A co-operative closely linked with PAS, Koperasi Al-Hilal (Kohilal), stands to lose RM1.14 million following a default judgment obtained by two former investors at the Kuala Lumpur High Court in March.

Legal documents made available to malaysiakini revealed that the court had issued the judgment on March 3 to Azman Mohamad Isa and Norzan Suhaili after Kohilal and second defendant Perdana Technology Ventures Sdn Bhd (PTV) failed to respond to the civil summons within the stipulated time frame.

(Under the law the sued party has eight days from the date of the service of summons, to file an appearance in court before subsequently filing a defence)

The judgment ordered Kohilal and PTV to pay the plaintiffs (Azman and Norzan) a total of RM1.14 million together with 8% interest a year with effect from Oct 31, 2002.

Kohilal executive director Md Shukor Aziz confirmed that the co-operative has been notified of the default judgment but said that it plans to fight to ruling and has appointed a lawyer to take appropriate actions.

He conceded that this is a second default judgment successfully entered by a former member but stressed that the earlier suit (initiated by ex-member Abdul Aziz Awang Kechil who demanded the return of his investments amounting to RM38,000) had been settled.

"That one is settled. This is a different one which we intend to fight back," he said when contacted.

Application filed

Kohilal's lawyer Zulkifli Nordin said he had filed an application at the High Court on April 28 to set aside the default judgment, "to record appearance out of time".

"Our application will be heard in chambers before a High Court deputy registrar on May 25. We are also asking the court to stay the default judgment pending the disposal of our application," he said.

Attempts to contact officials or lawyers representing PTV proved futile.

The latest development is expected to add to PAS' headache. The party has formed a special committee to look into the problems which had been plaguing the co-operative following a series of botched investments between 1996-1999 while it was headed by Senator Hassan Shukri, who is now PAS deputy president.

PAS members - who formed the majority members of Kohilal- have raised their grouses with the party leadership but say that, to date, nothing has happened.

Details of deal

In a statement of claim filed by Azman and Norzam dated Jan 7, it was alleged that the former had entered into an agreement with Kohilal under Prinsip Al- Bai Bithaman Ajil (a Syariah-based investment scheme) for the purchase of 69,845 units of shares of Eletel Corporation Inc - a company whose based in San Francisco, California in United States - at US$1.50 per unit.

The agreement - dated Dec 7, 1998 - stipulated that Kohilal would purchase back the shares from him at US$1.80 per unit.

Norzam on the same day had entered a similar agreement with Kohilal involving the purchase of 103,021 units of Eletel Corp shares at the same price and to be also sold back to Kohilal at the same profit margin.

The couple claimed that they paid a total of RM990,000 to Kohilal for the purchase of the shares.

When Kohilal failed to fulfill the above agreements, the couple entered into a supplementary agreement with Kohilal and PTV on Dec 9, 2001.

The supplementary agreement stated, among other matters, that the total of 1.5 million units of Eletel shares would be transferred to the names of the two plaintiffs as beneficiaries and that Kohilal and PTV would purchase the shares from them at RM0.76 per unit before Oct 31, 2002 - amounting to RM1.14 million

The couple also claimed that both defendants had ignored their repeated claims for the RM1.14 million owed to them.

According to the documents received, Kohilal is seeking to set aside the judgment stating that it that it could not respond to the served summons as it was undergoing a dispute at a co-operative tribunal where the posts of the chairperson and secretary have yet to be finalised.

It also states that the defence it would be taking (if the application is successful) has merits considering that Kohilal was merely acting as an agent to PTV which sought financial assistance from plaintiffs in buying the Eletel shares and that the plaintiffs agreed to finance the purchase of the shares through a short-term investment scheme

It also claimed that the plaintiffs were fully aware that PTV was directly responsible for managing the investment accumulated by first defendant from the plaintiff and that all money given by them to Kohilal had been given to PTV.

It also stated that it plans to initiate a third party action against PTV.