This article first appeared in The Edge Malaysia Weekly on April 27, 2026 - May 3, 2026

THE case brought by holders of the Sukuk Murabahah issued by highway operator MEX II Sdn Bhd against various parties, including MEX II, has taken another twist, with new reasons surfacing for the delay in the construction of the highway.

MEX II, which is now in receivership, is the MEX II Highway concessionaire and is wholly-owned by Maju Lingkaran Development Sdn Bhd, which in turn is wholly-owned by Maju Holdings Sdn Bhd, a company controlled by businessman Tan Sri Abu Sahid Mohamed.

The sukuk holders had on Dec 15, 2025 filed a suit against MEX II, Maju Lingkaran Development, Maju Holdings, Abu Sahid and other parties alleging that they had breached their statutory duties and caused a delay in the construction of the MEX II Highway.

In their defence and counterclaim filed with the courts, Abu Sahid and Maju Holdings claimed that on March 28, 2019, Jabatan Kerja Raya Daerah Sepang (JKR Sepang), under the Works Ministry, had issued a stop-work order, directing that work on the construction of the MEX II Highway be halted, which resulted in delays to its construction.

In court documents sighted by The Edge, Abu Sahid and Maju Holdings said, “The sudden issuance of the stop-work order constituted a supervening event not caused by any breach, default, negligence or omission on the part of MEX II and/or the defendants, and, accordingly, any delay, consequence or alleged loss arising therefrom cannot in law or fact be attributed to MEX II and/or the defendants.

“The defendants plead that the issuance of the stop-work order was an administrative and regulatory decision made solely by JKR Sepang in the exercise of its statutory powers, and was entirely beyond the control, authority or influence of MEX II and/or the defendants,” the documents read.

This contradicts the earlier perception that the RM1.3 billion in funds from the sukuk issued by MEX II had been squandered and thus Abu Sahid and Maju Holdings were cash-strapped to construct the highway, with the lockdown and Movement Control Order brought about by the Covid-19 pandemic exacerbating things.

Court documents indicate that on April 8, 2019, MEX II had requested JKR Sepang to issue the work permit for the construction of the MEX II Highway, which would have allowed construction to continue “but was repeatedly denied despite the numerous requests of MEX II and/or the third defendant (Maju Holdings)”.

“The defendants further state that at all material times prior to the issuance of the stop-work order, MEX II and/or the defendants, particularly the third defendant under the turnkey contract had been diligently carrying out the construction works,” the court documents read.

More details of the stop-work order, why it was issued and who sanctioned it are not available.

According to the court documents, MEX II Highway is 86% complete. However, last December, Works Minister Datuk Seri Alexander Nanta Linggi had said that according to the receivers and managers, MEX II would cost RM449 million to complete. Other sources and documents from other court cases involving MEX II, however, state that the highway is 82.64% complete.

It is noteworthy that MEX II has been under receivership since May 2022, after defaulting on its sukuk payments.

The sukuk holders include Credit Guarantee Corp Malaysia Bhd (CGC), AmanahRaya Bhd, Syarikat Takaful Malaysia Keluarga Bhd, Syarikat Takaful Malaysia Am Bhd, Zurich Life Insurance Malaysia Bhd, Zurich Takaful Malaysia Bhd, RHB Asset Management Sdn Bhd, RHB Islamic International Asset Management Bhd, Maybank Trustees Bhd, AmanahRaya Trustees Bhd, HSBC (M) Trustee Bhd, AHAM Asset Management Bhd, Aiman Asset Management Sdn Bhd and Opus Asset Management Sdn Bhd.

In their statement of defence and counterclaim, Abu Sahid and Maju Holdings say that on April 7, 2019, the Malaysian Highway Authority, after considering the circumstances surrounding the issuance of the stop-work order and recognising the likelihood of delays in the construction of the MEX II Highway, granted an extension of time of 274 days from the original completion date, thereby revising the completion date to July 4, 2020, and later further extending the completion date by 427 days to Sept 4, 2021, and again further revising the completion date to June 2, 2022.

The court documents state, “The defendants plead that the grant of such extension by the Malaysian Highway Authority constitutes a formal acknowledgment by the regulatory authority that the delay was not attributable to any breach, negligence, default or omission on the part of MEX II and/or the defendants, but arose solely due to the effect of the stop-work order issued by JKR Sepang.”

According to the court documents, MEX II and the Maju group were prevented from progressing on the construction because of the stop-work order.

Abu Sahid and Maju Holdings state that the successive extensions of time granted by the Malaysian Highway Authority “constitute further acknowledgment that the delays in completion were not attributable to any breach, neglect, default or omission on the part of MEX II and/or the defendants.”

The defendants also state that notwithstanding the extension of time granted by the Malaysian Highway Authority, the stop-work order remained in force and was not lifted.

To recap, MEX II was planned to be a 16.8km, three-lane dual carriageway, connecting the MEX Putrajaya Interchange on the 26km MEX I to the Kuala Lumpur International Airport. Construction commenced in 2016 and was initially targeted for completion in November 2018, but was deferred a number of times.

To finance the MEX II extension, the company had issued the RM1.3 billion Sukuk Murabahah but defaulted on the principal and profit payments in 2021, which resulted in MEX II being put under receivership a year later.

Abu Sahid and his wife meanwhile were charged after a high-profile investigation and slapped with money laundering and criminal breach of trust charges.

Abu Sahid’s wife was charged with receiving proceeds from unlawful activities amounting to RM67.14 million into her bank account, while Abu Sahid was charged with five counts of misappropriating more than RM458.5 million of company funds, and 10 charges of transferring proceeds from unlawful activities amounting to RM116.45 million from his account to five individuals and four construction companies. He has also been accused of disposing of proceeds from unlawful activities totalling RM22.8 million.

Ironically, last month, BDO Corporate Services PLT — the receiver and manager of MEX II — is understood to have reached out to potential buyers of the MEX II Highway concession, seeking proposals from them, including proposing the potential haircuts the sukuk holders will have to take, among others.

It is also understood that some of the sukuk holders are in talks with construction giant and highway concessionaire IJM Bhd (KL:IJM) but details are scarce.

In December last year, The Edge reported that a number of sukuk holders of MEX II led by CGC, which controls about RM563.2 million or 43.33% of the highway operator’s RM1.3 billion sukuk, had appointed law firm 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 debt paper recovery cases, involving Pesaka Astana and Aldwich bond disputes.

The sukuk holders are seeking legal recourse against parties that caused the delay in the construction of the highway, the consultants involved, and the entities tasked with ensuring proper governance, and transparency in the processes.

Other than Abu Sahid, Maju Holdings and other parties linked to him, CIMB Investment Bank Bhd — a wholly-owned unit of CIMB Group Holdings Bhd (KL:CIMB) and the lead arranger, lead manager, facility agent and principal adviser of the sukuk — was also named as a defendant. Others named as defendants include HSS Integrated Sdn Bhd, an engineering consultancy services company that is 30%-owned by HSS Engineers Bhd (KL:HSSEB); auditor Crowe Malaysia PLT; TMF Trustees Malaysia Bhd (part of the TMF group), an independent global service provider in the trust and fiduciary area and the sukuk trustee and security trustee of the RM1.3 billion in debt paper; and engineering technical advisory firm Straits Consulting Engineers Sdn Bhd, which was the appointed independent consulting engineer of the MEX II Highway.

The plaintiffs are seeking a dissolution amount of RM1.38 billion as at Jan 3, 2022, or an amount that the court deems fit.

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

Last December, rumours were rife that more sukuk holders would jump on the bandwagon in the suit against Abu Sahid, Maju Holdings and others.

According to the sukuk holders, the information memorandum (IM) touching on the proposed bond issue of RM1.3 billion in sukuk also had a junior bond issue of RM150 million and was “principally authored” by CIMB Investment and MEX II for investors to weigh before they purchased 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 Capital Markets and Services Act 2007 (CMSA), which states that 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 accounts — a revenue account, a toll collection account, a Financial Services Reserve Account, for all three of which TMF Trustees is the sole signatory, and an operations account for which MEX II is the sole signatory — but MEX II is said 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.

“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 RM1.28 billion was received in the revenue account on April 29, 2016. This 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 junior bonds, only RM80 million was received, meaning there was a deficiency of RM70 million.

According to the IM as well, RM210 million was supposed to have been advanced to MEX II by its shareholder Maju Holdings and injected into the revenue account. However, nothing was paid. 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 indicate a shortfall exceeding RM500 million.

CIMB Investment will likely be a target of the plaintiff sukuk holders, due to it being part of a large financial group.

In a nutshell, the plaintiff sukuk holders say CIMB Investment owed them a statutory and contractual duty of care in respect of the statements and terms of the IM but it had failed them by not ensuring that Maju Holdings had paid its dues.

The sukuk holders’ complaints against the other defendants are largely along the same line — that they did not discharge their statutory duty.

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