The government wants the Kuala Lumpur High Court to strike out Libyan-born Dr Sadeg Faris' bid to challenge an order which placed his company InventQJaya Sdn Bhd - an incubator cutting -edge technology - in receivership.

Senior Federal Counsel Azizah Nawawi acting on behalf of the police and the home ministry - the named respondents - told the court today that a preliminary objection seeking Sadeg's application to be struck off has been filed.

Submitting to the court a copy of her written arguments, Azizah said she had also served her written arguments to Sadeg's counsel and solicitor Sulaiman Abdullah and Sankara Nair this morning.

Sulaiman then sought for a postponement stating that he needed more time to study the written submissions and the bundle of authorities that came with it.

Justice Raus Sharif then set Nov 25 for hearing.

Allegations of fraud

Sadeg, who is a US citizen, had filed an ex-parte application to set aside the seizure order. He is also seeking a stay order to prohibit any further action by the authorities that would be detrimental to him and the company.

In January 2004, he set-up InventQJaya in Cyberjaya - upon the invitation of former premier Dr Mahathir Mohamad - after receiving a soft loan of RM437 million. From this amount, RM228 million was disbursed.

In February this year, allegations of fraud in the company involving some RM50 million and mismanagement were reported in the media, leading the police to raid the premises.

Following this, the government took action to freeze the finances of InventQJaya in a bid to safeguard the remaining RM60 million loan and to protect its other long-term investments in the company.

Sadeg denied the allegations stating that he had executed 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, he claimed that his professionalism at work did not go down well with some former employees who were terminated due to poor performance and work ethics such as corruption, theft and document forgery.

According to Sadeq, things were smooth until Mahathir stepped down in November 2003.

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

Statutory function

In her written submissions, Azizah argued that the seizure order (by the government) cannot be reviewed (by the court) as the authorities did not make a decision but merely performed a statutory function when it ordered the seizure of InventQJaya.

She said the seizure order which was made under Section 52(1) of the Anti-Money Laundering Act allows the authorities to seize a business that is being carried on by or on behalf of any person against whom prosecution for an offence is intended to be commenced.

In this case, she said, there is no dispute that the business of InventQJaya is carried out by Sadeg - as the managing director and chief executive officer - and that the authorities had declared their intention to prosecute him under Section 4(1) of the act.

She also submitted that the act of seizure was not open to review under Order 53 of the Rules of the High Court 1980 - under which Sadeg's application was made because it was not an administrative decision.

She said that the enforcement agencies were merely performing a statutory function as provided to them in carrying out investigations under the act.

"Section 52 clearly imposed to the enforcement agencies a statutory duty to seize such business when prosecution for an offence under subsection 4(1) is intended to commence against Dr Sadeg," she added.

Azizah said the order and act of seizure was not open to review because it was also not a final determination of rights between Sadeg and the enforcement agencies.

She argued that the order was merely to secure and preserve the evidence for the purpose of criminal prosecution, adding that the authorities were not acting in a judicial or quasi judicial manner in making a determination.

Abuse of judicial process

The lawyer also argued that it would be against the interest of the public if such an order was allowed to be reviewed and claimed that if all decisions and actions of the authorities were open to a court's review, the government machinery might cease to function.

"If the order of the enforcement agencies is (open to review) it will lead to a floodgate where all decisions and actions of the enforcement agencies in securing evidence for the purposes of criminal investigations and prosecutions will be subject to the scrutiny of the courts and this is clearly against public interest and policies," she added.

She said if the court allowed Sadeg's leave application, it will only frustrate the criminal prosecution of an offence and also cause chaos and confusion as it allows the civil court to usurp the functions and jurisdictions of criminal courts.

She also said that the application was an abuse of the court process as Sadeg was trying to frustrate the criminal prosecution.

Met outside the court later, Sankara clarified that to date, his client has never been summoned by the authorities to give a statement for the purpose of prosecution under Amla.

"There has been no request from the authorities to my client for a statement for the purpose of prosecution.

"Of course Dr Sadeg is willing to cooperate with the authorities but so far apart from the seizure, there has been nothing," he added.