October 31, 2013
MY COMMENT: This is a bizarre decision by the Judge. The first defendant in this case is Nor Mohamed Yakcop who was the person who negotiated with Halim Saad on the instructions of former Prime Minister (Tun) Dr. Mahathir Mohamad to enable Khazanah to restructure the Renong-UEM Group. There were exchanges of letters between the parties concerned. Otherwise, Halim would not have resorted to the courts for justice. He would not waste the court’s time if he did not feel that he had been fraudulently misled by Nor Mohamed. There was never any intention on the part of defendants to honour representations made to Halim. I hope Halim will not be discouraged from appealing against this court decision. –Din Merican
High Court throws out Halim’s RM1.8 billion suit
Halim, a former majority owner and executive chairperson of Renong, filed the suit against Khazanah Nasional Bhd, former Minister Nor Mohamed Yakcop and the government of Malaysia.
Khazanah Nasional is the strategic investment fund of the government entrusted to hold and manage its commercial assets. In making the decision, judge Hanipah Farikullah said there was no cause of action for Halim to file the suit.
“There was no fraud and fraudulent misrepresentation committed by the defendants. “The plaintiff (Halim) has been sleeping all these years and appeared suddenly have woken up by filing this action this year,” Justice Hanipah said.
She said this in her ruling that Halim had also filed his action out of time. The court found the agreement among the parties to have been made in 2003 and the action filed by Halim was way out of time of the six years that aggrieved parties have to file their cause of action.
With the suit being strucked out, the matter will not go to trial. Justice Hanipah also ordered Halim to pay costs of RM25,000 to former Minister in the Prime Minister’s Department Nor Mohamed and the government, and another RM25,000 to Khazanah Nasional.
The court made the decision today after hearing the application by the defendants to strike out the suit on the grounds it was filed out of time.
Lawyers Gopal Sreenevasan and Ranjit Singh appeared for Halim, while Nitin Nadkurni appeared for Khazanah Nasional and senior federal counsel Amarjeet Singh and Suzana Atan for Nor Moahmed and the government.
Once blue-eyed boy
Halim, once the blue-eyed boy in the corporate world like Tajudin Ramli who took over Malaysia Airlines, was brought in during the government’s privatisation programme in the 1990’s.
Renong has 100 percent ownership of Projek Lebuhraya Utara Selatan (Plus), Prolink Development Sdn Bhd and Putra LRT, and has substantial stakes in United Engineers (M) Bhd, Faber Group Bhd, Park May Bhd, Kinta Kellas PLC, Cement Industries (M) Bhd, Time Engineering, Time dotCom Bhd and Commerce Asset Holdings Bhd (now CIMB).
In his statement of claim dated April 17, 2013, Halim alleged there was a breach of the Renong purchase obligation where he held a majority stake, and Nor Mohamed, the government and Khazanah had committed fraud in having him relieved of the post.
He is seeking RM1.3 billion, general damages for breach of the Renong purchase obligation, another RM508 million being value of paid up capital of Kualiti Alam Sdn Bhd in settlement of Halim’s losses for rescuing Fleet Group and damages for fraudulent misrepresentation.
The statement of claim reflects the period of the Asian financial crisis of 1997 where on or about November 17, 1997, UEM announced it had acquired 722,882,000 shares in Renong. However, in January 1998, Halim acted in his personal capacity to purchase the Renong shares from UEM and paid the first installment under a ‘put option’ on Feb 14, 2001.
The first installment was funded through a financing facility.
Summoned to meet Mahathir
Halim claimed in July 2001, Mahathir summoned him to Putrajaya where the then-PM informed him that he should allow the government to take over his shares in Renong and UEM group and asked him to meet with Nor Mohamed, then his special economic adviser.
Halim said he met Nor Mohamed (right) on July 12, and the meeting was also attended by his lawyer Rashid Manaff. During the meeting, Nor Mohamed allegedly told him not to proceed with the put option and indicated that the government would purchase his shares in Renong and UEM.
He summarised these statements in a letter dated July 16, 2001 to Mahathir and wanted the Premier to reconsider his position.
Subsequent meetings were held and an agreement reached between Halim and Nor Mohamed on behalf of the government, where Khazanah as the acquirer would pay RM1.3 billion in cash and kind, purchase his 372 million shares in Renong for RM465 million and procure the transfer to Halim the entire equity of Kualiti Alam Sdn Bhd which is free of encumbrances worth RM508 million.
Halim claimed the terms were confirmed in a letter dated July 18, 2001 to Dr Mahathir. He further alleged a repayment agreement was reached orally between him and Nor Mohamed between July 2001 and June 2002.
He said Khazanah honoured the repayment agreement by paying RM165 million that includes compensation for his losses due to foreclosure of various assets pledged by him to various financiers following its initial takeover.
‘All UMNO’s assets’
“After receiving the RM165 million from Khazanah, I attended a meeting with Nor Mohamed at his office in Putrajaya, where Nor Mohamed orally agreed that the defendants would perform its obligations under the 2001 agreement.”
Halim claimed that between 2003 and 2010, he tried repeatedly to meet Nor Mohamed for him and the government to comply with the 2001 agreement, but was unsuccessful.
On April 23, 2010, Halim met Mahathir to seek a resolution of the matter but was informed by the former premier that he had been informed by Nor Mohamed that all along the assets that Khazanah were to take over were owned by UMNO.
“Mahathir said there was never any reason to pay me. Rashid was also present at the meeting. I contend that the said assets were never owned by UMNO. A meeting was arranged by Mahathir, I finally met Nor Mohamed at his office and was informed that there would not be any forthcoming payments for the reasons mentioned by Mahathir,” Halim claimed.
Halim claimed that he had been induced by Nor Mohamed as an agent representing the government for him to take up the deal for his exit from Renong and UEM. “These representations by Nor Mohamed were false in that the government and Khazanah never had any intention of entering into the 2001/or 2003 agreement to pay or perform,” he alleged in his statement.