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Thursday, March 31, 2011

MIED war likely to prolong as new court battle looms


March 31, 2011

Samy Vellu denies he is orchestrating a grab for the MIED. — file pic
KUALA LUMPUR, March 31 — The tug-of-war over MIC’s cash-rich education arm Maju Institute of Educational Development (MIED) is set to drag on following plans by three members to seek legal redress — this time over the summoning of an extraordinary general meeting (EGM).

The trio are demanding that an EGM be held on April 21, after the wing’s board of trustees failed to convene the meeting this month despite their requisition notice on March 4.

The requisition, signed by former MIC deputy president Datuk S. Subramaniam, former MIC Youth chief A. Vigneswaran and former Kedah assemblyman and MIC central committee member Datuk S. Ganesan, calls for the removal of former MIC president Datuk Seri S. Samy Vellu as board chairman and another member, Tan Sri Dr T. Marimuthu.

According to Vigneswaran, Section 114(3) of the Companies Act stipulates that the board must summon the EGM within 21 days of receiving the requisition notice.

But the 21-day deadline had already expired on March 24, he told The Malaysian Insider.

Should the three decide to refer the case to court, the billion-ringgit education arm will be embroiled in its third legal battle since the beginning of this year.

The Malaysian Insider understands that the board of trustees now want to hold its own EGM on April 20, a day earlier than the date planned by the trio.

Vigneswaran said should the board decide to hold its own EGM, on or before April 21, the matter would inevitably end up in court.

“If they want to come out with their own notice, then it would not be valid under the Companies Act.

“And if they have their own notice, we will go to court to seek a decision on whether their EGM is valid or not,” he told The Malaysian Insider when contacted.

The MIED board of trustees had held its meeting two days back and it is understood that the April 20 EGM date had been considered.

MIED’s lawyers are presently studying the matter.

The trio are demanding that both Marimuthu and Samy Vellu, who recently stepped down as MIC president, relinquish their posts in the MIED until the RM100 million suit filed against them last year is disposed off.

Samy Vellu, MIC president Datuk G. Palanivel, Tan Sri M. Mahalingam, Marimuthu, Tan Sri Dr SK Ampikaipakam, Tan Sri Dr KS Nijhar, Tan Sri K. Kumaran and Tan Sri G. Vadiveloo are currently facing a lawsuit by MIED, which was initiated by Vigneswaran.

Mahalingam and Kumaran are no longer members of the board.

In the suit, filed on July 5, MIED claimed that all the defendants had breached their fiduciary and statutory duties, and failed to discharge their responsibilities as trustees and auditors, which caused MIED to suffer financial losses.

It was also seeking an injunction to restrain Samy Vellu from continuing to helm the institute, that he be stripped of his membership in MIED and for him to return all monies or profits made from MIED either by himself or through family members and close friends.

MIED was also seeking a court order to make Samy Vellu compensate all the financial losses incurred by the institute during his tenure as its chairman as well as damages amounting to RM100 million.

In January, the Kuala Lumpur High Court had issued a 30-day deadline to Samy Vellu, as the MIED chairman, and seven other board members to furnish several documents in the MIED suit.

Judge Datuk Abdul Aziz Rahim had ordered them to surrender the documents, including those involving the construction of AIMST University, which is said to have caused MIED’s massive losses.

Vigneswaran had also requested that the defendants surrender the appointment letter of former MIED chief executive officer P. Chitirakala and her scope of duties.

MIED had sought a total of 12 documents after Judicial Commissioner Mah Weng Kwai on June 14 last year had allowed the application to nominate MIED as plaintiffs in the proposed suit against the board of trustees.

The requisition for the EGM comes as Samy Vellu faces accusations of attempting to hijack MIED from MIC by expanding its membership, which was denied by the former works minister.

On March 7, the same trio had won the injunction to stop Samy Vellu from going ahead with a meeting that would have expanded the number of MIED members by 10.

It is understood, however, that the move oust Samy Vellu would be easily defeated as the majority of the 34 MIED members remain loyal to the party’s longest-serving president.

The Malaysian Insider understands Palanivel is still struggling to win the support of the majority of the MIED members because of his failure to award party leaders with GLC positions, government appointments and contracts.

MIED with assets of about RM1 billion, has been chaired by Samy Vellu since it was established in 1984.

It currently has 34 members who have the power to elect the chairman of the 10-man board of trustees.

MIED is scheduled to hold its annual general meeting in the middle of this year, the first since Palanivel became MIC president last December.

Samy Vellu has denied allegations that he was planning to hijack the education arm from MIC.

He instead claimed that the accusations were designed by his enemies to drive a wedge in his relationship with his successor Palanivel.

He pledged that MIED would stay in MIC’s control. - Malaysian Insider

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