Asked why Zahid's Yayasan Akalbudi gave RM10m to help ‘rich people’s company’, Datuk K says it was investing with ‘clear conscience’

KUALA LUMPUR, Aug 21 — Singer Datuk Seri Siti Nurhaliza's businessman husband Datuk Seri Khalid Mohamad Jiwa today defended a RM10 million cheque from Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi's charitable organisation Yayasan Akalbudi in 2015 to the company Armada Holdings Sdn Bhd.

Khalid, better known by the moniker Datuk K, was testifying as the eighth defence witness for Zahid in the latter's trial involving 47 charges.

Throughout his testimony, Khalid kept insisting that the RM10 million was an investment by Yayasan Akalbudi into his friend and business partner's firm Armada, while the prosecution argued that it was a loan by Yayasan Akalbudi to the company.

Deputy public prosecutor Datuk Mohd Dusuki Mokhtar said that foundations are aimed at giving assistance to those who need help such as the poor and orphans or welfare bodies, but Khalid “begged to differ”, saying he also has a foundation known as Yayasan Nurjiwa.

“My yayasan has been established for quite long now, certainly we do help victims or those needing help, but at the same time, yayasan needs to find money. Yayasan needs funds to continue to give assistance,” Khalid told the High Court.

When Dusuki suggested that foundations should not use the method such as in the case of Yayasan Akalbudi's RM10 million to Armada Holdings, Khalid said that foundations have to find money through any method, and that includes through “investments”.

“But not through this method, giving loans to rich people's company who are not poor, who need help because of poverty,” Dusuki replied.

But Khalid insisted that Yayasan Akalbudi gave the RM10 million as an “investment” with the hopes of higher returns to enable the foundation to contribute better.

“The foundation did that with clear conscience to get returns, not to help the rich,” the defence witness said.

Khalid said that he knows what foundations can and cannot do, adding that they are not barred from carrying out investments.

Explaining how Zahid ended up giving RM10 million via a Yayasan Akalbudi cheque to Armada Holdings, Khalid said his hometown friend from Kedah and business partner Datuk Wasi Khan @ Wasiyu Zama Israr's company Armada Holdings wanted to bid for a contract to supply coal to energy provider Tenaga Nasional Berhad (TNB).

But as Armada Holdings did not have RM10 million as paid-up capital as required by TNB in order to bid for the project, Khalid said he had helped facilitate or arrange a meeting with Zahid as requested by Wasi.

Khalid insisted that the duo's 2015 meeting with Zahid at the latter's office at the Home Ministry in Putrajaya was not aimed at asking to borrow the required RM10 million, but was intended to ask for him to intervene by asking TNB to reduce the paid-up capital requirement for Armada Holdings to RM5 million only.

“Because we asked for jasa Deputy Prime Minister Datuk Seri Zahid then in his capacity as DPM, surely he has the power to refer to discretion of TNB to give exception to this company to participate at a lower paid-up capital,” Khalid said.

He added that the reduction to RM5 million would be “nothing significant” in terms of paid-up capital difference.

“But Datuk Seri Zahid did not do what we asked, but he was kind enough, he was generous to give more than we expected. We expected paid-up capital be reduced, or if he wants to help then RM5 million, but he helped RM10 million.

“Here I see two things. One, his discretion and generosity. And his intention to invest, because money in fixed deposits won't give high returns compared to investments in Armada, so of course as someone who is qualified and efficient, wise in financial matters, surely he will invest in something with higher returns,” he said under questioning from Zahid's lawyer Hamidi Mohd Noh.

He had earlier insisted that Zahid had voluntarily offered the RM10 million and that both he and Wasi did not go there with the intention of borrowing money.

Datuk Seri Ahmad Zahid Hamidi at the Kuala Lumpur High Court August 21, 2023. — Picture by Sayuti Zainudin

Khalid believed Zahid was trying to be “modest” by saying that it was beyond his scope of powers and that he could not ask TNB to reduce Armada's paid-up capital requirement to RM5 million.

“But to me, I know that if he wants to push for the paid-up capital to be reduced, it is not something that is impossible, but he chose the other option, which is to help from the financial aspect. When he does that, he need not involve TNB. He is confident with me and the business and he is kind enough, instead of giving RM5 million, he gave RM10 million so we can participate in the coal business,” he said.

Yayasan Akalbudi had via a November 16, 2015 cheque issued RM10 million for Armada Holdings.

But the Companies Commission of Malaysia's records shown in court today showed that the company was only established on December 3, 2015 while the cheque was banked into Armada's bank account on December 7, 2015.

Previously, Wasi as the 21st prosecution witness told the court that the RM10 million cheque from Yayasan Akalbudi was given without any letter of agreement between him and Zahid as it was based on trust.

He added that Zahid had offered the short-term loan due to his friendship with Khalid and due to Armada's potential.

Armada on February 12, 2016 issued two cheques for the sum of RM10 million and a RM69,722.65 sum to Yayasan Akalbudi, with Khalid preferring to describe the latter sum as a “return” on the purported investment, while the prosecution maintains that it was an interest for the loan.

Wasi previously said there was no “black-and-white” letter signed between Armada Holdings and Yayasan Akalbudi for the repayment of the RM10 million.

Zahid's lawyers have been trying to argue that the RM10 million was an investment as it would fit in one of the objectives of Yayasan Akalbudi's predecessor Yayasan Budi's company constitution if the board of trustees deems it fit to make such investments, while the prosecution has been arguing that it is not an investment but a loan which is not part of Yayasan Akalbudi's objectives and would amount to a criminal breach of trust.

Zahid, who is also Umno president and Barisan Nasional chairman, is facing 47 charges in this trial.

The 47 charges are namely, 12 counts of criminal breach of trust in relation to over RM31 million of charitable foundation Yayasan Akalbudi’s funds, 27 counts of money laundering, and eight counts of bribery charges of over RM21.25 million in alleged bribes.

The 12 counts of criminal breach of trust is in relation to the alleged misappropriation of Yayasan Akalbudi funds, namely RM1.3 million via 43 cheques for his and his wife’s credit card bills; RM107,509.55 via three cheques for vehicle insurance and road tax for 20 privately-owned vehicles; a RM1.3 million cheque to the police’s football association; a RM10 million cheque for a loan to Armada Holdings Sdn Bhd; RM360,000 via two cheques to political consultancy firm TS Consultancy & Resources; and over RM17.9 million of funds transferred from Yayasan Akalbudi to law firm Lewis & Co.

Yayasan Akalbudi was founded with the purported objectives of receiving and administering funds for the eradication of poverty and enhancing the welfare of the poor.