Perwaja Steel's former group operations senior manager today said that NKK Corporation had never asked for a lump-sum payment of RM76.4 million for technical assistance services to Perwaja Rolling Mills and Development.

Dr Akram Che Ayob told the Kuala Lumpur Sessions Court that NKK general manager N Otani told him this on Oct 4, 1995 at a meeting in Shah Alam to discuss the payment which had been approval by Perwaja's former managing director, Eric Chia.

"Otani told me that NKK had never asked for the lump-sum payment of Yen 2.89 billion (worth RM76.4 million then) and that the main contract (which allows for a staggered payment) was still good," said Akram, who is now the CEO of Multi Discovery Sdn Bhd.

"He (Otani) also told me that the signature on a letter dated Feb 17, 1994 demanding for the full payment to be made to the accounts of Frilsham Inc in Hong Kong, was not his."

Otani also clarified that Frilsham was not NKK's subsidiary and that the two has no business connection, he added.

Akram was testifying at the trial of Chia who is charged with making an unauthorised payment of RM76.4 million to NKK on Feb 22, 1994 via the accounts of Frilsham Enterprises Incorporated.

Chia also faces an alternative charge of illegally entering into an agreement with NKK to dispose the RM76.4 million without the approval from Perwaja's board of directors.

He is charged under section 409 of the Penal Code which carries the maximum penalty of 20 years jail.

Contract price not stated

In his testimony, Akram said present at the meeting were Perwaja's group senior manager Ahmad Zaini Othman and an interpreter for Otani.

"Seeing that he had problems conversing in English, I told Otani to think about it the matter carefully. I advised him to reply to our inquiries officially via a letter. Not long after that, I received his letter repeating what he had said at our meeting," he said.

Earlier, Akram said that he and Ahmad Zaini decided to consult Otani about the payment after examining all documents related to the project's agreement and payment methods.

"I found it odd that a lump-sum payment of Yen 2.9 billion was made when the main agreement provided for staggered payments. I also found it odd that the price of the contract was not specified in the agreement," he said.

He said he was also suspicions of NKK's alleged letter of demand as Otani's signature on it was different when compared to his other signatures on other letters.

'Trojan horse'

During the trial's morning session, the prosecution's witness, Perwaja's former corporate accounts director Kong Keng Hee, was subjected to intense questioning by Chia's defence team, who contended that he had a bone to pick with Chia.

Kong, however, denied that he was upset with the accused for rejecting his proposal to invite Lion Group - a major, well-diversified local conglomerate - into Perwaja for a backdoor listing.

He dismissed the defence contention that he was among the strongest advocates in Perwaja for the backdoor listing apart from Lion Group's chairperson William Cheng.

He also denied that Chia had once told him that a backdoor listing proposal for the Lion Group would not be viable as it would amount to allowing a 'Trojan Horse to infiltrate Perwaja'.

"I was personally recruited by Chia to look into the IPO (initial public offerring) of Perwaja. I have high regards for Tan Sri but I don't know if that feeling is reciprocated," Kong told counsel Muhammad Shafee Abdullah.

Hearing before judge Akhtar Tahir continues on Monday.