KUALA LUMPUR, Oct 13 — The High Court here today ordered National Feedlot Corporation Sdn Bhd (NFCorp) to repay the government RM33.7 million in connection with the National Feedlot Centre project in Gemas, Negeri Sembilan.

In allowing the suit by the government against NFCorp and 10 others, Judge Anand Ponnudurai ordered the company, which was named as the first defendant, to repay the government RM33,743,591.37 being the unutilised amount loaned to it.

"The plaintiff (government) is entitled to the RM86.9 million seized from the defendants which is currently held by the Account General in escrow,” he said.

Judge Anand also ordered all the 11 defendants to return land in Gemas, Putrajaya and One Menerung here, which were purchased with the loan, to the government which is the beneficial owner of the properties.

However, the judge also allowed the defendants’ counterclaim and ordered the government to pay RM10,000 in nominal damages to them.

In the suit, the government also named Datuk Seri Dr Mohamad Salleh Ismail, who is NFCorp executive chairman and husband of former Women, Family and Community Development Minister Tan Sri Shahrizat Abdul Jalil and their three children, Wan Shahinur Izran, Wan Shahinur Izmir and Wan Izzana Fatimah Zabedah, as the second to the fifth defendant.

The other defendants are six companies controlled by Mohamad Salleh’s family, namely, National Meat & Livestock Corporation Sdn Bhd, Real Food Corporation Sdn Bhd, Meatworks Corporation Sdn Bhd, Agroscience Industries Sdn Bhd, Asian Bioscience Corporation Sdn Bhd, and Technology Imageware (M) Sdn Bhd.

In the statement of claim, the government stated it had signed a loan agreement totalling RM250 million with NFC on December 6, 2007, to finance the costs of establishing and operating a National Feedlot Centre in Gemas as part of its policy to develop and increase beef production.

The loan was disbursed in three tranches and Mohamad Salleh’s family was claimed to have made 10 withdrawals amounting to RM180.51 million from January 24, 2008, to January 3, 2011.

Judge Anand in his judgment said there was no proof that the loans had been misused by the defendants.

"I find insufficient facts particularised to support such a plea that the loan funds were fraudulently utilised and transferred. As seen earlier, I have found that the purchases of the properties were allowed and did not constitute a breach of the loan facility agreement (LFA).

"I also find that the plaintiff (government) has failed to prove any form of dishonesty by the defendants,” he said.

In not allowing the government’s full claim for RM253.6 million in loan for the project, Judge Anand said the plaintiff had failed to put its case of the alleged conspiracy, fraud, and fraudulent breach of trust of the loan monies to the defendants’ witnesses during their cross-examination.

"As such, I find this to be tantamount to an abandonment of the plaintiff’s pleaded case of the alleged conspiracy, fraud, and fraudulent breach of trust of the loan sum.

"Having considered all the above and in the upshot, I am certainly not persuaded that the plaintiff has come anywhere close to proving any conspiracy to defraud the plaintiff by the Salleh family and companies controlled by them,” he added.

The proceeding was attended by senior federal counsel Nurhafizza Azizan, representing the government, and lawyer Datuk K. Kirubakaran representing all defendants.

Meanwhile, in a joint statement, Kirubakaran and another counsel of the defendant, Datuk Seri Rajan Navaratnam stated that in the case of the government against NFCorp and 10 other defendants, the High Court found that the government had failed to prove its case against the defendants.

"The Court stated that there was no wrongful use of the loan sum and no breach of fiduciary duties by the defendants. The court fully exonerated the Salleh family and the defendants from all allegations of misappropriation.

"The Court also found the government had breached the Implementation Agreement when they failed to construct the Export Quality Abattoir and breached the Loan Agreement when they unlawfully terminated it,” both counsels said.

According to both counsels, the High Court judge stated that it was not unlawful for the defendant to utilise part of the loan sum to invest in properties in the name of the company.

"NFCorp was not in default of the Loan Agreement and the Implementation Agreement in this regard. The court ordered that the investment properties be transferred to the government. The trial judge also found that the project targets were not met because the government of Malaysia failed to build the Export Quality Abattoir.

"However, because the project targets were not met, the judge decided that the unutilised loan sum in the amount of RM33 million is to be returned by NFCorp to the government. The court also allows for NFCorp’s counterclaims in respect of government’s breach of agreement and allowed for nominal damages,” the counsels added. — Bernama

*An earlier version of this story contained an error which has since been corrected.