Tycoon Tajudin Ramli lost a court battle today to bar the national asset management company from selling his shares in Technology Resources Industries (TRI).

The move could signal the collapse of the business empire of Tajudin, who last year bailed out of Malaysia Airlines and may now lose control of TRI, which owns Malaysia's second-largest cellular phone operator Celcom.

His shares in TRI were pledged as collateral for earlier loans - since taken over by the asset management company Pengurusan Danaharta - from financial institutions after they turned non-performing.

Tajudin, one of Malaysia's biggest individual debtors with loans reportedly worth about RM1 billion, took the business community by surprise when he filed for a court injunction last week against Danaharta.

The move to prevent the sale of his shares came amid talk Telekom Malaysia was keen to buy the TRI shares from Danaharta, which was set up in 1998 to mop up bad debts.

"The application was dismissed," Danaharta chief counsel Tommy Thomas told reporters after High Court judge Vincent Ng Kim Khoay delivered the verdict in chambers today after a five-hour hearing yesterday.

"I am entirely satisfied that the injunction sought ought not be granted and I dismissed the plaintiff's application with costs," justice Ng said in a 31-page verdict.

No signs of surrendering

But Tajudin, who is a close associate of former finance minister Daim Zainuddin, showed no signs of surrendering.

His lawyer Ong Chee Kwan said they would appeal against the court decision and had a month to do so. He said the injunction was filed on the basis that Tajudin has not defaulted on his loan obligation.

"We say we are not in default," Ong added.

Tajudin's legal wrangle with Danaharta is closely watched not only because his control of TRI was at stake but also because Danaharta's immunity from litigation was being questioned.

The court battle also comes amid a corporate exercise by TRI to restructure RM3.8 billion in debts.

The former corporate high-flyer is currently at the centre of a police probe into alleged management irregularities at Malaysia Airlines, where he was formerly chairman and a key shareholder.

Ng, in his verdict, said Tajudin's failure to subscribe to the TRI rights issue "reveals that the plaintiff has no real interest in participating in TRI as a company."

30-day period

In an immediate reaction, Danaharta confirmed Friday it had issued a notice of default to Tajudin and Arah Murni on Wednesday for failing to pay 130 million ringgit to subscribe to the rights issue.

It said Tajudin has been given 30 days to rectify the default, failing which it would be "free to look at other recovery options."

"In any event, Danaharta will take whatever steps it deems necessary to safeguard the value of its collateral," it said in a statement.