Realmild not held in trust for Umno, court rules

Khalid was very happy with the court’s decision today, December 10, 2010. — File pic

KUALA LUMPUR, Dec 10 — The High Court has effectively dismissed the notion of an Umno trust in its ruling today over the disputed sale of a block of Realmild Sdn Bhd shares.

The shadowy company has been alleged to be owned by the grand old political party to protect its business interests, since its set-up by four Malay newspapermen-turned-businessmen in the early 1990s.

Realmild had held a controlling stake in several conglomerates, including the public-listed Malaysian Resources Corporation Berhad (MRCB) and media giant New Straits Times Press Berhad (NSTP).

Today, former company director Khalid won his RM10 million suit against corporate player Datuk Seri Abdul Rahman Maidin over a disputed five per cent sale of a block of Realmild shares in 1999.

The latter had counter-sued Khalid for misrepresenting the true ownership of the shares in a bid to claim back a RM5 million payment after being told by then-Prime Minister Tun Dr Mahathir Mohamad that Realmild “belonged to Umno” and that all the shareholders were only nominees.

Judge Datuk Mary Lim ordered Abdul Rahman to also pay RM70,000 in costs.

In reading out her decision, Lim said Abdul Rahman had failed to prove misrepresentation, noting “the defendant is not a novice but an established player”.

She said the evidence by another founding partner of Realmild, Datuk Ahmad Nazri Abdullah, had backed Khalid’s assertion that he owned the five per cent shares that were given to him as “motivation” to improve the business.

“It’s a very good decision,” a beaming Khalid greeted reporters outside the courtroom this morning.

The retired accountant, who is now a commissioner with the recently set-up transport commission, applauded the judge for going back to the basics of corporate law.

“The most important thing in corporate law is that any share... even 10 sen [amount] can be unitised to be put on a title... and no other law can say it’s not yours,” he added.

Abdul Rahman was ordered to pay RM70,000 in costs. — File pic

Khalid stressed that he did not care that he would finally be paid the full amount for the sale of the shares but that the court decision had exonerated him as an Umno crony and proxy in public.

“Is five per cent a proxy sum?” he asked, rhetorically.

“The most important fact is that I’m never, never a crony. I’m not because I’m a professional. All this while I’ve been saying that,” he said, repeatedly.

The suit was mooted by Khalid in March 2005 against his successor, Abdul Rahman, to claim RM10 million in payment for a block of the company’s shares.

In taking their quarrel over the sale price of Realmild’s shares from a decade ago, Khalid and Abdul Rahman have showed how the political giant has fed and sustained its tight grip on power through control of several conglomerates starting from the early 1990s.

The nexus between Umno and certain conglomerates has been revealed in the court hearing that started in August this year involving the past shareholders of Realmild, the shadowy company that took over NSTP in 1993, and MRCB.

A number of high-flying corporate figures entered the witness stand, most notably Tan Sri Syed Anwar Jamalullail, younger brother to the Raja of Perlis Tuanku Syed Sirajuddin Ibni Al-Marhum Tuanku Syed Putra Jamalullail who also held the position of Yang di-Pertuan Agong at the time of the contentious takeover.

Khalid sued Abdul Rahman for RM10 million over the sale of a five per cent stake in the company in 1999, which took place during a shake-up and buy-out related to Datuk Seri Anwar Ibrahim’s sacking from government.

Abdul Rahman had paid RM5 million but later reneged on the remainder.

The silver-haired industry captain testified in court that Dr Mahathir, who was prime minister at the time of the buy-out, told him that the shares actually belonged to Umno.

Abdul Rahman, a former Penang Malay Chamber of Commerce president, also claimed to have received instructions from Tun Daim Zainuddin, and Tan Sri Nor Mohamad Yakcop had previously instructed him to undertake a management buy-out of MRCB by purchasing the 7,101,001 ordinary shares in Realmild.

But Khalid maintained the five per cent stake was his own although he acknowledged that the majority stake was part of an “Umno trust”.

The other directors in Realmild then were former Berita Harian group editor Ahmad Nazri, New Straits Times group editor Datuk Abdul Kadir Jasin and Mohd Noor Mutalib, who replaced Khalid as NSTP managing director in February 1993.

Realmild, originally a RM2 company, was then already the majority shareholder of MRCB, which is now developing the KL Sentral commercial and transport hub in Brickfields.

Representing Khalid was lawyer Ahmad Fadzil Mohd Perdaus.

Alex De Silva and Eugene Jeyaraj Williams acted for Abdul Rahman. - Malaysian Insider