This article first appeared in The Edge Malaysia Weekly on December 22, 2025 - December 28, 2025

FOURTEEN holders of the Sukuk Murabahah issued by MEX II Sdn Bhd (MEX II) have sought legal recourse against parties that they allege breached their statutory duties under the Capital Markets and Services Act 2007 (CMSA), resulting in a delay in the construction of the MEX II Highway.

According to the statement of claim filed on Dec 15 at the Kuala Lumpur High Court, the 14 sukuk holders, led by Credit Guarantee Corp Malaysia Bhd (CGC), have named 12 parties as defendants in the suit.

The 12 are MEX II; Maju Lingkaran Development Sdn Bhd; Maju Holdings Sdn Bhd; Tan Sri Abu Sahid Mohamed, his wife and son; Datuk Yap Wee Leong; CIMB Investment Bank Bhd, which is a wholly-owned unit of CIMB Group Holdings Bhd (KL:CIMB); engineering consultancy services company HSS Integrated Sdn Bhd, which is 30%-owned by HSS Engineers Bhd (KL:HSS); Crowe Malaysia PLT, TMF Trustees Malaysia Bhd and Straits Consulting Engineers Sdn Bhd.

MEX II, which is the MEX II Highway concessionaire, and Maju Lingkaran Development are both controlled by Maju Holdings.

CIMB Investment Bank is the lead arranger, lead manager, facility agent and principal adviser for the Sukuk Murabahah.

HSS is the consultant engineer for the construction of MEX II Highway while Straits Consulting Engineers is the appointed independent consulting engineer.

TMF Trustees is the sukuk trustee and security trustee of the RM1.3 billion in debt paper.

Holding about RM563.2 million or 43.33% of the highway operator’s RM1.3 billion Sukuk Murabahah, the 14 sukuk holders led by CGC include Amanah Raya Bhd, Syarikat Takaful Malaysia Keluarga Bhd, AHAM Asset Management Bhd and Opus Asset Management Sdn Bhd.

The statement of claim indicates that the sukuk holders hold between RM1.5 million or 0.12% of the total sukuk, as in the case of Zurich Takaful Malaysia Bhd, and RM142.2 million or 10.94%, as in the case of CGC.

It is noteworthy that the plaintiffs have appointed Tommy Thomas Advocates and Solicitors to act for them. The lead lawyer, former attorney-general Tan Sri Tommy Thomas, had in the past successfully handled two previous debt paper recovery cases, namely the Pesaka Astana and Aldwich bond disputes.

The MEX II sukuk was issued in 2016 for the construction of the 16.8km three-lane dual-carriageway connecting the Putrajaya Interchange of the MEX I Highway and KLIA/KLIA 2.

“Upon its completion, the MEX II Highway would have provided the shortest direct link between the commercial centre of Kuala Lumpur and the KLIA/KLIA 2 at Sepang,” the filing reads.

What is being sought by the plaintiffs, among others, is the “dissolution amount” of RM1.38 billion as at Jan 3, 2022 or an amount the court deems fit.

It is also understood that more sukuk holders are looking to jump on the bandwagon, but details are scarce as the ongoing talks are private.

“It was a matter of time before this (statement of claim) was filed. Some of the defendants mentioned had earlier tried to distance themselves from any wrongdoing, while for some of the others it looks bad, as the issues at MEX II could have been prevented,” says a source familiar with matters at MEX II, which is under receivership.

He adds, “It has always baffled me why the sukuk holders even bought MEX II’s debt paper. Perhaps this will shed some light on what transpired.”

Abu Sahid controls 91% of privately held Maju Holdings while his family members control the remaining 9%.

MEX II’s initial completion was intended to be in November 2018, but this was deferred to Oct 4, 2019. At present, a little more than 82.64% is completed, with RM449 million required to complete its construction. This figure was revealed by Works Minister Datuk Seri Alexander Nanta Linggi in parliament earlier this month, and was provided by the receivers and managers of MEX II, BDO Consulting, in November last year, based on their assessment of the remaining work.

Nevertheless, MEX II has been under receivership since May 2022 following a default on its sukuk payments, with delays said to be due to the Covid-19 pandemic and the ensuing lockdown.

Certain quarters familiar with Abu Sahid say MEX II had received a stop-work order from the government, which resulted in the delay, but this remains conjecture at press time.

Meanwhile, according to the statement of claim, the information memorandum (IM) pertaining to the then-proposed sukuk issue of RM1.3 billion also had a junior bond issue of RM150 million, and was prepared by CIMB Investment and MEX II, for investors to consider before they subscribed for the sukuk.

The statement of claim has it that the IM was relied upon by the plaintiffs in their purchase of MEX II’s sukuk. Also, the plaintiffs state that the IM constitutes a prospectus within the meaning of the CMSA, in which Section 248 entitles the sukuk holders to recover damages from all the parties named in the IM for any losses sustained as a result of any statements of information that were false or misleading.

According to the IM, MEX II was prohibited from opening any accounts other than four designated ones — a revenue account, a toll collection account, a financial services reserve account, all three of which TMF Trustees is the sole signatory, and an operations account, of which MEX II is the sole signatory. However, MEX II is alleged to have had non-designated accounts.

The IM represented that a total sum of RM1.65 billion would be injected into MEX II, which is 27.9% more than the fixed construction cost of RM1.29 billion to complete the MEX II Highway, with a buffer of RM360 million to pay for fees, expenses or all other amounts payable or related to the Sukuk Murabahah up to RM20 million, and to service the semi-annual periodic profit payments.

However, only a total of RM1.38 billion was paid into the revenue account. This comprised RM1.276 billion from the sukuk and RM80 million from the junior bonds. Shareholders’ advances of RM210 million and the increase in MEX II’s share capital by RM59.7million were not paid into the revenue account but were paid into a non-designated account, the statement of claim alleged.

“According to the IM, RM1.3 billion in proceeds ought to have been received by MEX II into the revenue account from the issuance of the sukuk. However, only RM1.276 billion was received into the revenue account on April 29, 2016. That meant a deficiency of RM23.28 million,” the statement of claim reads.

Of the RM150 million slated to be injected into the revenue account from the junior bond, only RM80 million was received, meaning there was a deficiency of RM70 million.

Also according to the IM, RM210 million was supposed to have been advanced into MEX II’s revenue account by its shareholder Maju Holdings but nothing was paid into it. Even the proceeds from MEX II’s share capital, which was increased by RM59.7 million from RM300,000 to RM60 million, were paid into a non-designated account, contrary to the representations in the IM.

Back-of-the-envelope calculations show a total shortfall exceeding RM500 million.

According to the statement of claim, in a meeting on Nov 24, 2020, between MEX II officials, its advisers and the sukuk holders, the cost of completion for MEX II was RM340.2 million, out of which variation work amounted to RM116.35 million, balance of work to RM180.21 million and rectification work to RM43.65 million.

Considering that variation work is borne by the government, the balance of work and rectification work amounting to RM223.86 million could have been met if the conditions in the IM were complied with, and MEX II could have been completed.

CIMB Investment, which is part of a large financial institution, will likely be a target of the plaintiff sukuk holders.

The statement of claim reads, “The plaintiffs contend that CIMB Investment, by assuming the roles of principal adviser, lead arranger, lead manager and facility agent for the sukuk and which arranged the primary subscription for the sukuk by a company within its group viz CIMB Bank Bhd, held itself out as an expert in the bond issuance industry and the Malaysian capital market.

“Therefore, in its overlapping roles, and the fact that it was party to the transaction documents, CIMB Investment accordingly had or ought to have had actual knowledge of the terms of the transaction documents.”

The plaintiffs say CIMB Investment owes a statutory and contractual duty of care to them in respect of the statements and terms of the IM, and had failed to ensure that Maju Holdings had paid the RM210 million shareholders’ advance into the revenue account prior to the sukuk issue. They say CIMB Investment had also failed to ensure that the RM150 million in junior bonds was paid into the revenue account, among others.

The case against the other defendants is largely along the same vein, that they did not discharge their statutory duties.

It is also noteworthy that in June this year, HSS Engineers denied any involvement in the drawdown of funds from the RM1.3 billion sukuk financing for MEX II when the investigation by the Malaysian Anti-Corruption Commission commenced.

While the legal wrangling continues, it is understood that two or three parties are looking to buy MEX II and MEX I — the former by the receivers and managers and the latter by Abu Sahid.

MEX I is said to rake in about RM1 million a day from its toll collection operations.

However, Abu Sahid is understood to drive a hard bargain.

The businessman, together with Maju Holdings’ former director Yap, have been charged with criminal breach of trust and money laundering involving the MEX II project, with the trials ongoing.

In September this year, Abu Sahid was charged with allegedly misappropriating over RM450 million, but he pleaded not guilty.

Yap, meanwhile, was charged with 17 counts of forgery involving RM314.5 million in false claims for the unfinished MEX II Highway, and he also pleaded not guilty to the charges. Yap is alleged to have used 13 fake progress claim documents and passed them off as genuine, and submitted them for work package claims, covering site clearance, temporary works, earthworks, geotechnical works, drainage and pavement works at designated sections of the expressway.

Abu Sahid has been looking to sell his highways for some time now.

Back in 2012, auto parts manufacturer EP Manufacturing Bhd (KL:EPMB) proposed to buy MEX I for RM1.2 billion, but the deal fell through, supposedly because there were issues with ownership as the government had provided RM976.6 million in the form of grants and other forms of assistance.

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