halim, Dr Mahathir, Nor (Mohamed) and Khazanah at a sum of RM165 million,” the defence statement added.

The statement of defence further added that Halim is not entitled to seek the declaratory relief that he is seeking from Dr Mahathir and Nor Mohamed, and even if so the claim is against the Limitation Act.

“Furthermore, the defendants would like to further state there is no constitutional violation by the government and hence Halim is not entitled to the remedy that he is seeking,” the defence said, adding they hope Halim’s claim would be dismissed with costs.

Halim claimed that as a result of the government’s actions, he had suffered financial losses, and this constituted a breach of his rights under Article 8 and 13 of the Constitution.

The case has been fixed for case management on Friday (Nov 20).

Edited ByKamarul Azhar Azmi
      Text Size