Putrajaya fails to prove case against NFCorp, court rules no evidence of fraud

Editors Note: The earlier version of this article erroneously reported that the court ordered NFCorp to repay its RM120.6 million loan to Putrajaya. The error is regretted.

The Kuala Lumpur High Court this afternoon ruled that Putrajaya failed to prove any wrongful use of the RM250 million loan to National Feedlot Corporation (NFCorp).

Civil court judge Anand Ponnudurai was delivering his verdict over the federal government’s lawsuit against NFCorp and 10 other defendants, which included the company’s executive chairperson Mohamad Salleh Ismail, who is the husband of former Wanita Umno chief Shahrizat Abdul Jalil.

Anand ruled that there was no wrongful use of the loan sum and no breach of fiduciary duties by the 11 defendants, which also included Salleh’s three children - the company's chief executive officer Wan Shahinur Izran, and directors Wan Shahinur Izmir and Wan Izzana Fatimah Zabedah.

In fully exonerating Salleh’s family from any allegation of misappropriation, the court also found that the federal government breached the Implementation Agreement (IA) when the plaintiff failed to construct the Export Quality Abattoir (EQA) and breached the Loan Facility Agreement (LFA) by unlawfully terminating it.

Anand pointed out that it was not unlawful for NFCorp to utilise part of the loan to invest in properties in the name of the company, thus resulting in the company not going against the loan agreement and IA.

In reading out the lengthy ruling, the civil court found that the ambitious project’s targets were not met due to the government's failure to build the EQA.

The judge directed NFCorp to return RM33.7 million of the unutilised loan amount to the government.

Anand also ordered for the investment properties to be transferred to the government.

Counterclaim

The court allowed NFCorp’s counterclaim against the government for breach of agreement and allowed for nominal damages of RM10,000.

Senior federal counsel Nurhafizza Azizan and Ashraf Abdul Hamid from the Attorney-General's Chambers (AGC) appeared for the government.

NFCorp was represented by counsel Kiru K Kirubakaran, Rajan Navaratnam and Chong Kah Yee.

On May 31, 2019, the government filed the civil action which listed 11 defendants including six related companies.

The six companies are National Meat & Livestock Corp Sdn Bhd, Real Food Co Sdn Bhd, Meatworks Corp Sdn Bhd, Agroscience Industries Sdn Bhd, Asian Bioscience Corp Sdn Bhd and Techknowlogy Imageware (M) Sdn Bhd.

According to the lawsuit's statement of claim, the government sought a court declaration for Salleh's family to be personally liable for the debt repayment.

The government alleged that it entered into an agreement with NFCorp on Dec 6, 2007, for a RM250 million loan, a portion of which was used to fund the establishment and operations of the National Feedlot Centre (NFC) in Gemas, Negeri Sembilan in line with the government's policy to develop and advance beef production and beef products.

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