PUTRAJAYA (Aug 17): The Court of Appeal has upheld the High Court’s decision two years ago, which found former Mara Corporation Sdn Bhd chief executive officer Datuk Badlisyah Abdul Ghani breached his fiduciary and contractual duties by acting outside his authority in hiring senior personnel without board approval, and ordered him to pay over RM3.4 million in damages to the company.
COA judge Datuk Ahmad Kamal Md Shahid, who wrote the unanimous decision, said that this case does not warrant any appellate interference, as the High Court judge had correctly allowed Mara Corp’s claim after evaluating the contemporaneous documents and oral evidence of the witnesses.
“Quite clearly, the outcome of this case turned primarily on findings of fact. In our view, based on the evidence led during the trial, it cannot be said that the learned High Court judge’s conclusion upon the evidence was wrong.
“Although the appellant (Badlisyah) criticised the High Court judge’s approach and reasoning, we are not persuaded that the learned judge’s approach was erroneous, the reasoning flawed, or the conclusions wrong,” Ahmad Kamal said in his 30-page written grounds.
The three-member bench was led by Datuk Wong Kian Kheong, with Ahmad Kamal and Datuk Ahmad Fairuz Zainol Abidin in the unanimous decision.
Ahmad Kamal said that Badlisyah, as the group CEO, should have ensured that accurate, timely, and clear information is provided to members of the Board Nomination and Remuneration Committee (BNRC) and its committees to enable them to discharge their duties.
“The failure to inform the members of the BNRC accurately on Nov 2, 2020 as to the status of these individuals (hired) is evidence to the court that Badlisyah did mislead the members of the BNRC.
“Considering the above, we are in consensus that the learned High Court judge did not err in his findings that Badlisyah had misrepresented Mara Corp’s board of directors (BOD) during the BNRC meeting, and this finding warrants no appellate interference,” the COA judge said.
Badlisyah not represented
Badlisyah, who represented himself in the appeal, was also ordered to pay RM50,000 costs. Counsel Hoi Jack S’ng, Chng Keng Lung, Irene Wong Oi Ling, and Sarah Tham Yue Hui of Messrs Lee Hishammuddin Allen & Gledhill appeared for Mara Corp.
At the High Court, he was previously represented by Messrs Zul Rafique & Partners.
The written judgement by Ahmad Kamal was put out last week, while the judgement was delivered earlier on Aug 3.
On May 20, 2024, High Court judge Datuk Mohd Arief Emran Arifin ordered Badlisyah to pay the sum and found him liable for the breaches.
Mara Corp filed the suit in 2021 for purported breach of contractual, fiduciary, and statutory duties, resulting in losses of approximately RM21 million.
The High Court found Badlisyah liable for part of Mara Corp's claim and ordered him to pay RM2.728 million and RM739,541.60 to indemnify the company.
Mara Corp alleges that Badlisyah was required to act within the authority limits set by its BOD, abide by company policies, and act in Mara Corp's best interests.
He is alleged to have hired 25 employees (including 12 in senior director positions) without BOD approval, exceeding his authority and the approved budget.
The annual cost of these hires was RM9.4 million, far above the 2020 budget of RM1.799 million, causing a 156% variance in administration staff expenses and contributing to Mara Corp's financial losses.