The Kuantan High Court today allowed the application by Umno Pahang to set aside an earlier judgement ordering it to pay compensation to logging company Seruan Gemilang Makmur (SGM) Sdn Bhd over a controversial logging concession in the state.

SGM director Syed Ali Badarudin told malaysiakini today that senior assistant registrar Azman Mustapha allowed the application this morning and a date will be fixed for a full trial.

However, the company is given a two-week period to appeal on today's decision. Syed Ali said the company has yet to discuss with their counsel on the appeal.

SGM is represented by Bong & Co while Umno Pahang is represented by Jacob Goldie & Toh.

Affidavit

On July 13, the court ordered Umno Pahang to pay RM70,000 to SGM following the party's failure to renew SGM's logging licence as promised.

The default judgement was granted after the party failed to attend the trial twice. No witness has testified in the case so far.

The company, which accused Umno Pahang of breaching their contract, had claimed RM31 million in damages. It has also filed an appeal against the relatively low damage awarded and this will be heard in the same court next Wednesday.

However it is unclear how today's decision will effect that matter.

Four days after the High Court judgement, Umno Pahang secretary Ahmad Tajudin Sulaiman filed an affidavit claiming that the ruling party was the victim in the botched deal and sought an unspecified amount of counter-compensation.

The logging scam highlighted by malaysiakini centered around 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 Khalil 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 the payment has yet to be settled

In 2000, Umno Pahang conferred SGM with the exclusive right to fell, 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.

Tip of iceberg

Documents in malaysiakini 's possession also revealed that the deal was supported by several high-ranking Umno Pahang officials.

Industry experts were also puzzled by the extremely low transfer rate and questioned if there was any 'hidden agreement' between the two parties.

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

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

It is believed that current Pahang Menteri Besar Adnan Yaakob - who took over from party's rival leader Khalil in 1999 - had refused to have anything to do with the deal, forcing SGM to seek legal redress.

Adnan had denied the party's involvement in the deal while Prime Minister Dr Mahathir Mohamad promised to look into the matter as political parties are not allowed to own any state land.

SGM has lodged a police report against Adnan claiming his denial was in contempt of the court's ruling while opposition leaders have respectively lodged two reports to the Anti-Corruption Agency calling for an investigation on this scandal.