Ex-corporate bigwig sues Mahathir over Khazanah’s takeover of UEM
Published on: Wednesday, August 09, 2023
By:
Yeoh Guan Jin, FMT
Tycoon Halim Saad (centre) claims Mahathir Mohamed (left) and Nor Mohamed Yakcop were the ‘prime movers’ of a takeover of UEM and Renong for which he was not adequately compensated.
PETALING JAYA: Former corporate bigwig Halim Saad has filed a suit against the government, former prime minister Dr Mahathir Mohamad and ex-second finance minister Nor Mohamed Yakcop for forcing him to relinquish his stake in the Renong-UEM group and rights vested in him without adequate compensation 22 years ago.
In a 34-page statement of claim filed in court last week, Halim claimed that Mahathir and Nor Mohamed were “the prime movers in respect of the said compulsory acquisition and deprivation”.
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According to the filing, the stake comprised 372 million shares, representing 16% of Renong Bhd’s entire share capital.
Halim claims the shares, which were acquired by government investment arm Khazanah Nasional via its subsidiary in 2001, belonged to him personally and not to Umno, a fact acknowledged by current prime minister Anwar Ibrahim in Parliament on Nov 24, 1997.
Anwar was the deputy prime minister, finance minister and Umno deputy president at that time.
Halim claimed that at that time, UEM held a 32.6% stake in Renong, while Renong held 37.92% in UEM.
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“This crossholding, together with the plaintiff’s (Halim) single largest stake in Renong, had the effect of the plaintiff indirectly further controlling 32.6% of the voting shares of Renong,” the statement of claim said.
Halim said that as controlling shareholder he had a vested right to carry out a general offer on UEM and was preparing to carry it out.
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However, Halim alleged he was ordered by Mahathir, both directly and through Nor Mohamed, not to proceed with the general offer because the government wanted to acquire all UEM shares through Khazanah.
“In line with this, the plaintiff (Halim) was also directed to exit UEM and Renong (and all their subsidiaries), both as shareholder and director,” the statement of claim said.
He says he eventually disposed of his entire stake in Renong at a loss.
Prior to that, Halim said UEM board members Syed Amin al-Jaffri, Ramli Mohamad and Azman Yahya, met the then prime minister to express their views but were told to “stay away from the matter”.
“Sometime after July 14, 2001, the then chairman of the Securities Commission (SC), Ali Kadir, summoned the whole board of directors of UEM to his office and reprimanded the board for allowing the cross-shareholding between UEM and Renong to take place,” the statement of claim said.
Halim claims the directors were told that they could be subjected to prosecution over the matter.
Ali is also alleged to have told them not to extend any assistance to Halim in connection with a put option that he held and to resign from the board, the document said.
Halim said he eventually complied with the directive because Mahathir was the prime minister at that time. This, he said, was after Nor Mohamed had assured him that he would be compensated in several ways, including by payment in cash or kind of the equivalent of RM1.3 billion.
According to Halim, both Renong and UEM were at that time said to be worth in excess of RM14 billion each.
In July 2001, Khazanah, through its subsidiary Danasaham Sdn Bhd, made a general offer to acquire the entire share capital of UEM at RM4.50 per share for UEM, equivalent to RM4 billion. The transaction was completed three months later after Halim issued a letter dated July 17, 2001 confirming his support for the proposed offer.
In his suit, Halim is seeking relief in the form of several declarations, including that he was the true beneficial and legal owner of the shares, and not Umno, at the material time.
He also wants the court to declare that his vested right was compulsorily acquired by the government, acting through Mahathir and Nor Mohamed.
Halim says the acquisition, without payment to him of adequate compensation, was in breach of Articles 8 and 13 of the Federal Constitution.
Article 8 provides that all persons are equal before the law and entitled to equal protection of the law.
Under Article 13, no person can be deprived of property except in accordance with the law, and that no law shall provide for the compulsory acquisition of property without adequate compensation.
Under the statement of claim, Halim also seeks payment by the government of compensation or damages to be assessed by the High Court together with exemplary and aggravated damages, interest and legal costs.
Halim was instrumental in growing the Renong corporate empire between the mid-1980s until it was acquired by the government.
He was credited with building its cash cow — the North-South Expressway (NSE). A 2001 Rating Agency Malaysia report projected the NSE’s net present value (NPV) cashflow for 2001-2030 at RM28 billion.
Apart from toll highways, the conglomerate had interests in construction, financial services, telecommunications and property development and had about a dozen listed companies in its stable.
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