Azmin Ali and the Selangor State Government have been under the spotlight in the past few months. First there was the issue of a RM16 million payment Universiti Selangor (UNISEL) and recently the Ijok land deal.
Both cases involve an out-of-court settlement by the Selangor State Government with the plaintiff.
In UNISEL’s case, the plaintiff was Jana Niaga Sdn Bhd (JNSB). JNSB and UNISEL entered into various contracts to build, operate and transfer part of UNISEL’s campus in Bestari Jaya.
Sometime in 2011, it was discovered that JNSB’s construction of the UNISEL campus were fundamentally defective and were unsafe for students to stay in. As a result, the former Menteri Besar of Selangor, Tan Sri Khalid Ibrahim (TSKI), terminated the contract with JNSB. JNSB was unhappy with TSKI’s decision because the contract is JNSB’s cash cow so JNSB decided to sue UNISEL for unlawful termination. UNISEL, under TSKI, defended JNSB’s claim in Court.
JNSB was unsuccessful in its Court actions against UNISEL. The details of which are irrelevant for the purposes of this article but suffice to say JNSB had to proceed to arbitration if it wishes to claim against the UNISEL.
To JNSB’s good fortune, TSKI was ousted by Azmin Ali in 2014. Instead of pursuing the claim against UNISEL in arbitration, JNSB sought for settlement with UNISEL through Menteri Besar Incorporated (MBI). Unlike TSKI, MBI under Azmin Ali was very kind towards JNSB. JNSB and MBI managed to settle JNSB’s claim against UNISEL. As part of the settlement terms, MBI paid JNSB a sum of RM16 million.
The payment of RM16 million is suspicious for many reasons. The chief of which is JNSB owes UNISEL about RM60 million for the cost of rectifying the defects caused by JNSB. Further, UNISEL’s own lawyers had advised that UNISEL has a good case against JNSB if the claim is brought to arbitration. It seems that MBI was all too keen to settle and pay JNSB even when JNSB owes UNISEL a large sum of money and even when JNSB has a weak claim.
Ijok Land Deal
The Ijok Land Deal involves two companies – LBCN Development Sdn Bhd (LBCN) and Mujur Zaman Sdn Bhd (Mujur Zaman). Together, LBCN and Mujur Zaman and its linked companies own over 2,000 acres of land in Ijok, Selangor.
These 2,000 acres of land were originally given by the State Government of Selangor to settlors in Ijok back in 1973 as part of its ‘Green Revolution’ in order to develop the land for the purposes of agriculture.
However, as time passed, the ‘Green Revolution’ never took off and these lands were eventually sold to developers – including LBCN and Mujur Zaman in 1998. In exchange of these lands, the settlors were promised by cash and house once these lands were developed.
These lands were never developed. The development was abandoned and the developers failed to fulfil their promise to the settlors. Instead, these lands were then charged to the banks and financial institutions as security for massive loans to the LBCN and Mujur Zaman.
In 2008, when TSKI became the Menteri Besar of Selangor, he sought to resolve the problems faced by the settlors. Through various efforts – including acquiring these lands under the Land Acquisition Act 1960 and forfeiting these lands under the National Land Code, these lands were taken back by the Selangor State Government.
TSKI’s intended to take back the land, re-develop it and fulfill the promises made to the settlors which LBCN and Mujur Zaman had failed. To this end, the Selangor State Government spent more than RM160 million to take back these lands.
LBCN and Mujur Zaman were not happy with TSKI’s actions and initiated various court actions against him and the Selangor State Government. The court actions were numerous but the inevitable conclusion is these lands were going to be taken back by the Selangor State Government one way or another. Under TSKI’s leadership, LBCN and Mujur Zaman could not prevent these lands from being taken back by the Selangor State Government.
However, similar to UNISEL’s case, when TSKI was ousted by Azmin Ali in 2014, LBCN and Mujur Zaman pursued settlement talks with the Selangor State Government in relation to these lands.
In 2016, under the shroud of secrecy, the Selangor State Government agreed to a settlement with LBCN and Mujur Zaman. The exact terms of the settlement is unknown but the Selangor State Government agreed to give back these lands to LBCN and Mujur Zaman.
The settlement is suspicious for many reasons.
Firstly, the exact terms were not made public. The subject matter is massive plots of land involving billions of ringgit yet Azmin Ali being the custodian for the people of Selangor is tight-lipped about the exact terms of settlement. There is lack of transparency and accountability.
Secondly, parts of these lands were then sold by LBCN and Mujur Zaman to Ecoworld for RM1.18 billion. The compensation received by the settlors only amounted to RM421 million. There is a balance of about RM758 million which is unaccounted for. There has been no explanation from Azmin Ali, LBCN and Mujur Zaman on this. Could the RM758 million been the profit made by LBCN and Mujur Zaman for its 20 odd-years of failure to develop these lands? Where did the RM758 million go to?
Thirdly, the settlement terms, as we know it, do not make any commercial sense. Knowing that the value of these lands are in excess of RM1 billion, why did Azmin Ali give back these lands to LBCN and Mujur Zaman for it to be sold by them and make profit? Why didn’t Azmin Ali take back these lands and sell it directly through an open tender and reap the profit for the Selangor State Government?
Fourthly, the laws and court actions were only leading towards the Selangor State Government taking back these lands. Why did Azmin Ali give up a very favourable position and instead settled on terms which were favourable to the LBCN and Mujur Zaman.
Something is amiss in UNISEL’s case and the Ijok Land Deal. Both cases were settled on terms which are favourable to the wrongdoers – JNSB in Unisel’s case and LBCN and Mujur Zaman in Ijok Land Deal.
One cannot help but infer that there is more than meets the eye in these out-of-court settlements. After all, out-of-court settlements is an effective way of allowing unjustifiable payments to be made. The litigation process, legal jargons and legal issues in out-of-court settlements make it difficult for the public and even the authorities to understand. When there is a lack of understanding, naturally there would be a lack of scrutiny.
It no wonder that out-of-court settlements is the preferred of money laundering.