KUALA LUMPUR, May 26 — Datuk Seri Ahmad Zahid Hamidi today denied that the RM6 million in two cheques he personally received from a passport chips supplier’s official in April 2017 were "bribes” to help the company get a contract worth over RM300 million.

The Umno president who is in the dock for corruption insisted that the money was a "political donation” made to him in his capacity as deputy prime minister then, and that it was intended for charity Yayasan Akalbudi’s projects.

In 2017, Ahmad Zahid was both the home minister and the deputy prime minister.

Two of the eight corruption charges see Ahmad Zahid accused of receiving two cheques dated April 25, 2017 — issued by Sarana Kencana Sdn Bhd — for the sum of RM1 million and RM5 million from Datasonic Group Berhad’s then deputy managing director Chew Ben Ben over the appointment of Datasonic Technologies Sdn Bhd (DTSB) as the supplier of 12.5 million Malaysian passport chips for the Immigration Department via direct negotiations with the Home Ministry.

The two cheques totalling RM6 million were issued by Sarana Kencana, where Datasonic Group Berhad’s then chief executive officer Datuk Abu Hanifah Noordin is a shareholder and director.

Abu Hanifah retired from Datasonic Group Berhad on January 31, 2020, while Chew resigned from the same company in March 2021.

"I stress that that cheque is not a reward or bribe from DTSB or anyone,” Ahmad Zahid said twice while testifying in his own defence at the High Court here, referring to the two cheques.

Ahmad Zahid said that Chew had never told the court during this trial that the two cheques worth RM6 million were a bribe, and said both Chew and Abu Hanifah had told the court that the money was not related to the awarding of the contract in 2015 to DTSB.

"I confirm that the cheque paid to Lewis & Co and banked into Lewis & Co’s client account is a political donation to me, who was also the deputy prime minister at that time,” the Bagan Datuk MP said, repeating the same answer in reference to the two cheques.

Lewis & Co is a law firm which Ahmad Zahid’s lawyers have been arguing was acting as a trustee for Yayasan Akalbudi.

"I stress again that the political donation amounting to RM1 million and RM5 million from Datuk Abu Hanifah and/or Chew Ben Ben are not bribes or rewards or gratification for the appointment of Datasonic Technologies Sdn Bhd and/or them to carry out the polycarbonate contract.

"I wish to stress that Datuk Abu Hanifah and/or Chew Ben Ben had confirmed that political donation encompasses amal jariah that would be contributed to Yayasan Akalbudi,” he said, using the Islamic term meaning charity.

Ahmad Zahid was referring to the Yayasan Akalbudi foundation that he had founded, and where he is a trustee and the sole signatory of its cheques.

Asked by his lawyer Datuk Ahmad Zaidi Zainal if he remembered what the RM6 million donation would be used for, Ahmad Zahid said that the construction planned at that time was for an international huffaz centre or a centre for Quran memorisation and for the Masjid Tuminah Hamidi in his Perak parliamentary constituency.

Shown an artist’s impression stated as being for a tahfiz school in Perak for his younger brother’s foundation Yayasan Al-Falah, Ahmad Zahid insisted that this drawing was for the planned international huffaz centre as he noted that the drawing stated the project to be a tahfiz school for 1,000 students.

In explaining why every page of the artist’s impression had stated Yayasan Al-Falah instead of Yayasan Akalbudi, Ahmad Zahid claimed that the two foundations had a collaboration where his foundation Yayasan Akalbudi would provide the money while the other foundation would carry out the projects.

"Funds are channelled by Yayasan Akalbudi to Yayasan Al-Falah, because Yayasan Al-Falah is the developer for the mosque, for the international huffaz centre and several other development projects as Yayasan Akalbudi does not have workforce or professionals to carry out the construction of all these projects. "Therefore, Yayasan Al-Falah had been appointed to be developer for those projects and funds are channelled to Yayasan Al-Falah to carry out the purpose stated in the trust deed or what is stated to be the Memorandum and Articles of Association or other purposes stated in the objective of the establishment of Yayasan Akalbudi,” he said.

Ahmad Zahid said that only the earthworks for this international huffaz centre project had been completed, as work had to be stopped immediately after Yayasan Akalbudi’s funds in the bank were frozen as the contractor did not receive payment for the earthworks and further works.

Previously, the prosecution had questioned why the RM6 million was not given directly to the political coalition Barisan Nasional if it was truly intended to be a political donation, and questioned why it was not given to other ministers but was given to Ahmad Zahid whose ministry was linked to the passport chips supply project that was eventually awarded to DTSB. On the question of whether the cheques were a political or charitable donation, Ahmad Zahid’s lawyers had previously insisted that the RM6 million was not a bribe.

Denial of powers or involvement in giving the RM318m contract

Among other things, Ahmad Zahid today also insisted that he was not the one who had made the decision for DTSB to be awarded the contract in 2015 to supply the chips for Malaysians’ passports, and that he had no power as the home minister to make the final decision for this project.

"I stress that the decision to appoint DTSB is not a decision from me,” he said.

Ahmad Zahid said only the Finance Ministry could award contracts through direct negotiations.

He said companies who want to get a contract through direct negotiation would write to the Finance Ministry and also the secretary-general of the relevant ministry such as the Home Ministry.

He said the process would then see the Home Ministry for example having the role of carrying out technical studies and asking the company to present a proof of concept if criteria were met, and for the Finance Ministry to eventually ask the Home Ministry to carry out price negotiations if the end user such as the Immigration Department was satisfied, and finally with the Finance Ministry to ask the ministry to issue a letter of award.

"In that situation, the letter of award is a letter of award which instructions come from the Finance Ministry. No ministry has the absolute right to award any award to any contractor without the final approval from the Finance Ministry,” he insisted.

Ahmad Zahid confirmed that he had written minutes such as on an August 21, 2014 letter from DTSB to him about the project, where he had directed the Home Ministry’s secretary-general to apply to the Treasury secretary-general to have DTSB’s contract to supply passport chips be extended for another five years.

Ahmad Zahid explained that he had written this minutes as the supply of passports was already at a critical level then at all Immigration Department counters, and as he was personally responsible to the Malaysian public for ensuring sufficient passport supplies.

"Especially during the school holidays when new applicants or applicants who want to renew their passports usually wait in long queues and they will give very negative feedback if the supply by the Immigration Department through these counters do not reach the minimum level, then usually there will be letters to editors or opinion pieces in print media or in electronic media, this will affect the government’s image, especially the Immigration Department and the Home Ministry where I am the minister,” he said, adding that he wanted the matter brought to the Finance Ministry’s attention as it was the ministry that had the power to approve direct negotiations.

He insisted that this minutes is not an order from him to give the project to DTSB and that it was only to direct for work to be carried out according to the procedures of both the Home Ministry and Finance Ministry, stressing that he had not appointed DTSB and that it was the Finance Ministry which had approved the contract.

Ahmad Zahid said that there were on average 150,000 applications for new or renewals of Malaysian passports every month then.

Explaining why he had on October 15, 2015 minuted to the secretary-general of the Home Ministry’s procurement division to have the letter of award quickly issued to DTSB as agreed by the Home Ministry after the company passed a proof of concept, Ahmad Zahid said this was to avoid a shortage in passports as DTSB had informed that the existing stock of passport chips was expected to run out by February or March 2016.

Ahmad Zahid said the letter of award was required to enable the company to borrow money from the bank for the purchase of equipment and materials for the passports.

Asked if a secretary-general could overrule a minister if the minister writes an instruction to give contracts to a company, Ahmad Zahid replied: "Only a minister who is not smart would write such an instruction because ministers must know their jurisdiction in the ministries, as I mentioned a few times in this court, the secretary-general is the controlling officer to any ministry, meaning the administrative power is with the secretary-general and not the minister.”

Based on the minutes of a meeting on October 19, 2015, Ahmad Zahid said that the initial offer for the contract to supply 12.5 million chips was at RM325 million or RM26 per unit, but the sum was later reduced to RM318 million which represented a reduction by RM6.25 million or RM0.50 per unit.

DTSB later received the letter of award for the project on December 15, 2015.

"In conclusion, I wish to state that I do not have the power to make the final decision or finalise the contract for Datasonic Technologies Sdn Bhd as contracts for direct negotiations are under the jurisdiction of the Finance Ministry,” he later said.

He insisted that all procedures were followed for the project’s award to the company and that his role as home minister was only to provide assistance such as giving comments to the Finance Ministry, the Immigration Department and the Home Ministry’s procurement division in the awarding of the project.

Regarding Sarana Kencana which he said is owned by Abu Hanifah and Tan Sri Hashim Mohd Ali, Ahmad Zahid said that he had known Hashim for more than 20 years from his previous armed forces role and not due to his involvement in business as director in several companies including Datasonic Group Berhad.

Ahmad Zahid said Hashim is the brother of Tun Dr Mahathir Mohamad’s wife Tun Dr Siti Hasmah Mohd Ali, and that he was the political secretary to the defence minister when Hashim was then the chief of the defence forces in the Malaysian Armed Forces.

Ahmad Zahid said Abu Hanifah is a certified accountant who was formerly Selayang Umno division chief, adding that the latter is a shareholder in companies and had succeeded in business.

"When his company which originated as a small Sdn Bhd company received aid from the government until it was listed to be Datasonic Group Berhad as testified in court, he felt terhutang budi (indebted) to the government, especially the ruling political party and his donation to any politicians or for politics has nothing to do with any contract given by the government or others,” Ahmad Zahid said, further claiming that Abu Hanifah is known as a philanthropist who had built many houses of worship and carried out charity works.

Ahmad Zahid is standing trial on 47 charges, 12 of them for criminal breach of trust in relation to more than RM31 million of charitable foundation Yayasan Akalbudi’s funds, 27 counts of money laundering, and eight counts of bribery charges over RM21.25 million of alleged bribes.

Ahmad Zahid’s trial before High Court judge Datuk Collin Lawrence Sequerah resumes June 27.