KUALA LUMPUR, April 30 — Sime Darby Plantation Bhd (SDP) has sued a foreign-controlled firm for allegedly "grabbing” its land in Melaka below market price, claiming that the latter had cited former Yang di-Pertuan Agong Sultan Muhammad V’s name in the acquisition.

SDP launched the lawsuit yesterday against GI A Resources Sdn Bhd, which it said was controlled by Taiwanese and Chinese owners, over the forced takeover of the Melaka land at a price of RM35.28 million for a purported mixed development project.

It wants the court to stop and cancel the compulsory acquisition of the 75.07 hectares plantation land in Lot 7498 in Merlimau in Jasin district.

SDP, which is a government-linked company (GLC) with the Employees Provident Fund and Permodalan Nasional Bhd as its majority shareholders, said the compulsory acquisition is invalid and unconstitutional.

SDP is also suing the Melaka Land and Mines Department director, the Jasin land administrator, and the Melaka state government.

According to SDP, GI A Resources is a property investment firm formed in 2015, with 70 per cent of its shares held by Xinzhongwei Capital Holdings Sdn Bhd, and with the latter virtually owned at 98 per cent by shareholders who are Taiwan and China nationals.

"There it is clear that the compulsory acquisition is to grab land belonging to a GLC for the commercial interests of foreign-owned parties,” SDP land management unit head Mohd Razlan Mohd Rahim claimed in court documents.

Abrupt and ‘rushed’

In court documents sighted by Malay Mail, Mohd Razlan spoke of how the company had only discovered the compulsory acquisition process through a notice via Form E dated October 1, 2018.

Mohd Razlan said SDP was not given Form A or Form D, which are legally-required notices and declarations that its land would be acquired, with the latter dated September 20, 2018.

Mohd Razlan claimed that the compulsory acquisition process was rushed through shortly after GI A Resources wrote an email to inform SDP on March 11, 2019 that the "Agong” allegedly intends to proceed with the land acquisition.

Mohd Razlan said the Jasin land administrator (PTD) had then issued a letter on March 19, 2019, for the enquiry for the compulsory acquisition to proceed on March 27, 2019.

"On March 27, 2019, the Jasin PTD had rushed to end the enquiry for the compulsory acquisition of the land and decided to give an oral award for RM35,282,900.00 as compensation for the land, which is a suppressed value and does not reflect the current market value of the land,” Mohd Razlan said.

Sultan Muhammad V attends the Warriors' Day Celebration in Putrajaya in this file picture taken on July 31, 2018. ― Picture by Azinuddin Ghazali

How ex-Agong’s name cropped up

Kelantan ruler Sultan Muhammad V served as Malaysia’s 15th Yang di-Pertuan Agong from December 13, 2016 until January 6, 2019, when he took the unprecedented move of stepping down from the position as the country’s ruler.

Mohd Razlan said GI A Resources had allegedly sought to use Istana Negara’s influence in its letters to SDP over the land acquisition, claiming that the foreign-controlled company had in a December 12, 2018 letter said it would be involved in discussions with Yayasan Sultan Muhammad V and had also mentioned a purported representative of the Agong.

Citing minutes of a meeting between the two companies on January 10, 2019, Mohd Razlan said GI A Resources had also made various claims, including that the ruler wanted the Melaka land.

During the January 10 meeting, Mohd Razlan said GI A Resources had also claimed that Istana Negara had in an April 4, 2018 letter, purportedly signed off on behalf of Datuk Pengelola Bijaya Diraja, wrote to the Sime Darby Plantation’s CEO of the compulsory acquisition.

The purported letter had allegedly said the development project for a Bandar Pendidikan Bestari in Melaka had received Sultan Muhammad’s assent.

But Mohd Razlan said SDP’s CEO never received the purported letter from Istana Negara.

Mohd Razlan said he was informed by SDP’s lawyers that the Istana Negara as a federal institution had been used to intervene in matters which falls under the jurisdiction of state governments, if the purported letter and its alleged contents were authentic.

"If there was truly such a letter, it would breach the Federal Constitution, specifically Article 74 and List II of the Ninth Schedule,” he said.

Why the disagreement with compulsory acquisition

Mohd Razlan explained that the Melaka land was currently used as a palm oil plantation and contained five residences — including a valuable colonial-era bungalow that was 66 years old — that are used by the plantation’s senior management.

SDP said other plots of its land had previously been acquired for public interest such as the building of schools, mosques, hospitals, highways and public infrastructure, but said the Melaka land takeover was not for such purposes.

"As a GLC, Sime Darby Plantation does not oppose compulsory acquisition of land for such purposes for the needs of Malaysia’s society and citizens. But, this compulsory acquisition is not for the public interest for Malaysians,” Mohd Razlan said, claiming that the current case instead involved commercial interests by a foreign-owned firm that was allegedly abusing its ties to the royal institution.

Citing the advice of lawyers, Mohd Razlan said he believed that Article 13 of the Federal Constitution only allows compulsory acquisition of land when there is a genuine need, adding that the Land Acquisition Act 1960 cannot be abused for land "grabs”.

Article 13 provides that no person shall be deprived of their property unless done according to law, and that no law shall allow compulsory acquisition "without adequate compensation”.

In a typical compulsory acquisition process, property owners can expect to be paid lower than the market value, or lower than the sum they may have received if they had sold the property.

Mohd Razlan said SDP had sought to find a solution by telling GI A Resources that it could purchase the company’s land when it is offered to the public, adding that such land sale would be via open tender based on current market value.

Mohd Razlan said the foreign-owned firm had, however, refused to participate in an open tender process, alleging that the latter had in the March 11 email used the ruler’s name when purporting that the ruler disagreed that the land be tendered.

Last resort

Mohd Razlan said SDP had prior to this sent letters of appeal Melaka Chief Minister Adly Zahari to have the compulsory acquisition process cancelled, namely on October 29, 2018, November 13, 2018 and on March 25, 2019.

With no replies received over the appeals, SDP had "no other choice” except to file this lawsuit, he said.

Mohd Razlan’s 119-page affidavit included multiple pages of documents to back up his claims, including letters and email correspondence.

In its judicial review application, SDP is seeking about 26 court orders, including for the quashing of the compulsory acquisition of the land.

The GLC also wants the court to declare that the compulsory acquisition was an abuse of power, made in bad faith, tainted with procedural impropriety and breached both the Federal Constitution and the Land Acquisition Act.

SDP also wants the court to freeze all actions relating to the compulsory acquisition of the land until there is a final decision on this lawsuit, in order to maintain status quo on the land.

SDP today also announced on Bursa Malaysia that it had filed the lawsuit, saying: "The Company is advised by its solicitors that it has strong grounds for this action to protect its assets.”