One of three former directors who received payments totalling RM38.7 million before resigning from Malaysia's Technology Resources Industries Bhd (TRI) Thursday defended the payments as "legal".

TRI, Malaysia's second top mobile phone company, is demanding repayment of the amount, which includes a RM23.4 million payment to former chairman and chief executive Tajudin Ramli.

Former executive director Lim Kheng Yew, who was paid RM5.8 million, told AFP 's financial wire service AFX-Asia that he was seeking legal advice on the matter, but added: "As far as I am concerned, the payment is legally paid to us.

"The full board of TRI approved the payments on July 3. It is in my employment contract. Why did I work 16 hours a day for the past two and a half years? It is one of the conditions in my contract and I believe the same condition is in the contracts of Tan Sri (Tajudin) and his brother."

TRI, now controlled by Telekom Malaysia, said the payments are expected to have a financial impact on the performance of the company this year.

Negative development

"This is a negative development for TRI. As the company said, (this) will have an impact on its earnings this year. It will slash my net profit forecast of RM311 million by 12 percent," a telecoms analyst with a local brokerage said.

"I don't think the market would normally have been too concerned on the 'golden handshake' payout but this is a really huge sum," the analyst said.

The payments were made to Tajudin, Lim Kheng Yew and Bistamam Ramli on July 3 before the appointment of new directors comprising Telekom Malaysia's nominees.

Tajudin and Telekom Malaysia were involved in a boardroom tussle after the latter initially failed to secure board representation despite holding a 31.25 percent stake in TRI.

TRI said the new board only became aware of the payments after the minutes from the July 3 directors' meeting were presented to the new board for confirmation, who then sought legal advice on the matter. AFP