Minister locked in legal tussle with gov't over RM18m loan

The government is embroiled in a legal battle with a cabinet minister over a RM18 million loan from Bank Pertanian Malaysia Berhad.

In his counter-suit against the bank in 2015, Mohd Redzuan Md Yusof, who is now entrepreneur development minister, named the government and two ministers.

Redzuan, who was a businessperson, joined Bersatu in late 2016 and won the Alor Gajah parliamentary seat in the 14th general election before being appointed to the cabinet.

Contacted by Malaysiakini about the case, which is still ongoing in the Kuala Lumpur Commercial Court, Redzuan declined to comment at length.

"I think it will be handled in a manner whereby it will not jeopardise anybody.

"My solicitor is handling it so I will leave it as it is," he said.

Redzuan's lawyer Su Tiang Joo told Malaysiakini that the minister is considering his options, including withdrawing the counterclaim.

"He is ... sensitive to the situation and is seriously considering his options with a view to making further personal sacrifices for the sake of the nation and political stability so as to bring this matter to an amicable end.

"In this regard, one of the sacrifices being considered is to withdraw the counterclaim against the present government," he added in an email.

Su also pointed out that under Article 8(1) of the Federal Constitution, all persons are equal before the law and thus are entitled to equal protection of the law.

As such, he said, Redzuan is also entitled to such protection of the law even though he is now a member of the cabinet.

"He is fully conscious of the rule of law and will abide by it including making good on any obligations imposed by law. At the same time he should be allowed to continue to assert and claim the rights he has under the law," he added.

Bank Pertanian claiming RM21.9 million in suit

According to court documents, Bank Pertanian had first filed a legal suit in 2015 against Gagnar Corporation Sdn Bhd and three other defendants, including Redzuan, claiming an amount of RM21.9 million from them as of July 8, 2015.

The bank also claimed for Ta'widh (compensation) on an annual basis until the loan's maturity date on June 1, 2021, or the date of the legal suit's disposal, whichever comes first, after which the bank stated that the compensation is to be valued based on Islamic Interbank Money Market Rate's current rate.

It is understood that Redzuan and the two others were the directors of Gagnar. Checks with the Registrar of Companies (SSM) confirmed this, with Redzuan being listed as the largest shareholder of the RM5 million company with 4,970,000 shares.

In the bank's statement of claim, it was stated that Gagnar Corporation had accepted a financing facility amounting to RM18 million under Al-Bai Bithaman Ajil in a letter dated April 21, 2011.

The loan was meant to fund the company's sea farming project using high impact farming system in the waters off Sibu Island in Mersing, Johor.

It stated, among others, that the selling price for the financing facilities was RM22.212 million, with financing term of 120 months.

Muhyiddin one of the witnesses

Court documents also showed that current Home Affairs Minister Muhyiddin Yassin was one of the witnesses in the trial. A gag order was also issued on March 12, 2019 on the witness statements in this case.

Lawyer Andrew Chiew Ean Vooi, who is representing Bank Pertanian, told Malaysiakinithat the bank initiated the suit in 2015 to recover the loan from Gagnar and its directors.

"Financing was given and there was no repayment. So the bank decided to take action to recover (the amount loaned)," he said when met at the Kuala Lumpur Courts Complex.

Following the suit filed by Bank Pertanian, Gagnar Corporation, Redzuan, its two other directors and Hamidah Osman, who is Redzuan's wife, had filed a counter-claim with the High Court.

The counter-suit named four defendants, namely the minister of finance, Bank Pertanian, minister of agriculture and the government of Malaysia.

Redzuan's lawyer said his clients are challenging the legality of Bank Pertanian's claim and are counterclaiming for damages which are significantly more than the bank's claim.

"(The amount of damages is) from losses which arose from the inept management of the financing by the bank and the failure by the previous government to make good on its representations and promises.

"As far as Gagnar is concerned, its efforts in growing out fishes in high impact farm ocean cages were successful. The trial is ongoing," added Su.

According to the counterclaim documents sighted by Malaysiakini, one of the arguments is that the agriculture minister and finance minister were supposed to provide assistance to the project.

The assistance was meant to be in the form of facilitating the provision of sufficient hatcheries and nurseries for the fish as well as sufficient funding through Islamic financing.

"By reason of lack and insufficient provision of hatcheries and nurseries by the (agriculture minister), (Gagnar) could not secure sufficient supply of fish fry in both quantity and size for its operational needs, insufficient funding, delayed and inept financial and other necessary support from the (finance minister), the project ran into financial and operational difficulties through no fault of (Gagnar)," the document read.

As such, Gagnar denied it is liable in any way whatsoever for the claims made by Bank Pertanian Malaysia.

Chiew said they expect the trial at the High Court to be disposed of by September.

"Because now we have just finished (with) the plaintiffs' case, and (had just) started the defence's case.

"So this is the first witness (for the defence). There is some issue about whether the (financing) facility is shariah compliant, and that is what the current witnesses are giving evidence (testimony) on," he added. - Mkini