The US$250,000 "sales allowance" involved in a aircraft procurement of Sarawak state-owned aviation company Hornbill Skyways Sdn Bhd became the bone of contention in a hearing at Kuala Lumpur industrial court today.

mohamed asharat 220910 The company's former general manager Mohamed Asharat Ramzan Ali ( right ) - the claimant in this case who alleges that he was unlawfully dismissed by the company - claimed that it was a commission which amounted to an irregularity.

On the other hand, Hornbill Skyways' counsel Prakash Menon argued that it was a discount for the purchase.

Prakash's argument hinged on a aircraft manufacturer's document which stated it was "sales allowance" - a discount deducted from the purchase price.

Although Asharat, 48, agreed with Prakash that the document did not explicitly state the amount as commission, the legal opinion given by Hornbill Skyways' legal advisor Polycarp Teo asserted that it was commission.

"I base my opinion on Teo's opinion... based on this document, it showed the USD250,000 was still in the purchase price," he said, referring to Teo's written legal opinion which had been tendered to the court.

"This is standard worldwide practice. 'Sales allowance' in aircraft purchase is referred to as commission," he added.

Vast interior

Hornbill Skyways began as a private company in 1977 to service the vast interior of Sarawak.

It was taken over by the state government through acquisition of shares by Yayasan Sarawak and Sarawak Timber Industry Development Corporation (STIDC) eight years later.

The company hit the headlines several times when three helicopter crashes occurred in July 2004, Sept 2004 and July 2005 resulting in the death of 14 people, including some VIPs and a Sarawak state minister.

Earlier Prakash had poked holes at the series of irregularities alleged by Asharat yesterday relating to several multi-million aircraft procurements by Hornbill Skyways.

Asharat claimed he was unlawfully dismissed by Hornbill Skyways in 2005 after he had uncovered the irregularities but Prakash attempted to establish that the former's testimony was a series of "wild baseless allegations" intended to sabotage the company after he was sacked.

azlan Among others, he alleged that - in procuring a Bell 206 helicopter - the broker of the deal, Abdul Mutalib Abdullah, had put a scrapped aircraft as collateral against the deposit required by Hornbill Skyways.

"He valued his aircraft at US$80,000 when the aircraft 9M-FAB had crashed on Oct 7, 1999 and had been scrapped," read his witness statement.

Prakash today zeroed in on this, demanding that Asharat produces evidence.

He argued that the placement of a scrapped chopper as collateral was proper because it had been approved by the board of directors.

When Asharat failed to produce evidence, he dragged in other "irregularities". He said the company linked to Mutalib could not be found in a company search; that no tender was called, with Mutalib's company being the only choice; and that there was no closing document for the escrow account for the deal.

'Unsubtantiated opinion'

Under aggressive cross-examination by Prakash, Asharat conceded that no document had explicitly stated that such actions are irregular.

"Looking at whatever document, there is no basis to your conclusion. It is just your opinion which is unsubstantiated," Prakash stressed.

However Asharat maintained his stand that these are irregularities.

Prakash also pointed out that the decision to procure the helicopter had been made by the board of directors in 2004 before Asharat was hired on March 15, 2005.

NONE He said Asharat was not qualified to question the decision when he had only been with the company for two months at the time.

Asharat also failed to produce documentary evidence to support his claim that he was told by Hornbill Skyways chairperson Bujang Noor on July 5, 2005, that the Sarawak Chief Minister Abdul Taib Mahmud ( left) wanted him out of the company.

He conceded that he has no documentary proof to substantiate many of his allegations in his witness statement including:

1. The company management was heavily influenced by politics and state affairs.

2. He was asked to eradicate wrongful practices within the company.

3. Bujang had suggested that he writes an appeal letter to Taib after he was sacked.

Taib is the chairperson of STIDC, which is the largest shareholder of Hornbill Skyways.

Prakash further suggested that Asharat had resorted to "racial and religion sentiments" by stating in the appeal letter: 'I am a Malaysian Bumiputera and a fellow Muslim too, and to be treated this way in my own country is indeed inhumane.'

Asharat denied this, insisting "this is an appeal letter".

 

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