Federal Court rules ex-Selangor MB Khalid empowered to approve VSS payment on his own

PUTRAJAYA (April 19): Eight former staff of former Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim can keep the RM2.7 million paid to them as compensation in a voluntary separation scheme (VSS) in 2014.

This follows a unanimous decision by a Federal Court five-member bench led by Court of Appeal President Tan Sri Rohana Yusuf in allowing the former staff's appeal to set aside the appellate court's decision which went against them.

Justice Rohana said the Selangor Menteri Besar Incorporated (MBI), established under the MBI Enactment, is a sole legal entity.

She said that at the material time, Abdul Khalid was legally empowered to approve the VSS payment under the MBI Enactment on his own without the need for approval of the board of directors.

Justice Rohana said Abdul Khalid's power pursuant to the MBI Enactment was not fettered and not subject to the board of directors' approval.

Justice Rohana also said MBI failed to establish that the approval of VSS payment was unlawful.

She said there was no requirement in the MBI Enactment or any of the law mandating MBI to be governed by the board, adding that the failure to obtain sanction of the board cannot be said to be a decision in breach of law or statute so as to render the decision unlawful. 

Justice Rohana set aside the Court of Appeal's decision and reinstated the decision of the High Court, as well as ordered MBI to pay RM50,000 in costs.

The other judges were Chief Judge of Malaya Tan Sri Azahar Mohamed and Federal Court judges Datuk Seri Mohd Zawawi Salleh, Datuk Vernon Ong Lam Kiat and Datuk Zabariah Yusof. The proceedings were conducted via Zoom. 

MBI filed the suit in May 2015 against the eight to reclaim the money paid to them via VSS in 2014.

Former chief executive of MBI Faekah Hussin was paid RM695,400 in compensation, and ex-chief operating officer Rohani Talib received RM524,400 while the other staff Arfa’eza Abdul Aziz received RM478,935, Mustapha Mohd Talib received RM265,320, Rahimah Kamarudin received RM265,650, Dr Sulaiman Masri received RM182,385, Abdul Halim Mohamed Yusof received RM186,300, and Tuan Nazuri Tuan Ismail received RM115,200.

The payments were made after Abdul Khalid resigned as the Menteri Besar on Sept 23, 2014 and Datuk Seri Mohamad Azmin Ali was sworn in as his replacement.

The Shah Alam High Court in 2017 ruled that the compensation paid to the eight was valid but in 2018, the Court of Appeal reversed the decision.

Lawyer New Sin Yew represented the former staff while Masturina Mohamad Radzi appeared for MBI.

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