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Media Statement (1)
by Lim Kit Siang  
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(Parliament, Saturday): The Court of Appeal judgment on the Metramac Cheras Toll concession case on Thursday has raised grave questions of integrity about the conduct of Tun Daim Zainuddin when he was Finance Minister in 1991 involving a RM764 million “patronage” to his two protégés, Datuk Halim Saad and Anuar Othman, which should be the top agenda of the first meeting of the Parliamentary Select Committee on Integrity on Monday.

The RM764 million Daim “patronage” should be the first case study of the Parliamentary Select Committee on Integrity in keeping with its terms of reference focusing on ethics and integrity in the public service and society, including proposals for amendments to laws and regulations and actions to be taken by the relevant authorities

The Parliamentary Select Committee on Integrity, which was established by a resolution of the Dewan Rakyat on December 8, 2005, is chaired by Tan Sri Bernard Giluk Dompok, Minister in the Prime Minister’s Department. Other members are Lim Kit Siang (Ipoh Timur), Dato Dr. Wan Hashim bin Wan The (Gerik), Ronah binti Abdul Rashid Shirlin (Papar), Teng Boon Soon (Tebrau), Dr. James Dawos Mamit (Mambong), Devamany Krishnasamy (Cameron Highlands), Tan Lian Hoe (Bukit Gantang), Datuk Richard Riot anak Jaem (Serian), Eric Enchin Majimbun (Sepanggar), Edmund Chong Ket Wah (Batu Sapi) and Dato Hj. Ab. Halim bin Ab. Rahman (Pengkalan Chepa).

The judgment of  Judge Datuk Gopal Sri Ram, as reported by New Straits Times today, headlined “Halim, Anuar had patronage of Daim, says judge”,  laid out the facts resulting in the judge’s verdict of Daim’s patronage as Finance Minister to his two protégés worth RM764 million:

It was puzzled why the then Finance Minister Tun Daim Zainuddin said in 1990 that the Federal Government was in no position to pay Syarikat Teratai KG Sdn Bhd compensation of RM764 million in lieu of its toll concession being terminated.

But he seemed to sing a different tune a while later when another company took over STKG.

This is how the deal unfolded.

In 1986, Fawziah Holdings, through STKG, succeeded in obtaining a tender from DBKL to design, build and operate several roads in Kuala Lumpur. In December 1988, four parties invested in STKG, bringing in RM65 million worth of capital.

DBKL suspended the toll collection in September 1990 after a demonstration at the Cheras toll plaza. As a result, compensation of RM764 million was payable by DBKL to STKG.

In November 1990, UEM Bhd made an offer to purchase all the shares in STKG for RM97.5 million. In reality, the shares were to be purchased by a company nominated by UEM, namely Metro Juara, whose shareholders were Datuk Halim Saad and Anuar Othman.

Judge Datuk 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".

DBKL had terminated the contract because of a demonstration at the Cheras toll plaza.

"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."

Sri Ram noted that 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.

He noted even before the restructure sale agreement was signed on Jan 23, 1991, Metro Juara wrote to DBKL about recommencing the toll collection and re-negotiating the first concession agreement.

"It would not have written such a letter unless everything had already been out in place," he noted.

Sri Ram added that 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 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.

The Court of Appeal judgment also found a case of “aggravated form of CBT” in a separate front-page NST report headlined “The Metramac Case –‘THEY TOOK RM32 m’”.

The NST reported:

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.

This was the damning finding of the Court of Appeal which ordered Metramac Corporation Sdn Bhd to pay about RM65 million to a construction company in compensation for loss of advertising rights.

The court ruled on the case yesterday but released its written judgment today.

The question is whether the Police will immediately  commence investigations into Halim Saad and Anuar for aggravated form of CBT based on the Court of Appeal judgment.

Although the counsel of toll concessionaire Metramac Corporation Sdn Bhd has announced that application for  a stay of execution and an appeal to the Federal Court against the decision of the Court of Appeal ordering the company to pay RM65 million to Fawziah Holdings Sdn Bhd for claims of a signage and advertising agreement between the two parties would be filed on Monday, this has nothing to do with criminal or corruption proceedings which would not be affected by the outcome of any appeal.

(14/01/2006)