Zahid intended to settle US$2m outstanding loan payment for hotel management firm using Yayasan Akalbudi funds, court told

Kenneth Tee
·5-min read
Datuk Seri Ahmad Zahid Hamidi is pictured at Kuala Lumpur Court Complex July 14, 2020. — Picture by Hari Anggara
Datuk Seri Ahmad Zahid Hamidi is pictured at Kuala Lumpur Court Complex July 14, 2020. — Picture by Hari Anggara

KUALA LUMPUR, July 14 — Datuk Seri Ahmad Zahid Hamidi had intended to settle an outstanding loan repayment of around US$2 million (RM8.5 million) belonging to a hotel management firm using funds from Yayasan Akalbudi in 2016, a witness told the High Court today.

Former Exim Bank Berhad chairman Datuk Mat Noor Nawi was testifying as the 76th prosecution witness in former deputy prime minister Zahid’s corruption, criminal breach of trust and money-laundering trial.

In his witness statement, Mat Noor said the hotel management company — Ri-Yaz Asset Sdn Bhd — had a loan agreement with the bank amounting to US$24.8 million for the purchase of a hotel project in Bali, Indonesia at the material time.

He then recalled receiving a phone call from Zahid’s daughter, Datuk Nurulhidayah Ahmad Zahid on May 19, 2016 informing that her father had wanted to speak to him.

“I was then informed by Zahid that Nurulhidayah was interested in taking over 60 per cent of the shares owned by one Tan Sri Rashid Manaf in Ri-Yaz Asset Sdn Bhd.

“Subsequent to the call, I was informed by Miss Norzilah, the chief executive of Exim Bank at that time, that Zahid wanted to meet me at the latter’s deputy prime minister office in Putrajaya on June 23, 2016,” he said, adding that the meeting eventually took place in order to seek approval for the share transfers between Nurulhidayah and Rashid.

According to Mat Noor, repayments were made quarterly annually for a period of eight years.  By June 2016, Ri-Yaz’s outstanding loan repayment with Exim Bank stood at US$2.058 million.

“(During the 30-minutes meeting) I did inform Zahid that the outstanding payment of US$2.058 million to the bank must be settled in full before any form of share transfers could take place between Nurulhidayah and Rashid.

“Zahid then informed that he was willing to make the advance payment using money from a foundation. However, he did not tell me the name of the foundation then,” he said, adding that the meeting had in principle agreed for the shares takeover subjected to the terms of repayment.

Subjected to the terms of repayment, Mat Nor also told the court that Rashid was chosen to be maintained as the principle loan guarantor for the Exim Bank loan despite Nurulhidayah’s takeover of the shares during a Bank Credit Committee meeting on December 14, 2016.

“The bank made the decision for Rashid to remain as the loan guarantor because of his net worth, corporate strength and technical capability in monitoring the project as compared to Nurul.

“That is why the bank preferred for Rashid to remain within Ri-Yaz Asset with the condition he hold at least 10 per cent of the shares in the company,” he said.

Mat Nor said the US$ 2.058 million was subsequently paid in full to Exim Bank on July 5, 2016.

During cross-examination, Mat Nor disagreed with Zahid’s lawyer Datuk Ahmad Zaidi Zainal on whether the advance payment was a form of investment on Yayasan Akalbudi’s part to Ri-Yaz Asset.

“To me it is not investment activity, it is an action of making an advance payment for a company which needed to be settled.

“The whole idea is advancement, not investment. So I don’t think its a form of investment since you would make a profit or losses if you actually invested,” he said.

When pressed further on whether Zahid had actually used money from Yayasan Akalbudi to make that advance payment, Mat Nor said he had no knowledge whether the source of payment fund originated from the foundation.

“Zahid’s intention (during the June 2016 meeting) was to make the advance payment. However when the true payment came in, Exim Bank was informed that it came from Ri-Yaz Asset,” he said.

Later, former Exim Bank Berhad chief executive Norlizah Mohammed and the 77th prosecution witness also affirmed Mat Nor’s testimony in court on the June 23, 2016 meeting.

She explained that Zahid informed her of his daughter expressing interest in procuring shares within Ri-Yaz Asset and subsequently asked the bank to assist in the share transfer process.

She also similarly disagreed to the suggestion by Zahid’s lawyer that the advanced payment made was a form of investment by Yayasan Akalbudi.

“I disagree. This is because during the meeting there was nothing about investment that was discussed between Zahid and Nurulhidayah. All that was discussed was the loan between Ri-Yaz Asset and Exim Bank.

“What we were informed was that Nurulhidayah wanted to purchase shares from the company,” she said.

In this trial, Zahid is facing 47 charges, namely 12 counts of criminal breach of trust in relation to charitable organisation Yayasan Akalbudi’s funds, 27 counts of money-laundering, and eight counts of bribery charges.

In the money-laundering charges, Zahid is accused of ordering the transferring of millions of ringgit in alleged illegal funds into fixed deposits via law firm Lewis & Co’s clients’ account. A clients’ account is typically where law firms hold money as a trustee or on trust for their clients.


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