Zenith Group of Companies and its chairperson Zarul Ahmad have decided to take legal action against Parti Cinta Malaysia vice-president Huan Cheng Guan for defamation over the construction of the Penang Undersea Tunnel.

Zarul said such slander by the likes of Huan had damaged his reputation and eroded the banks' confidence in his company.

He added that he issued many clarifications on the tunnel project since 2013 when his company Consortium Zenith-BUCG inked a deal with the Penang government to build a RM6.3 billion undersea tunnel and three highways to help address the state’s traffic congestion.

“As far as we are concerned, we did nothing wrong and want to help Penangites address the state’s traffic problems,” Zarul said in a press conference in Komtar today.

“With this project, we want to help Penangites with more business and job opportunities but this is what I get.

“I won this contract via an open tender and this has been acknowledged by those who made allegations against me,” he stressed.

“I am sorry if I offended anyone, but I am fed up with all this after all these years."

Zarul was referring to Huan, who lodged a second report with the Malaysian Anti-Corruption Commission (MACC) yesterday showing the share structure of the joint-venture between Zenith and China Rail Group (70 percent); Beijing Urban Construction Group (10 percent); Sri Tinggi (10 percent) and Juteras Sdn Bhd (10 percent) when the agreement was signed with the Penang government.

However, recently, Huan alleged that the current shareholder structure is Zenith (no longer with China Rail Group) holding 99.13 percent of the shares, with Beijing Urban Construction Group having 0.0057 percent and Juteras Sdn Bhd, 0.863 percent.

To this, Zarul said the China Rail Group had never been a shareholder of his company as they were in the project as a joint-venture.

“But I am a director of China Railway Malaysia and this company will be with me forever and we are pursuing other projects as well, locally and overseas,” he said.

Zarul said he had been very patient with the project's opponents all this while, but felt it was time for him to take legal action because "I cannot continue to be hammered all the time".

He said his opponents' defamatory actions were affecting his reputation.

“One day, the MACC might come and raid my office and it’s very bad for business,” said Zarul.

On the diluted shares of the companies, Zarul said it was the firms' decision not to put in more shares.

But he said it would not affect Consortium Zenith-BUCG’s ability to complete the tunnel and three highways.

Penang gov't fully protected

Meanwhile, Chief Minister Lim Guan Eng assured that the Penang government was fully protected as far as the project was concerned.

He said it had signed agreements with the individual companies, like China Railway and BUCG, to ensure the project was effectively delivered.

“It is not done normally but we wanted to protect the state government,” Lim said as he showed the signatories of the companies in a copy of the agreement with Consortium Zenith-BUCG to build the tunnel.

Lim said the state executive council had its meeting today, and condemned those who tried to sabotage and prevent the project from taking off.

He insisted that the Penang government was "accountable and transparent" in implementing the open tender system.

“Despite the many clarifications by state executive councillor Lim Hock Seng about the undersea tunnel, the opponents of the tunnel continue to slander the state government,” Lim said.

“This project was won by Consortium Zenith-BUCG via open tender, it is not a brother-sister or crony company.

“Although he was always known as a federal man, Zarul won the award for the project because he gave a good offer,” said Lim.

He expressed regret that a state which practiced open tender was being probed and slandered, while those who made questionable purchases in foreign countries escaped scrutiny.

In an immediate response, Huan said the legal action against him by Zenith is an "attempt to stop me from continuing to expose further irregularities on their project".

He said the company's attempt to sue him was based on "frivolous reasons to apply for a gag order to shut me up on my attempts at seeking more transparency on this mega-project".

"I await their legal letter and once received, I will consider all my legal options, including possibly a counter suit".