Disclose out-of-court deals

P Gunasegaram
Malaysiakini
Jul 19, 2013

QUESTION TIME When a ball goes out of court, it goes out of play and play stops. But not so when a case goes to court and then there is an out-of-court settlement. Things are still very much in play, only the public does not get to see the action any more.

Out-of-court settlements are great if the dispute at hand is nobody else’s business but the parties in conflict. It is the right thing when matters are private, for example divorce cases when there is no reason whatsoever why it should become a public matter.

But when it involves the government, it is against the public interest to have out-of-court settlements, and if there are, then it would be best if the full terms of the settlement are made known to the public. Otherwise, who knows what will be hidden from the public eye?

Two incidents earlier this week caused us to be alarmed and relieved in turn. It was alarm when The Star reported that speculations were rife that a suit between tycoon Halim Saad on one side and former minister and government special adviser Nor Mohamed Yakcop, the government and Khazanah Nasional Bhd on the other, will be settled out of court – for RM1 billion.

Halim had claimed some RM2 billion in the suit, alleging that he was fraudulently induced to give up control of United Engineers (M) and other related companies. He said that the terms of the agreement were not adhered to.

Nor Mohamed, who was recently, and after Halim’s suit, made deputy chairperson of Khazanah Nasional and chairperson of its executive committee, in his affidavit denied the allegations.

And so we thought after The Star report, is this going to be another case which will be settled in private with no one but those involved knowing the details? Will the government do an out-of-court settlement again, after a case involving Tajudin Ramli and the national asset management agency, Pengurusan Danaharta Nasional, was settled out of court in February last year?

What was amazing in that particular settlement was that Danaharta had already obtained judgment for RM589 million against Tajudin in 2009. Together with interest, that would have amounted to over RM800 million, raising the question of why the government settled when they already had that RM800 million in hand.

The terms of that agreement were never made public but it basically resulted in the parties dropping all claims against each other, leading to speculation that the settlement may have favoured Tajudin, who, like Halim, was one of a coterie of businessmen who were closely linked and were proteges of former finance minister Daim Zainuddin.

Putting all that talk to rest

Are we to expect that the same thing will happen with Halim? We were relieved when Khazanah Nasional put all that talk to rest with a strong statement from which we quote verbatim:

“We refer to the article, “Halim’s legal suit poser – Will it be settled out of court?” published in The Star on July 18, 2013.

“With regard to Tan Sri Halim Saad’s legal suit against Tan Sri Nor Mohamed Yakcop, the Government of Malaysia and Khazanah Nasional Berhad (“Khazanah”), the respective defendants would like to state that contrary to the said article, there is neither a settlement being proposed nor are they aware of any discussion in respect of the same.

“All three defendants continue to believe that they have a strong defence to the claim and shall take all measures necessary to vigorously defend it in order to protect their respective interests. Further, as the case is now before the courts, it should therefore be deliberated and decided accordingly by the courts.”

We take heart that the defendants will vigorously defend the case. And we hope that no matter what the unpleasant and unsavoury details that would be revealed in court, the defendants will stick with it and go ahead with the case.

Let all be revealed in court and let not anything be hidden which the public has a right to know. And if there is an out-of-court settlement let the terms of the deal be revealed to the public and the rationale for the that clearly stated.

There is much that happened in Corporate Malaysia in the anything-goes years of the nineties and their newly-minted millionaires and billionaires and how they made their fortunes through privatisations, corporate finance and other deals.

And there is the story too of how many of them were brought to their knees and even hurled flat on their faces following the financial crisis.

If there is restitution to be made to any of them or if any out-of-court settlements are to be made with any of them following their fall from grace, then the public has a right to know the circumstances under which the settlements are made and what they were.

Anything less than that is nothing but a cover-up.

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P GUNASEGARAM is founding editor of KiniBiz.