PUTRAJAYA (Nov 17): Tan Sri Halim Saad has lost his appeal and must pay RM62.03 million to Amanah International Finance Sdn Bhd (AIF) after the Court of Appeal upheld a High Court ruling over his duty to repay the use of an RM80 million Islamic financing facility meant for buying Shariah-compliant shares.

A three-member Court of Appeal panel led by Datuk Hashim Hamzah dismissed the appeals by Halim and his company Hektar Premier Sdn Bhd last week, confirming the High Court’s 2024 decision.

In 2024, the High Court ordered Halim to repay RM62.03 million of the 2015 facility, and dismissed his counterclaim, in which he alleged AIF’s former CEO, Datuk Razali Rahim, misled him into buying Efogen Sdn Bhd shares. In the counterclaim Halim wanted the RM20.25 million used to buy the Efogen shares to be refunded to him. AIF is a member of MBSB Group.

According to the 39-page written grounds sighted by The Edge, Halim argued that AIF should be responsible for ensuring the financing was used only for Shariah-compliant investments, and therefore claimed the facility agreement should be void. 

However, Justice Datuk Wong Kian Kheong, in writing the unanimous decision, rejected this. He said Halim — and not AIF — had the contractual duty to ensure compliance, and that allowing Halim to escape repayment would give him an “unjustifiable windfall” of over RM60 million. 

“Such an outcome is grossly disproportionate to the breach of Shariah principles,” he said. Datuk Ismail Brahim sat with Hashim and Wong.

Wong said the court could not rely on Halim’s claims that AIF misled him, and the court could not draw any negative inference just because Razali didn’t testify. He noted that Halim could have subpoenaed Razali himself. 

“Halim could not rely on the alleged misrepresentation (by AIF) in this case, and even if Razali was not a material witness in this case, it is trite law that an adverse inference can only be drawn under the Evidence Act against a party for suppressing material evidence in a case.

“There was no reason why Halim could not apply for a court subpoena to compel Razali to give evidence at the trial. Furthermore, Halim had defaulted with regard to the facility agreement and hence there was a debt due and owing from Halim to AIF and that AIF is entitled to claim against Hektar as it was not premature.”

The Court of Appeal dismissed both appeals and ordered Halim to pay RM40,000 in costs to AIF, while Hektar must pay RM20,000.

Halim and Hektar were represented by Kalearasu Veloo and team, while AIF was represented by Datuk David Morais, Pavitra Pillai and Shaikh Abd Saleem.

The RM80 million Islamic facility was offered to Halim in 2015 under the Tawarruq concept, with two drawdowns used to buy Sumatec Resources Bhd’s shares and 20 million Efogen Sdn Bhd shares. The second purchase was made through Halim’s nominee, Abu Talib Abdul Rahman.

On Jan 26, 2017, AIF and Hektar Premier, a company controlled by Halim had agreed to enter into an “Assignment of Surplus Sale Proceeds”, where among others, Hektar Premier agreed to pay and discharge any amount due and owing by Halim to AIF.

Following the non-payment, AIF filed two suits in 2018, one against Halim and the other against Hektar Premier to recover the amount for breach of the facility agreement signed in 2015.