A former senior management personnel of Perwaja today said that he ignored standard operating procedures when paying out RM76.4 million to a Japanese company as instructions to pay out the amount were signed by Perwaja ex-managing director, Eric Chia.

Mohd Noor Mahat, Perwaja's former Treasury Section manager told the Kuala Lumpur Sessions Court that the payment voucher for RM76.4 million to a bank to release the funds to Japanese firm NKK Corporation in 1994 did not go through the normal channels.

He said he ignored all normal procedures after he saw a note signed by Chia authorising the payment to NKK via an account belonging to Frilsham Enterprise Incorporated. The payment was in relation to a Beam and Section Mill project in Gurun, Kedah.

"After seeing the managing director's signature, I ignored the rest (normal procedures)," he said under cross-examination by Chia's counsel Azhar Azizan Harun.

Mohd Noor also admitted that the incident was not a first time he had bypassed standard rules whenever there was a specific directive from Chia in relation to payments. He said normal procedures would compel him to double check invoices and extracts of the contracts before issuing a payment voucher.

"It was not only that payment (to NKK). If any other payment orders came with Chia's signature, I didn't need to have supporting documents (to issue the payment vouchers)."

Staff culture

Mohd Noor was testifying against Chia who has claimed trial to misappropriating the RM76.4 million belonging Perwaja Rolling Mill on Feb 19, 1994 in his capacity then as the company's managing director.

The former steel tycoon has also claimed trial to an alternative charge of dishonestly disposing of the company funds by entering into an agreement with NKK and authorising the money to Frilsham's bank account without the approval of Perwaja Rolling Mills' board of directors.

Mohd Noor further testified that he had treated the NKK payment matter urgently although there was nothing in Chia's note (which was attached with the payment demand) specifying that the matter was exigent.

"We (Perwaja staff) were told that any request by Chia must be dealt with urgently," he said, adding it was a culture among the staff to give special treatment to any of Chia's requests.

"Everybody did the same thing," he said.

Mohd Noor said he did not remember if auditors from Arthur Anderson had expressed any dissatisfaction about the RM76.4 million payment.

"There was nothing special or significant of that particular payment for me to remember such details," he told the court

Loan taken

To another question, he said that he had no personal knowledge why Perwaja had taken a US$196 million loan from Itochi Consortium, Japan.

"Someone told me that the loan was (payment) for spare parts bought in relation to the Gurun project. I don't remember who exactly told me this," he said.

Yesterday, Mohd Noor testified that Perwaja Rolling Mill has obtained a loan to cover the RM76.4 million payment to NKK. This company was forced to do this due to insufficient funds.

Hearing before judge Akhtar Tahir continues on Wednesday.