While United Engineers Malaysia Bhd (UEM) is looking into ways to file an expensive legal suit against ex-Renong Group executive chairperson Halim Saad, the billionaire is said to be able to 'unlock' himself out of any law suit.

An analyst said the 47-year-old businessman had just escaped settling a huge debt of RM3.2 billion when UEM officially terminated his contentious put option to buy 32 percent of blocked shares in Renong Bhd.

"There is nothing UEM can do to make him (Halim) pay the debt. The put option had been officially terminated."

With this termination, Halim has forfeited the RM100 million he has paid UEM so far as part of interest for the payment.

Halim had granted the put option to UEM on Dec 11, 1998, giving him the right to purchase its shares in Renong.

The put option was granted after UEM's controversial buy-up of 722.9 million Renong shares at the height of the Asian financial crisis in 1997.

The analyst who spoke on condition of anonymity said there is no reason for UEM to take legal action against Halim as he is not connected with any other cases relating to the company.

"All business deals by Renong for the past 11 years were conducted by Halim according to standard company procedures," he told malaysiakini .

Political implications

Meanwhile, political observers have urged UEM not to file a suit against Halim as it would have political implications on the country.

They said Halim's decision to purchase UEM shares in Renong in 1997 was not made by him alone but involved a few other prominent political people.

"I strongly believe that if UEM decides to put Halim on trial, many famous political figures will be dragged together," a source said. He, however, declined to reveal names.

UEM announced yesterday that it had terminated the contentious put option by Halim to buy 32 percent of blocked shares in Renong.

The surprise move was to enable UEM to retain control of Renong, a crucial element in the restructuring of the UEM/Renong group.

UEM managing director and chief executive officer, Abdul Wahid Omar, told a press conference that the put option was formally terminated on Nov 16.

Staggered payment

At the end of last year, UEM exercised the put option, which committed Halim to buy its shares in Renong for RM3.2 bilion.

UEM agreed to allow Halim to stagger the payment over a 15-month period, but charged him RM300 million in interest payable in three instalments.

Full settlement of the put option was to be made on May 14, 2002.

However, after paying the first interest instalment of RM100 million on Feb 14 this year, Halim requested for an extension to make the second payment, which was due on July 14.

UEM acceded to the request and granted Halim an additional 60 days to pay the second instalment, but warned that if he failed to make payment within that time-frame, its board would take the necessary action to recover the debt.

The UEM board then said the market did not recognise the full value of the company's assets, due in part to the unresolved issue of debt owed by Halim.

The third tranche of RM100 million interest was to be paid on Dec 14.

However, following the takeover bid for 100 percent of UEM by Khazanah Nasional Bhd (a subsidiary Syarikat Danasaham Sdn Bhd), the UEM board decided to defer any further action until the outcome of Danasaham's bid was known.