The Malaysian Insider
Feb 27, 2012

KUALA LUMPUR, Feb 27 — The High Court here will decide on March 5 whether to strike out both Malaysia Airlines’ (MAS) claim against Tan Sri Tajudin Ramli as well as his counter-claim against the government and the national carrier.

Tajudin, who was the executive chairman of the airline from 1994 to 2001, is applying to cancel MAS’s suit over losses due to the relocation of its cargo operations in Amsterdam and Frankfurt to a single hub in Hahn, Germany.

Putrajaya is also seeking to strike out Tajudin’s RM500 million counterclaim, in which he alleges the government and MAS defamed him with a civil suit for abuse of power while heading the flag carrier.

Lawyers for all parties declined to comment after meeting trial judge Rosilah Yop in chambers for just under two hours.

“The decisions will be on March 5. I’m sorry I can’t comment because it will be subjudice,” Tajudin’s counsel Lim Kian Leong told reporters.

But Tajudin and MAS are also expected to finalise an “out-of-court” settlement by May 10 after the Court of Appeal decided on February 16 to allow both parties to “settle negotiations.”

MAS has said it was forced to enter into a disadvantageous aircraft lease contract with a company, which was later linked to Tajudin’s family, causing it to lose RM10 million to RM16 million a month before the project was terminated when Tajudin left the company.

The termination resulted in a RM300 million arbitration claim against MAS by the company.

Tajudin has in turn claimed that a separate suit, by MAS and its two subsidiaries, MAS Golden Holidays Sdn Bhd dan MAS Hotels & Boutiques Sdn Bhd, contained bare allegations with no basis and was an abuse of the court system.

MAS and its subsidiaries charged that Tajudin and his four companies — Naluri Corporation Bhd, Promet (Langkawi) Resorts Sdn Bhd, Kauthar Venture Capital Sdn Bhd and Pakatan Permai Sdn Bhd — had intentionally breached his obligations and trust to win certain contracts that benefitted him, using MAS.

The Kedah-born businessman claimed that MAS had acted with malice and in bad faith in taking legal action against him to embarrass and tarnish his reputation.

The suit by MAS and its two subsidiaries against Tajudin is due to be heard by Rosilah on March 12.

Earlier this month, Tajudin settled out-of-court his debt owed to Pengurusan Danaharta Bhd (Danaharta) and several other government-linked companies (GLCs) for an undisclosed sum of money.

This was despite a High Court decision in December 2009 ordering the ex-MAS chief to pay the state asset management manager RM589.14 million plus two per cent interest per year, backdated to January 1, 2006.

Tajudin has been entangled in a complicated series of expensive suits, countersuits and appeals with various parties arising from his failure to service a billion ringgit loan he took to purchase a major stake in MAS in 1994.

He has claimed that his purchase was a forced “national service”, disguised as an arm’s length commercial deal, because the government wanted to appease the investment community and the public.

Dr Mahathir, however, denied in his autobiography published last March that he and Daim had forced Tajudin to bail out MAS in 1994 for RM1.8 billion.

Last August, Putrajaya intervened and commenced action to put an end to the controversial legal battle by ordering all suits against Tajudin to be dropped.

The move has been described as an attempt by the government to cover-up details found in Tajudin’s affidavit in support of his counter-claim where the embattled tycoon purportedly revealed much of the inner workings behind the purchase of MAS.

According to media reports, Tajudin had also claimed of an over-riding agreement protecting him from liabilities.

The 65-year-old was a poster boy of former finance minister Tun Daim Zainuddin’s now-discredited policy of nurturing a class of Malay corporate captains on government largesse during the Mahathir administration.