What was supposed to be an effort to promote the image of Barisan Nasional (BN) ahead of a general election has led to a RM546 million suit against the ruling coalition.

In one of the larger suits against a political coalition, Pentas Permata Sdn Bhd of Shah Alam is suing BN for breach of contract.

It is the second company to take legal action in relation to election paraphernalia.

Last year, Elegant Advisory Sdn Bhd took Umno to court to recover RM218 million for campaign materials used in the 2004 general election.

The Kuala Lumpur High Court dismissed the claim, but the company has filed an appeal.

Pentas Permata claimed that it had proposed the promotional campaign on Aug 30, 2005 and subsequently entered into an agreement with BN on Jan 5, 2006, to put up 3,222 billboards nationwide.

BN was required to co-operate with Pentas Permata by providing information for the billboards.

According to the company's amended statement of claim dated Dec 7 last year, BN was also required to cooperate with the company to secure strategic locations for the billboards.

NONE Pentas Permata, located at Plaza Masalam, claimed that it worked tirelessly and incurred costs in designing the billboards, identifying sites and apply for the relevant permits to put these up.

On Dec 23, 2006, it wrote to BN requesting help in obtaining approvals from the Kuala Lumpur, Johor Bahru and Kuantan local authorities.

However, it said BN refused to render assistance, and also failed to provide help in securing the required plots.

On Feb 2, 2007, BN terminated the contract. This, Pentas Permata alleged, as done wrongfully as BN was required to provide a six-month period of notice from the date of the agreement signed on Jan 5, 2006 to terminate the contract.

Pentas Permata claimed it had suffered losses as it was supposed to generate profits by charging those placing advertisements on the billboards, alongside the messages promoting BN.

Hence, it is now seeking special damages of RM546 million, in addition to general costs from the court.

BN: Company not entitled to proceeds

BN in its statement of defence claimed that the terms of the agreement are clear in that Pentas Permata was only entitled to sell advertisements, and not to benefit from the proceeds.

It also claimed there were other provisions for BN to terminate the agreement, apart from that cited by the company.

BN also claimed the letter dated Dec 23, 2006, seeking its help to obtain approvals from the three local authorities was just a ploy to explain its delay. The coalition also claimed the letter was written after it gave notice of termination dated Nov 30, 2006.

The coalition alleged it was not responsible for securing strategic locations for the billboards, and that it was wrong of the company to put forward this notion.

It also claimed that it was never asked by the company to support the applications. BN also claimed Pentas Permata was not entitled to future earnings.

BN further said the termination was a result of the company not showing much progress on its work, based on the agreement. This was stated in the BN's letter of Nov 30, 2006.

It maintained that the termination was valid as the company had failed to discharge its duties.

High Court Deputy Registrar Nur Yusliana Yusoff yesterday fixed Jan 26 for final case management to determine the trial dates.