Tycoon Halim Saad’s legal battle over Umno’s assets set to be messier, report reveals BY EILEEN NG OCTOBER 18, 2013 An on-going legal tussle over Umno’s business assets, between Putrajaya and tycoon Tan Sri Halim Saad (pic), is set to get messier, The Edge Review reported. The digital weekly news publication reported that Halim, a former controlling shareholder of troubled conglomerate Renong Berhad, had filed a suit in mid-April to seek an order from the High Court to direct Putrajaya to honour a settlement agreement valued at roughly RM2 billion (US$629.7 million) for his takeover of the Renong group. The filings also made public correspondence between him and former prime minister Tun Dr Mahathir Mohamad, which The Edge Review described as offering a “rare peek into behind-the-scenes manoeuvrings during some of the most dramatic days in corporate Malaysia” as the country struggled to boost investor confidence after the 1997 Asian financial crisis. The report noted that recently, Halim has moved to back up his legal claims with sworn statements from key individuals, including his lawyer and a former Umno treasurer. A senior Kuala Lumpur-based lawyer, Abdul Rashid Manaf, who had accompanied Halim to meetings with top government officials on the Renong takeover, claimed he was a witness to negotiations that culminated in an agreement on a financial settlement for Halim. The report said Abdul Rashid recalled a meeting in April 2010 he attended between Dr Mahathir (pic) and Halim over protracted issues surrounding compensation for the former Renong boss. “Dr Mahathir’s response was startling. According to him, there was never any reason to pay Halim all along,” he was quoted as saying. The report also noted that in a separate sworn statement, Umno’s former treasurer, Datuk Seri Abdul Azim Mohd Zabidi, recalled discussions he had with Tan Sri Nor Mohamed Yakcop who implied that the Renong assets belonged to Umno. “When I took over as Umno treasurer, I received a substantial amount of cash and shares belonging to Umno. Whether the cash portion was part of any settlement from the Renong deal, I don’t know and I never asked,” he was quoted as saying. Halim is suing the government, the state-owned strategic investment fund Khazanah Nasional Bhd and former economic affairs minister Tan Sri Nor Mohamed Yakcop, who acted as the government’s agent in the negotiations for the Renong takeover in 2001. The three defendants in the suit have applied to strike out Halim’s claims on grounds that there was never any agreement over compensation. The defendants also argued that the suit was filed out of time. Under Section 6 of the Limitation Act 1953, a litigant should act within six years once a cause of action arose. In this instance, Halims clock started ticking from August 2002, when he was told that his claim for the lump sum payment would not be entertained by Khazanah. The report said when Umno was declared illegal in April 1987, its business assets were in limbo. It said through a series complex transactions, Halim acquired Umno’s former assets and regrouped them under Renong through personal finances and bank borrowings – not on behalf of the political party. Reincarnated as an independent operator, Halim went on to build Renong and UEM, one of Malaysias largest companies. To recap, the Asian financial crisis of 1997 led to the fall in Renong’s share prices and exposed the conglomerate’s poor cash flow and large debt burdens. A business manoeuvre that year in UEM’s purchase of a 32.5% block of shares in Renong did not go down well with the investing public. To appease the market, Halim, in 1998, offered to buy the Renong shares from UEM through a put option. The option price was RM3.2 billion, which was to be paid in four instalments, the first three of which was RM100 million each, and the balance with interest on February 14, 2001, when the option was due. Halim paid the first RM100 million but could not pay the second when it was due, as a result of which Khazanah took over. The sovereign wealth fund took UEM private in 2001 and later cancelled the option. – October 18, 2013.
Posted on: Fri, 18 Oct 2013 17:00:40 +0000
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