The Kuantan High Court has ordered Pahang Menteri Besar Adnan Yaakob to pay logging company Seruan Gemilang Makmur Sdn Bhd (SGM) RM63 million within 14 days from today.

Justice Abd Halim Aman made the order after allowing the company's application for a writ of mandamus with cost.

He said the mandamus action was filed following the state government's failure to pay the judgment sum granted since May 25, 2007 and the applicant having exhausted all legal avenues.

"This kind of stance reflects the state government's refusal to comply with statutory obligations and thus, unreasonably burdening the people in general because it will burden the state government in terms of daily interest," he was quoted as saying by Bernama .

He also said the respondent's application to set aside the mandamus action with a written argument that the company had wrongly named menteri besar as the respondent was defective.

"The menteri besar is the right and qualified person to be named as the respondent because in Pahang and any other states except Sabah and Sarawak, the post of state finance minister does not exist," he said.

He said Article 41(1) of the Pahang government constitution also states that the menteri besar has the authority and is competent to settle a payment sum from the State Consolidated Fund.

SGM was represented by counsel Rajoo D Moothy and Richard Bong Chong Fook while Shafie Abdullah acted for Pahang MB Adnan.

Breach of agreement

On Dec 9, 2002, the company filed a suit against the Pahang government and State Forestry director for a breach of agreement pertaining to the extraction of timber from a 4,000-hectare concession area in Mukim Bebar, Pekan, and won.

nenasi umno logging location On Sept 17 last year, the Pahang government was ordered to pay RM60 million to the company after it failed in its final effort at the Federal Court to obtain leave to appeal.

With this, the Federal Court reaffirmed the original decision of the Kuantan High Court on May 25, 2007 that the Pahang government was to pay the company RM37,127,471.60 with eight percent interest per annum from Dec 31, 2000.

The logging company filed the mandamus application on Oct 15 last year, saying that it had demanded the judgment sum with interest through a solicitor's letter on Aug 27 last year and had furnished an endorsement letter under Section 33 of the Government Proceedings Act 1956 on April 7 the same year, but did not receive any payment.

Meanwhile, state legal adviser Mat Zara'Ai Alias said his office would apply for a stay of execution of today's order tomorrow.

A judicial review application had been filed against the Federal Court's Sept 17 decision, he said.

‘Hidden agreement’ in deal?

The court decision today involved a logging scam highlighted by Malaysiakini in a series of reports on a 10,000-acre plot of land - about 40sq km in size - near Pekan which was awarded to Umno Pahang in 1998.

The land was given to the party by the state government helmed by then Pahang menteri besar and Umno state chief Khalid Yaacob ostensibly for oil palm plantation.

To make the deal aboveboard, the party was required to pay a RM4.8 million land premium in order for them to start logging activities but Pahang Umno did not make the payment.

Despite that the land being still technically owned by the state government, the state Umno had gone ahead to clear the plot.

In 2000, Pahang Umno conferred the SGM with the exclusive right to cut, extract and sell the logs in the area. In return, the company paid the party a mere RM50,000 for the deal, which is believed to be worth millions.

Industry experts that Malaysiakini interviewed at the time had said they were puzzled by the extremely low transfer rate and questioned if there was any ‘hidden agreement’ between the two parties.

Logging scam: Tip of the iceberg

nenasi umno logging before and after Malaysiakini , in one of its reports five years ago, show satellite photos of the huge plot in the forest reserve being stripped completely bare ( right ).

The concession was believed to be the tip of the iceberg of lucrative logging concessions granted by the state to Pahang Umno as a means to raise funds for the ruling party.

However, the Pahang Umno-SGM relationship soured later when the state forestry department refused to renew the company’s logging licence.

In 2002, SGM filed a suit against the Pahang government and the state forestry director seeking RM31 million in damages for breaching the logging concession.

In its statement of claim, SGM has argued that the state forestry had only allowed the company to log an area of 7,000 acres - out of the 10,000 acres which was approved - and the remaining area was given to several third parties to log.

Responding on that, the state government and its forestry department had said that SGM was only given a licence to log 7,000 acres because they found that the company was not interested in logging the remaining 3,000 acres.

The Kuantan High Court subsequently made the ruling in favour of SGM, ordering the defendants to pay the company RM37 million after it found that the state forestry director was negligent in refusing to let the company to log.

Earlier report

Satellite photos confirm widespread logging on Umno’s land