Former Pos Malaysia Berhad (PMB) non-executive chairman Adam Kadir was prematurely removed from his post in a breach of contract, his lawyer told the High Court in Kuala Lumpur today.

Mohamed Hanipa Maidin said the Minister of Finance signed letters that were a binding contract to allow Adam to hold office until Feb 28, 2009.

By a letter dated Feb 17, 2005, Adam was appointed director and chairman of Pos Malaysia Berhad for a two-year term, and by a letter dated March 25, 2008, he was informed that his appointment as chairman would be renewed for one year from March 1, 2008, Mohamed Hanipa said.

pos malaysia 170305 pos malaysia counters However, he said, by a letter dated May 23, 2008, Adam was informed that a  new non-executive chairman of PMB would be appointed on June 1, 2008.

By removing Adam from the post, Mohamed Hanipa said, the minister had breached the contract.

Mohamed Hanipa was submitting during the hearing of Adam's suit against the Minister of Finance and the government and Adam’s suit against Khazanah Nasional Berhad managing director Azman Mokhtar.

The two suits were heard together before High Court Judicial Commissioner Dr Prasad Sandosham Abraham.

Senior federal counsel Shamsul Bolhassan, representing the Minister of Finance and the government, replied that there was no contract between Adam and the Minister of Finance as he had signed the letter of appointment in his capacity as the Minister of Finance Incorporated, the special shareholder of Pos Malaysia Berhad.

“It is clear that the Minister of Finance Inc is a corporation by itself. It is a separate legal entity and distinct from the Minister of Finance. The Minister of Finance and the government have no power or authority to appoint the plaintiff as non-executive chairman. It is the MOF Inc. Clearly, there cannot be any contract between the plaintiff and MOF in this case,” he said.

He submitted that Adam was wrong in law when he decided to name MOF and the government rather than the MOF Inc, as in law, the two are different entities.

‘Letter had no legal effect’

Shamsul said the letter dated May 23, 2008 sent by the Special Shareholder (MOF Inc), thanking Adam for his service and informing him of the appointment of the new chairman, had no legal effect to remove him as chairman.

“The plaintiff made clear his intention to abide by the Special Shareholder’s letter and had voluntarily resigned from his post as chairman,” he said.

On Oct 22, last year, Adam, 69, filed a legal action against the Minister of Finance and the government for breach of contract of his chairmanship, seeking a declaration that the termination of his contract or dismissal as non-executive chairman of the company was null and void.

In the suit against Azman filed on Nov 4 last year, Adam alleged that due to unlawful interference by Azman, the government decided to terminate his contract through two letters signed by the minister dated May 23 and May 26, 2008 whereas his appointment was supposed to end only on Feb 28, 2009.

In his submission today, Nitin Nadkarni for Azman said that Adam should not sue Azman as there was no contract between Adam and the shareholder. (Khazanah is the biggest shareholder of PMB.)

“The contract should be between the director and the company,” he said.

Submissions continue tomorrow.

- Bernama