The written judgment of Gopal Sri Ram in Fawziah v Metramac contains substantial issues which should be analyzed and pondered to have insights to the entrepreneurailship of the unincorporated Nexus of Malaysian Cabinet & Ministers Incorporated Unlimited.
The analysis are derived from the two pieces of news published in the NST today, that is:
Halim, Anuar had patronage of Daim, says judge
Abstract from the case:
Judge Gopal Sri Ram noted that STKG was between a rock and a hard place. It had spent large sums of money on the project and now found "itself with the ground cut from under its feet because of DBKL’s termination of the first concession agreement".
"No one in his or her right mind will consider the choice of selling their shares to Metro Juara at RM97.5 million as a choice at all. All the independent evidence on record points to this being in reality a crude case of economic duress presenting itself in a more subtle form."
The offer by UEM to buy out STKG’s shares for RM97.5 milllion simply did not make any commercial sense. "Here you have a company that has just had its loan and shareholders capital wiped out in one stroke. It had no money in the coffers. It had huge debts. It had no prospects of receiving any compensation from DBKL. So why pay RM97.5 million for the shares of such a company.
"The answer is simple enough. Anuar and Halim had something which the plaintiff did not. And that was the patronage of Daim," he said, adding that the events leading to the takeover bears this out.
The takeover of STKG by Metro Juara was also a rushed transaction. "There was no examination of the defendant’s books. No warranties were asked or given. No due diligence exercise was ever carried out." The takeover was executed on Jan 23, 1991.
"Not long after the takeover, a strange thing happened. Where doors were once closed to the defendant before its takeover, as if by the utterance of a magic spell, all bureaucratic doors were opened to the defendant after its takeover by Metro Juara. And as if by the rub of a magic lamp, the Federal Government and DBKL, who hitherto, claimed to be impoverished, suddenly found themselves flush with funds.
"They (Federal government & DBKL) were now in a financial position to compensate the defendant. The figures are staggering. In one way or another, the defendant was to receive a total sum of RM756.7 million," he said.
'They took RM32m'
Abstract of the Case:
Prominent businessmen Datuk Halim Saad and Anuar Othman siphoned RM32.5 million from a toll operator. By doing so, they could have been flirting with an aggravated form of criminal breach of trust, an offence which carries a maximum 20-year jail term with whipping and fine upon conviction.
The then Finance Minister Tun Daim Zainuddin told the shareholders that the Government did not have money to compensate them.
STKG was then bought over by Metro Juara for RM97.5 million. Halim and Anuar were the shareholders of Metro Juara. After this transaction, the Federal Government suddenly found the funds to compensate Metro Juara, or Metramac as it was known then.
Sri Ram said: "You may well ask how all this could have happened without the direct involvement of Tun Daim. It is also incomprehensible why the defendant, as it was constituted immediately before the takeover by Metro Juara, was not given this same financial support by the Federal Government."
He noted that at least two of the pre-takeover shareholders were either Government concerns or Government-assisted concerns. "I think that it is a fair question to ask why taxpayers’ money was channelled into the hands of two private individuals — to profit them — instead of a wider section of the general public.
"It is not at all clear why the Minister of Finance used his power to favour Anuar Othman and Datuk Halim Saad."
For completeness, Sri Ram noted that Halim and Anuar had siphoned from the defendant’s account RM32.5 million.
He said that he had asked the lawyer representing the company how this could have happened.
"His reply was stupefying," Sri Ram said in his 52-page judgment.
The judge said the counsel had submitted that Anuar and Halim, as shareholders paid this sum into Metramac’s account and were now reimbursing themselves.
"This answer overlooks the most elementary principle of company law," Sri Ram said, adding that shareholders of a company had no interest, legal or equitable, in the assets of their company.
He said it was clearly wrong to treat even a private limited company with only two shareholders any different from any other company.
Sri Ram said an intentional misappropriation of such a company’s property, moveable or immoveable was a criminal breach of trust.
He added if the misappropriation was done by directors as was the case here, it was an aggravated form of CBT.
"I must therefore be forgiven if I were to look askance at the counsel’s rationale for what was done in this case," he said.
ANALYTICAL POSERS:
The Finance Minister is said to have played a leading role to deny/defraud Fawziah her legal and equitable rights and privileges by misrepresenting facts in the first instance and upon the disposal of Fawziah's stake in STKG to Halim and Anuar, SUDDENLY, the heaven's door open and the government found the money to compensate the concessionaire Metramac.
Mahathir was the then Prime Minister. The Finance Minister is appointed by him to control the coffers. Could he stand up and explain? Would Daim be asked to explain?
The judge pronounced that this case involved an aggravated form of Criminal Breach of Trust (CBT). The issue is criminal in nature and of the highest degree involving commercial cases. Would the AG be prepared to open the Pandora Box?
What is Fawziah's relationship with Diam? Was she a proxy and later fall-out with her king-maker? How the world did she gets RM65million to fund her investment in Syarikat Teratai KG Sdn Bhd (STKG)?
It looks like Diam is involved and has equitable co-ownership in almost every mega project awarded by the government during the Mahathir regime. Can Mahathir provide insight to the power-play system of commercialism and ministerial entrepreneurship?
Fundamentally, it can be asked if in fact the whole system of government was entirely based on kleptorism, creatively crafted into a "Win-Win" situation for the Unincorporated Charitable Ministerial Incorporated Unlimited?
The analysis are derived from the two pieces of news published in the NST today, that is:
Halim, Anuar had patronage of Daim, says judge
Abstract from the case:
Judge Gopal Sri Ram noted that STKG was between a rock and a hard place. It had spent large sums of money on the project and now found "itself with the ground cut from under its feet because of DBKL’s termination of the first concession agreement".
"No one in his or her right mind will consider the choice of selling their shares to Metro Juara at RM97.5 million as a choice at all. All the independent evidence on record points to this being in reality a crude case of economic duress presenting itself in a more subtle form."
The offer by UEM to buy out STKG’s shares for RM97.5 milllion simply did not make any commercial sense. "Here you have a company that has just had its loan and shareholders capital wiped out in one stroke. It had no money in the coffers. It had huge debts. It had no prospects of receiving any compensation from DBKL. So why pay RM97.5 million for the shares of such a company.
"The answer is simple enough. Anuar and Halim had something which the plaintiff did not. And that was the patronage of Daim," he said, adding that the events leading to the takeover bears this out.The takeover of STKG by Metro Juara was also a rushed transaction. "There was no examination of the defendant’s books. No warranties were asked or given. No due diligence exercise was ever carried out." The takeover was executed on Jan 23, 1991.
"Not long after the takeover, a strange thing happened. Where doors were once closed to the defendant before its takeover, as if by the utterance of a magic spell, all bureaucratic doors were opened to the defendant after its takeover by Metro Juara. And as if by the rub of a magic lamp, the Federal Government and DBKL, who hitherto, claimed to be impoverished, suddenly found themselves flush with funds.
"They (Federal government & DBKL) were now in a financial position to compensate the defendant. The figures are staggering. In one way or another, the defendant was to receive a total sum of RM756.7 million," he said.
'They took RM32m'
Abstract of the Case:
Prominent businessmen Datuk Halim Saad and Anuar Othman siphoned RM32.5 million from a toll operator. By doing so, they could have been flirting with an aggravated form of criminal breach of trust, an offence which carries a maximum 20-year jail term with whipping and fine upon conviction.
The then Finance Minister Tun Daim Zainuddin told the shareholders that the Government did not have money to compensate them.
STKG was then bought over by Metro Juara for RM97.5 million. Halim and Anuar were the shareholders of Metro Juara. After this transaction, the Federal Government suddenly found the funds to compensate Metro Juara, or Metramac as it was known then.
Sri Ram said: "You may well ask how all this could have happened without the direct involvement of Tun Daim. It is also incomprehensible why the defendant, as it was constituted immediately before the takeover by Metro Juara, was not given this same financial support by the Federal Government."
He noted that at least two of the pre-takeover shareholders were either Government concerns or Government-assisted concerns. "I think that it is a fair question to ask why taxpayers’ money was channelled into the hands of two private individuals — to profit them — instead of a wider section of the general public.
"It is not at all clear why the Minister of Finance used his power to favour Anuar Othman and Datuk Halim Saad."
For completeness, Sri Ram noted that Halim and Anuar had siphoned from the defendant’s account RM32.5 million.
He said that he had asked the lawyer representing the company how this could have happened.
"His reply was stupefying," Sri Ram said in his 52-page judgment.
The judge said the counsel had submitted that Anuar and Halim, as shareholders paid this sum into Metramac’s account and were now reimbursing themselves.
"This answer overlooks the most elementary principle of company law," Sri Ram said, adding that shareholders of a company had no interest, legal or equitable, in the assets of their company.
He said it was clearly wrong to treat even a private limited company with only two shareholders any different from any other company.
Sri Ram said an intentional misappropriation of such a company’s property, moveable or immoveable was a criminal breach of trust.
He added if the misappropriation was done by directors as was the case here, it was an aggravated form of CBT.
"I must therefore be forgiven if I were to look askance at the counsel’s rationale for what was done in this case," he said.
ANALYTICAL POSERS:
The Finance Minister is said to have played a leading role to deny/defraud Fawziah her legal and equitable rights and privileges by misrepresenting facts in the first instance and upon the disposal of Fawziah's stake in STKG to Halim and Anuar, SUDDENLY, the heaven's door open and the government found the money to compensate the concessionaire Metramac.
Mahathir was the then Prime Minister. The Finance Minister is appointed by him to control the coffers. Could he stand up and explain? Would Daim be asked to explain?
The judge pronounced that this case involved an aggravated form of Criminal Breach of Trust (CBT). The issue is criminal in nature and of the highest degree involving commercial cases. Would the AG be prepared to open the Pandora Box?
What is Fawziah's relationship with Diam? Was she a proxy and later fall-out with her king-maker? How the world did she gets RM65million to fund her investment in Syarikat Teratai KG Sdn Bhd (STKG)?
It looks like Diam is involved and has equitable co-ownership in almost every mega project awarded by the government during the Mahathir regime. Can Mahathir provide insight to the power-play system of commercialism and ministerial entrepreneurship?
Fundamentally, it can be asked if in fact the whole system of government was entirely based on kleptorism, creatively crafted into a "Win-Win" situation for the Unincorporated Charitable Ministerial Incorporated Unlimited?
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