Allegations of "conspiracy, jealousy and sabotage" involving high-profile government figures have been levelled by Libyan-born entrepreneur Dr Sadeg Mustafa in challenging a police order that put his company InventQJaya Sdn Bhd - an incubator of cutting-edge technology - in receivership.

He made the claims in several court documents filed with the Kuala Lumpur High Court on April 1 to quash the seizure order under Section 52(1) of the Anti-Money Laundering Act 2001 (AMLA) that was issued and executed by the police on Feb 24.

His lawyer Sankara Nair ( photo, right ) told a press conference today that Sadeg believes that the order, which also stripped him off all his powers, authority and privileges as InventQjaya's chairperson and CEO, was made in bad faith.

"We filed an application with the KL High Court seeking a judicial review, inter alia , an order to quash the police order of seizure and to restore our client's legal rights," he said.

He claimed the police's action to invoke the "draconian provisions" of AMLA - which he described as the 'financial ISA' - was arbitrary and harsh. The law allowed the police to seize documents and appoint Pricewaterhousecooper as administrator.

"It would have been prudent for the authorities, for the purposes of transparency and due process, to have at least made an application to court for an order of seizure which would have meant having to provide cogent reasons to the court," he said.

Sankara said the ex-parte application - which names the inspector-general of police and the home minister as respondents - also seeks an order to prohibit and prevent any further action by the government that would be detrimental to Sadeg and InventQjaya.

"We are also asking for a stay order with regards to the company's business until final determination of the application is made," he added.

Allegations denied

In January 2004, US-based Sadeg set up InventQjaya in Cyberjaya - Malaysia's version of Silicon Valley that was initiated during the administration of former prime minister Dr Mahathir Mohamad - after receiving a soft loan of RM437 million to be drawn down in four tranches.

He had been invited by Mahathir who was impressed with his 'InventQbation Business Model' to help under-developed countries achieve technology sovereignty.

In February this year, allegations of fraud involving RM50 million and mismanagement were reported in the media, followed by the police raid on the premises.

Following this, the government took action to freeze the finances of

InventQjaya in the bid to safeguard the remaining RM60 million of a RM228 million loan it disbursed and to protect its other long-term investment in the company.

Sadeg has since held a press conference denying all allegations and stating that he had executed all his obligations under the loan agreement by transferring eight technologies and more than 600 patents; hired and trained more than 140 scientists and technologists; and conceived 53 new inventions in Malaysia.

In his affidavit filed on March 30, Sadeg claimed that he had carried his tasks professionally, ethically and with the highest standards, and these virtues had made him the target of several disgruntled ex-employees who were terminated due to low performance and low ethics such as corruption, theft and document forgery.

He claimed that everything went smoothly until Mahathir stepped down in November 2003.

"With change in the leadership of the country, my problems began. There are certain sectors of the government that have started to sabotage my efforts and certain people want to dismantle what Mahathir did and a campaign has been waged for many months to that end."

He also alleged that "those who wanted to destroy him and the company" had used a police report lodged by InventQjaya's former chief financial officer Sushamma Gokhale who alleged that he (Sadeg) had committed criminal breach of trust.

He said that he would reveal the identity of the "saboteurs" when the matter is tried in court.

"I have been an innocent victim of a personal campaign led by certain disgruntled high-level personalities in the Ministry of Finance and Ministry of Science, Technology and Innovation and the Malaysian government (whom I shall name later at the hearing in court), who waited for Mahathir's retirement to get at the company and me, and other motives," he said in the affidavit.

'Unprecedented action'

Sadeg also claimed the police actions were "propagated or motivated" by the same high-level personalities.

"It is clear and obvious from the manner in which the police acted in conducting their investigations that they have acted arbitrarily and mala fide (bad faith) when they so readily invoked the AMLA and particularly when they issued the seizure order when it is not the norm in police practice. Seizing an incorporated company by the police is unprecedented in Malaysia," he said.

He also claimed that it was inconceivable that the police had sufficient evidence to act in such a drastic manner when they had not even bothered to record any evidence from him although they had every opportunity to do so.

He alleged that the police acted unlawfully and unconstitutionally in wilfully and wrongfully invoking AMLA, saying this is ultra vires to Article 13 of the constitution which states that no person shall be deprived of property.

Sadeg also said the AMLA order had not only caused "irreparable damage" to InventQjaya but also to his US-based company Reveo Inc USA and his other operations in India and other countries.

"Millions of ringgit remain owed to Raveo Inc USA by the said company (InventQjaya) and the ripple effect from such has resulted in lay-offs, and the curtailment and/or shutdown of certain of my worldwide operations and potential bankruptcy," he claimed.