Ex-Perwaja Steel managing director Eric Chia's defence team was barred by the Kuala Lumpur Sessions Court today from questioning a prosecution witness on an alleged conspiracy involving ex-deputy premier Anwar Ibrahim.

Sessions judge Akhtar Tahir told lead counsel Muhammad Shafee Abdullah that the questions relating to the alleged conspiracy to oust Chia from Perwaja were "irrelevant" to the criminal breach of trust charges.

"Anwar's role (in the alleged conspiracy) is irrelevant. I am disallowing the line of questioning," said the judge after hearing arguments from both the defence and prosecution on the matter.

Chia is charged with making an unauthorised payment of RM76.4 million to a Japanese company NKK Corporation on Feb 22, 1994 via the accounts of Frilsham Enterprises Incorporated, a Hong Kong based company.

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.

'Anwar created obstructions'

Shafee raised the conspiracy claim when cross-examining prosecution witness Zubir Embong, a former Perwaja director.

Zubir, responding to a question, said he did not know that Chia was facing problems with Anwar, who was then finance minister.

"Did you know that the accused had complained to then prime minister (Dr Mahathir Mohamad) that Anwar had deliberately created obstructions in the running of Perwaja?" asked Shafee.

However, before Zubir could answer, lead prosecutor senior deputy public prosecutor Mohd Yusof Zainal Abiden objected stating that the question should not be allowed as it is irrelevant to the charges.

"The key issue of this case is whether the RM76.4 million paid to a Japanese company from a disputed technical assistance agreement was made with or without the consent of Perwaja's board of directors. Whether or not there was a bid to oust Chia from the company is not crucial to the main issue," he said.

Company documents

Shafee argued that the line of questioning should be allowed as the defence planned to show that the mismanagement allegations against Chia emanated from Anwar's various statements in Parliament.

"The defence wants to show that there is a scheme of plan by relevant people to oust the accused from the company to make way for another company to take over Perwaja," he said.

He said the defence will be submitting company documents to show that the RM76.4 million payment was made with the Finance Ministry's full knowledge.

"However, the accusation that the payment was made without authorisation was made to slant the accused's credibility. That is the general allegation which we are making," he added.

However, Shafee's argument was rejected by the court.

But this did not deter him from asking the witness if he knew that Anwar had directed Perwaja to be sold to a RM2 company which was also a subsidiary of MRCB (Malaysian Resources Corporation Bhd).

"I have ruled that this line of questioning is irrelevant," responded the judge in allowing the prosecution's objection.

The hearing continues tomorrow.