PUTRAJAYA: The four-year court battle between property developer KSL Realty Sdn Bhd and Danaharta Hartanah Sdn Bhd over parcels of land measuring 1,516 acres that are currently under the stable of companies belonging to Tan Sri Syed Mokhtar Albukhary ended on Nov 23 with the Federal Court shutting the final door on the Johor-based property developer.
KSL is a subsidiary of Main Market-listed KSL Holdings Bhd while Danaharta Hartanah is a wholly owned subsidiary of Pengurusan Danaharta Nasional Bhd which folded up in 2005.
Chief Judge of Malaya Tan Sri Arifin Zakaria, who sat with Federal Court Judges Datuk Mohd Ghazali Mohd Yusoff and Datuk Md Raus Sharif, announced the court’s unanimous decision to dismiss KSL Realty’s application to review a decision by a different panel on the Federal Court that disallowed the company from appealing the Court of Appeal’s decision in the matter.
To recap, the Court of Appeal on June 5, 2008 overturned a High Court decision in favour of KSL Realty against Danaharta Hartanah.
The dispute arose from a sale and purchase agreement (SPA) between KSL Realty and Danaharta Hartanah, dated April 11, 2005, for three plots of land in Mukim Tebrau, Johor Bahru. KSL Realty had paid a 10% deposit of the purchase price of RM264.1 million, which was subsequently returned when the deal failed to get the necessary approvals.
KSL Realty’s counsel Sulaiman Abdullah on Nov 23 asserted that the dispute centred on whether Danaharta Hartanah’s termination of the SPA was lawful.
According to case submissions, Danaharta Hartanah terminated the SPA on Nov 17, 2005, on grounds that the Estate Land Board (ELB) had not given its approval for the transaction as required by the SPA’s conditions.
Danaharta Hartanah contended that the deal could not be completed because the deal did not get the approval of the ELB and state authority.
KSL Realty filed a suit against Danaharta Hartanah on Nov 29, 2005, seeking a declaration that the SPA termination was unlawful and invalid as well as an order for specific performance of the SPA.
In its suit, KSL Realty alleged collusion, mala fide and/or deliberate failure to act on the part of Danaharta Hartanah resulting in the failure of the transaction being completed.
Sulaiman said KSL Realty’s failure to obtain ELB approval and Danaharta Hartanah’s subsequent termination of the SPA was the result of a “concerted effort” by the latter to sell the parcels of land to intervenors.
In December last year, DRB Hicom Bhd, a company controlled by Syed Mokhtar, announced that its wholly owned subsidiary Hicom Properties Sdn Bhd had bought the three parcels of land located in Iskandar Development Region (IDR) from two private companies for a sum of RM722.5 million.
Hicom Properties acquired two companies — Benua Kurnia Sdn Bhd and Neraca Prisma Sdn Bhd — that held the land. Benua Kurnia and Neraca Prisma successfully applied to become intervenors when the matter went to the Court of Appeal.
According to Sulaiman, the “most damning evidence” emerged in the midst of the Danaharta appeal to the Court of Appeal when the intervenors sought to intervene.
“The evidence was that the intervenors were waiting in the wings to procure the said lands and that the principal officer of the intervenors, one Datuk Awang Mohamad, was formerly a director at the Johor District Land Office,” he said.
Sulaiman, who is former president of the Malaysian Bar Council, submitted that Awang was involved in the ELB approvals when the parcels of land were being sought by KSL Realty.
In an affidavit, KSL Holdings Bhd executive director Ku Tien Sek alleged the presence of a third party linked to Syed Mokhtar in a meeting on April 18, 2005, with Danaharta Hartanah’s then CEO Datuk Zukri Samat.
Ku alleged that the third party, Asas Warisan Sdn Bhd, was represented by Syed Azmin Syed Nursin, brother of Syed Mokhtar.
Ku alleged in his affidavit that he refused to attend a proposed subsequent meeting with Syed Mokhtar, accusing Danaharta of “trying to put pressure” on KSL Realty by roping in Syed Mokhtar, something that Zukri has since denied in an affidavit.
According to case submissions, Asas Warisan made a written offer to purchase the lands from KSL Realty on a sub-sale but the latter had rejected the offer.
Ku claimed that Asas Warisan had written to then prime minister Tun Abdullah Ahmad Badawi and Johor Menteri Besar Tan Sri Abdul Ghani Othman seeking intervention.
Danaharta Hartanah’s counsel Yoong Sin Min submitted that the affidavits relied on in this case did not show any wrongdoing on the part of Danaharta Hartanah.
Yoong stressed that the SPA depended on approvals by the Foreign Investment Committee, Estate Land Board and state authority, which KSL Realty did not obtain.
“Allegations were made but not supported by any contemporaneous documents,” Yoong said.
This article appeared in The Edge Financial Daily, Nov 24, 2009.
TOP PICKS BY EDGEPROP
NEW 1 Sty SEMI D Seksyen U14 Booking RM500 Only
Shah Alam, Selangor
Richmond Mont Kiara 4 rooms 3 bathrooms
Mont Kiara, Kuala Lumpur
Ukay perdana sierra hijauan ampang semi d
3 Storey Luxury Semi D @ Forest Reserved Ampang
[RENTAL GET RM 3000 READY TENANT 2020 NEW PROJECT]
[270K HOT SELLING INVESTMENT PASSIVE INCOME 2R+2B]
Almyra Residences @ Bandar Puteri Bangi
Corner unit of 3 Storey Semi-Detached House
Ulu Kelang, Selangor
3 Sty 22x75, Bandar Bukit Tinggi, Renovated
Freehold Puchong Cashback, SS2 PJ 25min, Sunway
Seksyen 25, Shah Alam (Taman Sri Muda)
Shah Alam, Selangor