KUALA LUMPUR (March 16): The High Court has dismissed an application brought by National Feedlot Corp Sdn Bhd (NFC), its chairman Datuk Seri Dr Mohamad Salleh Ismail and nine others, to sell three plots of land worth more than RM6 million in Gemas, Negri Sembilan, in the federal government’s RM250 million civil suit against them.

Judicial Commissioner Anand Ponnudurai dismissed the application by the eleven defendants when trial resumed yesterday morning, and awarded costs in the cause to the Federal Government.

The defendants Salleh, NFC and nine others – represented by lawyers Datuk K.Kirubakaran and Datuk Seri Rajan Navaratnam – had, in their submissions, contended that the government had not procured the 5,000-acre Gemas land from the state government of Negri Sembilan, as was promised.

They claimed that this resulted in NFC having to take matters into their own hands and procuring the land from the Negri Sembilan government themselves. However, they were only able to procure 1,500 acres of the Gemas land, which they claimed was not enough for purposes of cattle feed production for the heads of cattle they purchased.

They also said the sale of the land was to finance NFC’s operational expenses and other needs. The land no longer serves its purpose, as the government had breached the Implementation Agreement and Loan Facility Agreement by its failure to build an Export Quality Abattoir (EQA), they claimed.

The plaintiff, led by Senior Federal Council Azizan Arshad in his submissions, contended that the Federal Government had advanced the defendants a loan sum of RM 250 million as per the Loan Facility Agreement executed between both parties.

Azizan also argued that the land size which NFC had procured via the Negeri Sembilan government was a decision made by the state government and had nothing to do with the federal government.

“The matter fell outside the jurisdiction of the Federal government,” he said.

“In fact, it is worth noting that the issue on the lease of the land was dealt with, and directly negotiated by the first defendant and the State Government of Negri Sembilan, with no interference from the Federal Government,” he said, referring to NFC.

Azizan also countered that there was no reason to build the EQA, as the production of cattle in Gemas did not meet the required threshold, as stipulated in the Implementation Agreement.

He also contended that NFC’s claim that they needed to sell the land to pay for operational expenses is “dubious”, as “it is evident from the Companies Commission of Malaysia’s (SSM) search that the first defendant (NFC) has not been active and that there have been "no operational activities performed since 2013”.

He said the defendants have failed to show that they had been actively involved in the operation of the project to date. “The defendants assert that utilisation of the monies from the proceeds of the Gemas Lands sale is intended for “other needs”, however, there were no further deliberation in the defendants’ affidavit as to what “other needs” may be,” he said.

Once the application was dismissed, the plaintiff’s seventh witness in the trial, auditor from Price Waterhouse Malaysia (PwC Malaysia) Lim San Peen took the witness stand.

Upon cross examination from Rajan and Kirubakaran, the witness agreed to their suggestion that without the abattoir, which was the responsibility of the Federal Government, NFC would not be able to carry out the project adequately and effectively.

It was also put to the witness that he did not have anything to do with PwC’s report on NFC, as he did not sign it, nor was his name mentioned in the report, which Lim agreed.

The Ministry of Finance (MoF), as the golden shareholder in NFC, had appointed audit firm PwC in late January 2012 to conduct a due diligence on the RM250 million loan from the government and its original agreement with NFC between Dec 6, 2007, and Dec 31, 2011.

Salleh is the husband of former Wanita Umno chief Tan Sri Shahrizat Abdul Jalil, formerly the minister of women, family and community development. Besides NFC, also named as defendants in the suit are the couple’s three children and seven companies owned by the family. They were accused of misappropriating and wrongly using RM118 million out of the RM250 million loan from the government.

The government is also seeking a declaration from the court to have Mohamad Salleh’s family be personally liable for the debt repayment, the RM118 million allegedly misappropriated from the loan and secret profits arising from it, as well as Putrajaya’s entitlement to claim equitable titles to the properties bought by the defendants using the misappropriated sum.

The trial continues on Wednesday March 17, with the same witness to be re-examined by Azizan.

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