KUALA LUMPUR, Aug 21 — Businessman Datuk Seri Khalid Mohamad Jiwa said it came as a "big surprise” to him too when Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi voluntarily offered to hand over RM10 million to Khalid’s friend’s company Armada Holdings Sdn Bhd as paid-up capital in 2015 to bid for a contract from Tenaga Nasional Berhad (TNB).

Khalid, the 64-year-old husband of singer Datuk Seri Siti Nurhaliza and better known as Datuk K, however, insisted that this RM10 million given through Zahid’s charitable foundation Yayasan Akalbudi was not a loan to Armada Holdings, since the usual features of a loan such as collateral, interest rate and repayment date were missing.

Khalid, who was testifying as the eighth defence witness for Zahid in a trial involving 47 charges, insisted that the RM10 million was an investment by Yayasan Akalbudi in Armada Holdings.

Khalid, who was formerly a banker, said his friend and business partner Datuk Wasi Khan @ Wasiyu Zama Israr did not go to the banks to ask for a loan in order to raise the RM10 million paid-up capital for Armada Holdings as banks would not give out such loans. TNB had required companies to have RM10 million in paid-up capital to qualify to bid for the tender to supply coal.

Knowing that it was futile to seek the banks’ help, Khalid said he had arranged a meeting with Zahid at the Home Ministry’s Putrajaya office at Wasi’s request and claimed that they did not go there with the intention of asking for money or to borrow money from Zahid.

Khalid said he had gone as a friend to ask for then home minister and then DPM Zahid to help ask TNB to reduce the paid-up capital requirement to RM5 million for Armada, but the latter had declined to speak to TNB on the matter as it was out of his jurisdiction.

"I never said in my statement that I went to meet Datuk Seri Zahid to get RM10 million. It is a big surprise to me also. I went to meet Datuk Seri Zahid to ask for help for the paid-up capital to enable participation in the tender, not to borrow money,” he said, adding that Zahid had offered the RM10 million to enable Armada to join the tender process and also to not have to ask TNB to help.

"He doesn’t want to ask TNB to help. That is a matter that I think he was not comfortable doing. He offered his money,” Khalid said.

Khalid said it did not cross his mind to reject the offer of the RM10 million funds by Zahid, saying: "Firstly, Datuk Seri Zahid is an ex-corporate figure. He is also an entrepreneur, he is also an ex-banker. I know him from Kretam Holdings Berhad before this. RM10 million to me is a lot, not to Datuk Seri Zahid. Secondly, Datuk Seri Zahid sees that this project is a viable project, he saw an opportunity there if investment or help is given, there will be a return to his assistance.”

Asked by deputy public prosecutor Datuk Mohd Dusuki Mokhtar on where the RM10 million given by Zahid would come, Khalid said that he believed Zahid as a corporate figure would be able to raise the money through various methods, whether from his own sources or from his friends and that he could ask anyone for help if he wanted to provide the RM10 million aid.

Khalid confirmed that he did not ask Zahid where the RM10 million would come from, and said Zahid too did not mention the source of the money and only asked Wasi to meet him at Parliament.

Khalid said he did not know then that the RM10 million was from Yayasan Akalbudi, and that he only discovered this after Wasi had later gone to Zahid’s office in Parliament to take the RM10 million cheque and informed him that the cheque with funds from Yayasan Akalbudi had been banked in.

Asked for his response when he was informed by Wasi that the RM10 million from Yayasan Akalbudi, Khalid replied "Syukur Alhamdulillah” and confirmed that he did not show any shock (terkejut).

Asked by Zahid’s lawyer Datuk Ahmad Zaidi Zainal on the difference between a loan and an investment since Khalid had insisted that the RM10 million is an investment, the businessman replied that banks would usually impose an interest rate for loans but that Zahid did not give any interest rate when passing the RM10 million over.

"Secondly, the duration when the loan has to be repaid, in this matter there was no period fixed for repayment. In this case, no collateral was imposed. Fourth, guarantor, it’s just merely, me as the person who is trusted who was given that investment.

"If it was a loan, that means Yayasan Akalbudi had made a very high risk action — no repayment period, no interest rate fixed, no collateral, the risk is too high. It’s impossible that someone like Datuk Seri Zahid as a former bank chairman will do such work,” Khalid said, claiming that the RM10 million was an investment in the form of an "advance” to Armada Holdings with the belief and hope that the investment will bear returns.

"May be short or long term, but all investments would want high returns in a short time, this was hoped for by Datuk Seri Zahid,” he said.

While saying that Zahid did not voice his intentions, Khalid claimed to understand as his friend that the RM10 million is a big sum and that it should have returns, insisting that this was why it was not a loan.

Yayasan Akalbudi had via a November 16, 2015 cheque issued RM10 million for Armada Holdings, but the Companies Commission of Malaysia’s records shown in court today showed that the company was only established on December 3, 2015 while the cheque was banked into Armada’s bank account on December 7, 2015.

Armada on February 12, 2016 issued two cheques — namely RM10 million and a RM69,722.65 — to Yayasan Akalbudi, with Khalid preferring to describe RM69,722.65 as a "return” on the purported investment and disagreeing that it was an "interest” and disagreeing with Dusuki’s description of it as an "interest” for a loan.

Previously Wasi as the 21st prosecution witness had confirmed that the RM10 million cheque from Yayasan Akalbudi was given without any letter of agreement between him and Zahid as it was based on trust and Armada’s potential and Zahid’s friendship with Khalid, and that there was no "black-and-white” letter signed between Armada Holdings and Yayasan Akalbudi for the repayment of the RM10 million.

Earlier when Dusuki suggested that Zahid did not do any due diligence when he gave the RM10 million in 2015 to Wasi’s Armada Holdings, Khalid said that this was because he was acting as a guarantor.

"Because he had a guarantor, the guarantor is me, he didn’t give to Datuk Wasi without any reason. He was not giving to Datuk Wasi, he gave it to me indirectly, that’s what it means. I gave a guarantee that the money will be safe and sound and be returned to him without fail, and true enough, after two months we gave back,” he said.

When Dusuki said there was no document for this, Khalid said there are matters where it is better to have no documents as compared to having documents that may be disputed, adding: "So Datuk Seri Zahid, his trust is more important than document.”

Khalid completed his testimony this morning.

Zahid’s trial before judge Datuk Collin Lawrence Sequerah will resume at the High Court in Kuala Lumpur this afternoon, with a defence witness from Bagan Datuk, Perak expected to be called.

Zahid, who is also Umno president and Barisan Nasional chairman, is facing 47 charges in this trial.

The 47 charges are namely, 12 counts of criminal breach of trust in relation to over RM31 million of charitable foundation Yayasan Akalbudi’s funds, 27 counts of money laundering, and eight counts of bribery charges of over RM21.25 million in alleged bribes.

The 12 counts of criminal breach of trust is in relation to the alleged misappropriation of Yayasan Akalbudi funds, namely RM1.3 million via 43 cheques for his and his wife’s credit card bills; RM107,509.55 via three cheques for vehicle insurance and road tax for 20 privately-owned vehicles; a RM1.3 million cheque to the police’s football association; a RM10 million cheque for a loan to Armada Holdings Sdn Bhd; RM360,000 via two cheques to political consultancy firm TS Consultancy & Resources; and over RM17.9 million of funds transferred from Yayasan Akalbudi to law firm Lewis & Co.

Yayasan Akalbudi was founded with the purported objectives of receiving and administering funds for the eradication of poverty and enhancing the welfare of the poor.