Malaysiakini
Mar 2, 2012

The Minority Shareholders Watchdog Goup (MSWG) is puzzled by last month’s out-of-court settlement between several government-linked companies (GLCs) and former Malaysia Airlines chairperson, saying the unpaid debt would now have ballooned to RM840 million.

Its chief executive officer Rita Benoy Bushon says in the MSWG Newsletter that Pengurusan Danaharta Nasional Bhd, had in 2009 obtained a judgment for RM589 million against Tajudin from the Kuala Lumpur High Court.

“This is probably the largest sum awarded in Malaysian legal history. The judgment allows Danaharta to charge an interest of two per cent over the base lending rate on the outstanding sum from Jan 1, 2006.”

“A rough calculation shows that this amount would have ballooned to RM840 million. What could have prompted Danaharta tnot to exercise its legal right to collect the outstanding amount? We are somewhat perplexed by the out-of-court settlement,” Bushon said.

She also said it was unclear why the government resorted to an out-of-court settlement despite winning the case in court.

Established in 2000, MSWG is part of a broader capital market framework to protect the interests of minority shareholders through shareholder activism.

It is one avenue of market discipline to encourage good governance among public listed companies, with the objective of raising shareholder value over time.

The Court of Appeal on Feb 22 recorded Tajudin’s withdrawal of his appeal against the 2009 judgment and his RM13 billion counter-claim in an out-of-court settlement. The terms of the settlement are being kept secret.

Much criticism on the settlement

This move has received a lot of criticisms, with Petaling Jaya Utara MP Tony Pua also claiming that Tajudin’s Danaharta debt was written off as part of the settlement.

Among the litigants involved in the lawsuit are Telekom Malaysia Bhd, Naluri Corporation, Celcom (M) Bhd, Atlan Holding Bhd and CIMB Group, besides Danaharta.

Suspicions over the settlement arose after Minister in the Prime Minister’s Department Nazri Abdul Aziz in a letter dated Aug 8 last year directing all the GLCs involved in the matter to settle their suits with Tajudin out of court.

Tajudin, a former MAS chairperson, had in his affidavit dated Feb 10, 2012, filed with the Court of Appeal, described Nazri’s letter as a directive for a settlement.

Asked about his letter, Nazri said it was merely an advice and not a directive to the GLCs.

The Kuala Lumpur High Court will on Monday decide on the government’s application to strike out Tajudin’s RM500 million counter-claim, and Tajudin’s move to strike out the MAS suit against him over an arbitration case in Germany, in which the national carrier had to pay RM174 milion.