©The Sun, Letters to Editor (Used by permission)
By Muhamad Fawzi Abdul Karim
ON Jan 16, 2006, Tan Sri Halim Saad issued a press statement in which he questioned the judgment of the Court of Appeal on the Fawziah Holdings Sdn Bhd vs Metramac Corporation Sdn Bhd case.
I as the Project Advisor and brother of Datuk Fawziah Abdul Karim, the then director of Syarikat Teratai KG Sdn Bhd, a family company (now known as Metramac Corporation Sdn Bhd) who primarily assisted my sister in the affairs of STKG, would like to put certain facts stated in Halim's statement in proper perspective.
STKG had won the concession to design, build and operate certain toll roads in Kuala Lumpur through an open tender invitation by Dewan Bandaraya Kuala Lumpur (DBKL).
Five companies, namely STKG, UEM, GKM, Pernas and Hashbudin participated in the said tender invitation.
The bid was evaluated by a Steering Committee comprising the Treasury, Economic Planning Unit, the Public Works Department and DBKL, which then awarded the concession to STKG. Halim through UEM had participated in the tender but was unsuccessful.
After the concession was awarded to STKG, Halim had on various occasions approached Fawziah to persuade her to allow UEM to take up equity in STKG or sell her shares in STKG to UEM.
It is not totally true that he was forced by the government to take over STKG. Our records show that he was in fact interested in the project since the concession was awarded to STKG in 1987. He was eyeing STKG all along.
Through a series of various meetings with Fawziah, the last being July 1990, where a copy of the Information Memorandum prepared by Schroders was forwarded and handed to him, Halim was aware that STKG was a profitable company and to say that he was "arm–twisted" to take over STKG is incredulous.
One of the Judges, Zulkefli bin Ahmad Makinuddin in his decision stated that:
"In total, the payment to Metramac, by one description or the other, now totalled RM756,700,000. It is not payment under the second concession agreement. It must include the `termination charges' of RM63million to the plaintif f put forward by Metramac itself.
"It is not mere coincidence that the sum of RM756,700,000 paid, or to be paid, to Metramac approximates the sum of RM764,000,000 claimed as compensation by STKG for termination of the first concession agreement.
"It is also not mere coincidence that Metramac had to mutually agree to the termination of the first concession agreement and receive in return a payment or pledge of payment totalling RM756,000,000."
The New Revised Concession Agreement was signed between Metramac and DBKL on 13/12/1992.
A huge amount of compensation termed as "subsidy" had been paid by the Ministry of Works through DBKL to Metramac.
It is also a fact that under the Second Concession Agreement, more income was expected to be earned by Metramac through enlarged works and concession.
It is important that the public know that since the takeover of STKG in January 1991 by Halim, things did not stand still. In August 1993 Halim, (through Metro Juara) injected the shares of Metramac via a reverse takeover scheme of Metacorp in exchange for 70,000,000 new Metacorp shares at RM2.50 per share.
The monetisation (making the shares more liquid and easy to sell) of Metramac's shares via the reverse takeover of Metacorp's shares in the KLSE resulted in the value of Halim's 70,000,000 shares in Metacorp (at a conservative price of RM6.40) to be worth RM488,000,000.
It will be seen from the above figures that Halim, through the corporate exercise with Metacorp saw his share value go up 11 times in just a brief period of 2 years.
Details from the record are as follows:
The above figures do not bear out the suggestion that STKG was taken with reluctance.
With the above figures, Halim's assertion that Metramac was not a "bankable" company and that he was forced to buy it would seem to be inconceivable.
There is, therefore, absolutely no justification for public funds to be used to pay RM32.5m to Metramac or Metro Juara, which are companies controlled by Halim for his private investment.
Halim in his press statement did not produce the entire content of the letter dated Feb 13, 1992, from the Ministry of Works. The relevant part of the letter which is not reproduced sets out the condition for the payment of the RM32.5 million.
The paragraph is as follows:
Walaubagaimanapun pembayaran tersebut akan hanya dibuat selepas tuan mendapatkan persetujuan bertulis daripada peminjampeminjam tuan membatalkan perjanjian konsensi asal serta segala hak–hak dan tuntutan di bawah perjanjian itu pada atau sebelum 31.3.1992.
When this letter is examined in full, it will be seen that the note in the audited accounts of Metramac for the financial year 1992 as referred to by Halim in his press statement is incorrect.
The notes to Metramac's Accounts for the year ended March 31, 1992 stated that:
"The Government of Malaysia has agreed (via their letter dated Feb 13, 1992) and has paid an amount of RM32.5 million to the Concession Company on the condition that the Concession Company pay the premium to the shareholders of the Company."
This is not found in the letter dated Feb 13, 1992, from the Ministry of Works.
STKG was successfully set up by Fawziah before it was taken over by Metro Juara. The success of Metramac was achieved through my sister's sheer hardwork, coupled with blood, sweat and tears.
My sister was devastated, just like a mother who loses a child, after the takeover. It took her some 15 years to see justice being carried out.
I hope her nightmare is about to come to an end. What the Court of Appeal Judges has done was to uphold justice and administer the law in a fair and just manner regardless of the status of the litigants.
Finally, I wish to say that the Court of Appeal took some 4 months to deliberate on the matter and deliver two fully considered written judgements.
If anybody is unhappy with the judgment they are entitled to appeal and take up their complaint at the appeal, but it is improper for statements to be made criticising the judgment for various reasons.