The purchase of properties by National Feedlot Corporation Sdn Bhd (NFC) chairperson Mohd Salleh Ismail does not amount to criminal breach of trust (CBT) as the company's board had approved such transactions, the Kuala Lumpur sessions court heard today.

Defence counsel Muhammad Shafee Abdullah, in his submissions to strike out two CBT charges against Salleh, said minutes of the board's meeting minutes would attest to this.

ramli yusuff asset declare case 120310 muhammad shafee abdullah “The board of directors were informed of such ratification and approved it and this is proven by the minutes of the meeting. This being the case, the principal and beneficiary (NFC) has already ratified Salleh's act and therefore there is no breach of trust.

“However, now it is as if some of the directors have awoken from their sleep in citing there was misappropriation of funds. But the minutes prove otherwise,” said Shafee ( right ).

He said one of the board's directors, A Manaf Hussin who is a Finance Ministry representative, seemed quite learned but had suddenly disagreed with the transaction when questioned by the investigating officer.

Thus, Shafee argued, Manaf was reneging on a decision made by the board by claiming that the purchase of the properties was not legal and amounted to CBT.

Hearsay

Last year, Salleh was charged with CBT by abusing RM9.758 million to purchase two One Menerung condominium units in Bangsar for the National Meat and Livestock Corporation Sdn Bhd (NMLC) when he was a director of NFC.

Salleh is also charged with transferring RM40 million from NFC to NMLC.

azlan NMLC is a company owned by Salleh and his children. NFC is owned by Salleh's family through Agroscience Industries Sdn Bhd.

However, the government - which provided the NFC with an RM250 million soft loan - has a golden share in the company through Ministry of Finance Inc Sdn Bhd.

Shafee also submitted what investigating officer ASP Mohd Rizal Mohd Jaafar had affirmed in his affidavit, in quoting A Manaf, amounted to hearsay and should not be accepted by the court.

On the affidavit by company secretary Ng Pek Hoon that some of the directors had protested the property purchases, Shafee said that this too amounted to hearsay and that there was a great amount of difference in what happened and what the prosecution is claiming.

"The case cannot stand as the prosecution will have a nightmare in proving its case. No doubt the case attracted much adverse publicity. However, there is no legal basis to sustain the charge and hence it should be dropped,” he said.

Breaching the deed of assignment

Meanwhile, DPP Awang Armadajaya Awang Mahmud, submitted that Salleh had committed an offence of CBT, and the court should be allowed to hear the matter in trial and not through arguments made in an affidavit.

"The charge is not frivolous and vexatious and hence it should be heard fully in trial. The court should hear the evidence presented and evaluate the witness testimony and also the documentations made.”

The prosecutor said Ng, along with A Manaf and Mat Ali Hassan are witnesses in the case and their testimonies should be heard orally.

Awang Armadajaya submitted that when NFC took a loan from the government, it had entered into a deeds of assignment, where the company cannot enter into a purchase of property.

"This is clearly stated where NFC can choose to pay the loan amount or can engage in short term investments of less than a year.

"However, NFC is not allowed to give funds to purchase property by NMLC as these are two different entities," he said, adding the deed of assignment represented the Malaysian government interest in the deal.

NMLC not a subsidiary

The loan money, he said can be used for the purposes of the project that it was assigned to.

"This is not NFC property and did not amount to the government interest," he submitted, adding that although ratification is made to legalise the use of the fund but the fact remains that this is still against the deed of assignment.

"In this matter, there is no green light given for the ratification (to purchase the properties)," he said.

azlan Awang Armadajaya later cited Ng's affidavit in which she affirmed that she had no knowledge of the finance ministry's granting NFC the approval to channel money from the government loan to the NMLC.

Referring to the 18th board of director's meeting dated Sept 21, 2011, Awang Armadajaya said the board had agreed that the NFC management should seek finance ministry approval to acquire a 51 percent stake in NMLC for it to become a subsidiary.

"There is no company director's resolution over the takeover of 51 percent stake," he said, adding that until this day, NMLC is not a subsidiary of NFC.

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