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INTRODUCTION

1. This statement is issued in response to the decision of the Court of Appeal dated 12th January 2006 in Civil Appeal W-02-1009-2003 involving Fawziah Holdings Sdn Bhd and Metramac Corporation Sdn Bhd. The decision of the Court of Appeal, in particular, the written grounds of judgment of Gopal Sri Ram JCA has cast aspersions over the conduct of not only myself in my capacity as the then Minister of Finance but also on the previous Administration.


2. At the outset, I wish to stress that this is a statement I wished I would never have to make. It serves as an avoidable distraction to the undertakings and efforts of the present Administration and challenges facing this nation. In fact, ever since my retirement from Government in May 2001, I have not once publicly made statements that could conceivably be deemed as political. Nonetheless it is an inherent right of a private citizen to be heard and the collective rights of all Malaysians to have full access to all the facts and truths when decisions and judgments of the Cabinet are disputed. I seek not to absolve myself of responsibility from collective decisions, judgments and consultative process of the Cabinet, which I had proudly served for more than nine years. I only seek to state all the facts to the best of my knowledge and recollections, especially with regards to my own role in the Metramac situation.

3. As a lawyer and former Judge of the Sessions Court, I accord the highest respect for Judges whose standing should be judiciously protected. Accordingly, my statement shall be restricted to the comments and/or findings of the Court of Appeal that relate specifically to me. It is, I think prudent at this juncture to examine the relevant facts.

OVERVIEW

4. The Court of Appeal consisting of Gopal Sri Ram JCA, Hashim Bin Dato' Yusoff JCA and Zulkefli bin Ahmad Makinudin JCA in Civil Appeal W-02-1009-2003 granted Fawziah Holding Sdn Bhd three primary orders:

(a) Judgment be entered in Fawziah Holdings Sdn Bhd's favour and against Mertamac Corporation Sdn Bhd ("Metramac") in the sum of RM65,182,920.00;

(b) Interest on the aforesaid judgment at the rate of 4% from the date of the writ until today and thereafter at 8%; and

(c) An inquiry to be conducted by the Registrar of the High Court into the sums received by Metramac from any source whatsoever under the second concession agreement;

5. In reaching its decision, the Court of Appeal, in particular, Gopal Sri Ram JCA made the following statements where I am specifically named. For completeness, the relevant extracts of the Judgment of Gopal Sri Ram JCA, which is approved by Hashim Yusoff bin Dato' Yusoff JCA are set out below:

"11. It begins with the defendant's board asking Dato' Fawziah to discuss with DBKL and the Federal Government various options to have the matter resolved. One of these options was the payment of compensation to the defendant for termination of the first concession agreement and in accordance with its terms. The different solutions to the problem that had presented itself through no fault of the defendant were put to DBKL vide the defendant's letter dated 8 October 1990. DBKL in its letter of 20 October 1990 agreed in principle to take the option of terminating the first concession and paying compensation. But no figure was mentioned although the defendant had put forward an estimated sum of RM764.2 million as compensation. An appeal to the then Minister of Finance, Tun Daim Zainuddin, fell on deaf ears. He simply told the defendant's then existing shareholders that the Federal Government was not in a position to pay the defendant any compensation."

"13. Now, the offer by UEM to buy out the defendant's share for RM97.5 million simply does not make any commercial sense. Here you have a company that has just had its loan and shareholders capital wiped out in one stroke. It had no money in its coffers. It had huge debts. It had no prospects of receiving any compensation from DBKL. So why pay RM97.5 million for the share of such a company? The answer is simple enough. Annuar Othman and Dato Halim Saad had something which the plaintiff did not. And that was the patronage of the then Minister of Finance, Tun Daim Zainuddin. The events leading to the takeover of the defendant company and subsequent thereto clearly bear this out. For example, look at the confident way in which Metro Juara behaved. Even before the restructure of sale agreement was signed on 23 January 1991, Metro Juara wrote to DBKL on 14 January 1991 about recommencing toll collection and re-negotiating the first concession agreement. It would not have written such a letter unless everything had already been put in place."

"16. In its letter of 30 August 1991, DBKL said that it would pay the defendant RM312 million for the cost of works done. On 13 February 1992, the Federal Government in conjunction with DBKL agreed to subsidise the defendant with a sum of RM405 million to enable the defendant to meet the cost of financing the works to be undertaken under the agreement that was to be entered into between DBKL and the defendant. Mark you, at this point in time, not a stick of work had been done under the new concession agreement. On that very day, that is to say, 13 February 1992, two other events occurred. First, DBKL entered into another concession agreement. Second, the Ministry for Public Works gave the defendant an undertaking to pay it RM32.5 million as "payment for share premium" not "previously taken into account": So far as this case is concerned, the words within the quotation marks are meaningless. Because they have no nexus whatsoever to any of the agreements entered into between the several parties. You may as well ask how all this could have happened without the direct involvement of Tun Daim. It is also incomprehensible why the defendant as it was constituted immediately before the takeover by Metro Juara was not given this same financial support by the Federal Government. After all, at least two of the pre-takeover shareholders were either Government concerns or Government assisted concerns. And in the case of Tabung Haji, the ultimate beneficiaries would have been the poorer section of our society. I think that it is a fair question to ask why taxpayers' money was channeled into the hands of two private individuals - to profit them - instead of a wider section of the general public. It is not at all clear why the Minister for Finance used his power to favour Annuar Othman and Dato' Halim Saad."

"34. The second thing that is wrong with the defendant's argument is this. Assume for a moment that they are entitled to do so - which is not the law. Even so, they must come to court with clean hands. But they do not. They are the ones who misappropriated the defendant's property - the RM32.5 million. They are the ones who, with the support of Tun Daim, oppressed the previous shareholders into parting with their shares. They are the ones who took advantage of all the ideas of Dato' Fawziah and used it for their benefit and obtained huge payments from DBKL and the Federal Government. It is now scarcely open to them to point fingers at the plaintiff."

6. Zulkefli Bin Ahmad Makinudin JCA, in his written grounds of judgment did not make similar statements but in his judgment states that:

"(35) It became apparent, albeit later, that the Government had decided by then that UEM should take over the project by buying over STKG (Syarikat Teratai). The existing shareholders were all then under pressure to sell off their respective shares to UEM. The existing shareholders of STKG were also told by the then Finance Minister Tun Daim that the Government was not in the position to pay compensation to them. This is evidenced from the exchange of the letters between Dato' Fawziah and Tun Daim. [See the letter of 7.2.1995 from Dato' Fawziah at page 1511 of Appeal Record Vol. 5 and the reply from Tun Daim dated 9.2.1995 at page 1078 of Appeal Record Vol. 3]."

7. Before commenting on the statements made by the Court of Appeal in its written grounds of judgment, it is first necessary to examine the facts surrounding the dispute between Fawziah Holdings Sdn Bhd and Metramac.

THE BACKGROUND FACTS

8. The previous Administration had from the outset sought to transform the economy, unlock value and spread the wealth effect, elevate Malaysians into the middle classes, nurture professionalism and entrepreneurship so central to sustaining economic growth; bring new ideas and dynamism in management of assets; expand the infrastructure, build roads and highways; plant self-esteem in the hearts of all Malaysians; straddle the world to seek new markets and investments; and also, offer our business and professional expertise to the world. We fast-tracked the process, we had to learn and master new things fast. We needed to develop expertise in a host of areas and make sure these experts are globally competitive. I shared and upheld this vision, articulated and cohesively implemented by the then Prime Minister. We needed home-grown expertise to build cars, highways and tall buildings. We had towering ambitions. Given the pace of progress since, it is easy to lose sight of the fact that when Tun Dr Mahathir Mohamad became Prime Minister in 1981, we had been an Independent nation for only 24 years.

9. Uppermost we had to build world-class cities and develop competitiveness. The traffic of Kuala Lumpur was choking. This was affecting the quality of life and stifling the economy as efficiency of city transport is intertwined with economic efficiency. Cheras and the other suburbs were growing at breakneck speed without a cohesive traffic dispersal strategy. Many would still remember the infamous Cheras Crawl. The Government, even before I joined the Cabinet in 1984, had decided on a series of interchanges and road widening projects.

10. In 1987, Syarikat Teratai KG Sdn Bhd ("Syarikat Teratai") signed a Concession Agreement with Dewan Bandaraya Kuala Lumpur ("DBKL") dated 20th November 1987 ("1st Concession Agreement") to construct, finance and manage a number of toll roads and interchanges in Kuala Lumpur. Suffice for me to say that the Cabinet had expressed some views on the 1st Concession Agreement signed between DBKL and Syarikat Teratai, and this was confirmed when the Cabinet had to quickly resolve a crisis induced by the stoppage on 12th September 1990 of toll collection at Kilometer 8 Cheras. The Agreement as signed by DBKL and Syarikat Teratai, would compel the Government to compensate Syarikat Teratai some RM100,000.00 a day if the toll collection is stopped beyond a certain time frame. (Please see The Star newspaper report dated 18 September 1990 - Attachment I.) Time was of the essence if the government is to avoid this debilitating cost. The Government was also mindful that whilst termination of the Concession would impose financial liabilities on the Government, toll-rate reductions would also further inflict financial difficulties on the concessionaire.

11. With the near riots and protests (please see The Star report dated 8 September 1990 - Attachment II) that led to the arrest of an MP from the DAP, the Cabinet directed that the toll collection be suspended. A Task Force headed by the Secretary-General of the Works Ministry was set up to brief the government on all aspects of the concession. (Please see The Star report dated 27 September 1990 - Attachment III). Subsequently, the Task Force was also asked to study the possibility of UEM taking over Syarikat Teratai.

12. The Cabinet was of the collective view that other options should be pursued. It was then that the Cabinet noted that UEM was an option. The Cabinet had to decide on another pressing issue - the toll rate. Even parties backing the Government decision to impose toll felt the rates should be reduced. One justifiable complaint was the lack of alternative roads for the Cheras residents.

13. Subsequently the various ministries and Government agencies such as the Ministry of Finance, Ministry of Works, the Economic Planning Unit in the Prime Minister's Department, the AG Chambers and DBKL were tasked within their respective jurisdiction with resolving the issue with the concession company.

14. The Ministry of Finance was asked by the Cabinet to talk to the shareholders of Syarikat Teratai and UEM to resolve the issue.

15. I then asked the various parties to see me as a consequence of the Cabinet decision. I met the various shareholders including Dato' Fawziah around the first week of November 1990 when I informed them of the Cabinet's decision. On 23rd January 1991, Metro Juara Sdn Bhd signed the Sale and Purchase Agreement wherein Syarikat Teratai shareholders agreed to sell all their shares to Metro Juara Sdn Bhd for a consideration of RM97.5 million. The Government had a moral and economic responsibility not to let the company fail. An appropriate takeover sum had to be worked out. Tabung Haji was a shareholder. It looks after the interest of millions of depositors. The directors of Syarikat Teratai never did dispute the take-over price. In fact Dato Fawziah had on 14 December 1990 written to me informing me that they (Syarikat Teratai and Metro Juara) had reached agreement on all terms of the sale and requested my good office to speed up the signing of the sale and purchase agreement. (Please see copy of the letter enclosed - Attachment IV).

16. On the issue of compensation, the Cabinet decided that no compensation be payable. In any event, the Government procedure has always been that any payment to be made to any party has to be requested by the relevant government agency, not by a private company or an individual. Additionally, I had by then already tabled the 1991 Budget, which made no provisions for compensations. If the funds were not part of the annual Budget and additional funds were needed, the Cabinet would have to discuss the matter and then submit it to Parliament for further debate and approval under a Supplementary Budget.

17. Dato Fawziah subsequently confirmed that she had met the then Deputy Prime Minister and three other Ministers and had been similarly informed of the Cabinet's decision that no money would be paid as compensation.

18. The Government took certain positions on the entire deal involving Syarikat Teratai and DBKL. This will be answered if the public could gain access to the relevant Cabinet papers.

19. My active role in the Metramac situation ended when I resigned as Minister of Finance on 14th March 1991. It was only subsequently that I came to know that the Government has asked Metramac to expand the scope of roads and interchanges in Kuala Lumpur and that on or about September 1991, toll collection resumed at substantially reduced rates. By September 1991 I was already at Harvard University to begin my tenure as a Visiting Scholar. It was only later that Dato' Fawziah saw me on a number of occasions to request my assistance to resolve a prolonged dispute between Fawziah Holdings Sdn Bhd and Metramac regarding the advertising rights under the concession. Of the two companies, it was Dato Fawziah who approached me to mediate in the dispute. I obliged as I have always tried to assist entrepreneurs where possible.

COMMENTS

20. Having examined the relevant facts, the following is clear:

(a) The decision to terminate the 1st Concession Agreement between Syarikat Teratai (as it then was) and DBKL dated 20th November 1987 was a decision of the Cabinet;

(b) I had resigned as Minister of Finance on 14th March 1991 (please see copy of letter from Jabatan Perkhidmatan Awam Malaysia dated 25 March 1991 - Attachment V).

(c) The 2nd Concession Agreement executed between Metramac and DBKL dated 13th February 1992 took place 11 months after my resignation as Minister of Finance. I had no involvement in the negotiations and/or drafting of the terms and conditions of the 2nd Concession Agreement.

21. I am advised by my solicitors that the crux of Fawziah Holdings Sdn Bhd's claim against Metramac is premised primarily on a cause of action for breach of the terms and conditions of the Sale Agreement dated 31st March 1988 (amended by a Supplemental Sale Agreement dated 12th September 1988) [hereinafter collectively referred to as the "Sale Agreement"] and/or the Signage Sub-Licence Agreement dated 2nd November 1990 ("Signage Agreement") wherein Fawziah Holdings Sdn Bhd sought inter-alia the following relief:

(a) Damages for breach of the Sale Agreement in respect of Advertising Rights;

(b) Further or alternatively, damages in the sum of RM65,189,920.00 for breach of the Signage Agreement;

(c) An account with inquiries and consequential directions of all profits and benefits received and to be received by Metramac under the 2nd Concession Agreement; and

This is evident from a reading of Fawziah Holdings Sdn Bhd's Re-amended Statement of Claim dated 7th March 1995 vide Kuala Lumpur High Court Civil Suit No. D5-22-110-1995.

22. I am also advised by my solicitors that:

(a) The Re-amended Statement of Claim dated 7th March 1995 filed by Fawziah Holdings Sdn Bhd's solicitors makes no reference to me as a party nor is it expressly pleaded in the Re-amended Statement of Claim that I have committed any wrongs;

(b) The Notes of Evidence from the trial before Steve Shim Lip Kiong J (as he then was) and/or Kang Hwee Gee J makes no reference to me nor am I accused of having committed any wrongs; and

(c) The Written Grounds of Judgment of the High Court dated 21st October 2003 also makes no reference to me whatsoever.

23. As a proviso, my recollection of events and the Cabinet decisions in relation thereto are of 15 years ago and are based on my private documents. I do not have the benefit of any Cabinet documents. As such, I am requesting that the specific Cabinet Minutes relating to Syarikat Teratai and/or Metramac be declassified.

CONCLUSION

24. In conclusion, I wish to state that the Court of Appeal in its judgment has specifically accused me of the following:

(a) "An appeal to the then Minister of Finance, Tun Daim Zainuddin, fell on deaf ears. He simply told the defendant's then existing shareholders that the Federal Government was not in a position to pay the defendant any compensation."

(b) "The answer is simple enough. Annuar Othman and Dato Halim Saad had something, which the plaintiff did not. And that was the patronage of the then Minister of Finance, Tun Daim Zainuddin."

(c) "It is not at all clear why the Minister for Finance used his power to favour Annuar Othman and Dato' Halim Saad."

(d) "They are the ones who misappropriated the defendant's property - the RM32.5 million. They are the ones who, with the support of Tun Daim, oppressed the previous shareholders into parting with their shares."

(e) "The existing shareholders of STKG were also told by the then Finance Minister Tun Daim that the Government was not in the position to pay compensation to them. This is evidenced from the exchange of the letters between Dato' Fawziah and Tun Daim. [See the letter of 7.2.1995 from Dato' Fawziah at page 1511 of Appeal Record Vol. 5 and the reply from Tun Daim dated 9.2.1995 at page 1078 of Appeal Record Vol. 3]."

25. I wish to state that:

(a) I did not decide in my capacity as the then Minister of Finance as to whether there was a sum to be paid as compensation to Fawziah Holdings Sdn Bhd. It was a decision of the Cabinet, for the reasons I have already alluded, that it was not feasible at that time to make any commitment to make such a payment;

(b) I categorically deny that Anuar Othman and/or Dato' Halim Saad did enjoy my patronage as the then Minister of Finance;

(c) I have already for the reasons stated earlier, alluded to the fact that the decision was a collective decision of the Cabinet and not an individual decision of myself as Minister of Finance;

(d) I categorically deny that I oppressed the previous shareholders into parting with their shares. I have already alluded to the circumstances under which Dato' Fawziah unilaterally parted with her shares. (Please see copy of letter dated 14 February 1990)

26. In respect of the reference to the letter from Dato' Fawziah dated 7th February 1995 and my subsequent reply on 9th February 1995, I wish to state that at that time I was no longer the Minister of Finance. I reiterated to Dato' Fawziah it was a Cabinet decision and there was no coercion on anyone's part. Further, if she was not happy with the negotiations (on the advertising rights) then she can proceed to Court, which she then did and is the subject of the case before the Courts.

27. I wish to state that whilst the independence of the judiciary is the pillar on which our judicial system stands and judges must make their decisions without fear or favour, such decisions must be guided by justice, fair play and restraint. I can do no better then to quote the words of Indian Supreme Court in State of Uttar Pradesh v Mohd Naim [1964] AIR SC 703 at pg. 707-708:

"If there is one principle of cardinal importance in the administration of justice, it is this: the proper freedom and independence of judges and magistrates must be maintained and they must be allowed to perform their functions freely and fearlessly and without undue interference by anybody, even by this court. At the same time it is equally necessary that in expressing their opinions, judges and magistrates must be guided by considerations of justice, fair play and restraint. It is not infrequent that sweeping generalizations defeat the very purpose for which they are made. It has been judicially recognized that in the matter of making disparaging remarks against persons or authorities whose conduct comes into consideration before courts of law in cases to be decided by them, it is relevant to consider: (a) whether the party whose conduct is in question is before the court or has an opportunity of explaining or defending himself; (b) whether there is evidence on record bearing on that conduct justifying the remarks; and (c) whether it is necessary for the decision of the case, as an integral part thereof, to animadvert on conduct. It has also been recognized that judicial pronouncements must be judicial in nature, and should not normally depart from sobriety, moderation and reserve."
(My Emphasis)

28. Whilst I am not interested in trying to ascertain the Court of Appeal's motive, if any, in making these uncalled for strictures against me, I am in the process of seeking legal advice as to my next course of action.

29. My solicitors have been put on notice by a letter dated 23 January 2006 by M/s Noraisyah & Co., solicitors for Fawziah Holdings Sdn.Bhd., that the Press Statement that was issued by my solicitors on my behalf dated 19 January 2006 is contemptuous and they have also put my solicitors on notice that they reserve all their rights in respect of any further Press Statements that may be issued by myself. I do not agree that either my first Press Statement or this Statement is in contempt of court. I am merely clarifying those parts of the Judgement which, in my view, are based on facts which are wrong. I am asking fellow Malaysians to not fear the truth as only through the truth can justice prevail and it is our of duty to bring the truth to the attention of the courts for judges to come to a fair and just decision .

Dated the 26 day of January 2006

A response to Halim Saad

Press Statement by Tan Sri Halim Saad

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