By V. Anbalagan | Free Malaysia Today

The Federal Court was told that former Selangor menteri besar Khalid Ibrahim can override decisions made by the Menteri Besar Incorporated board of directors.

Former Selangor menteri besar Khalid Ibrahim was entitled to make payments amounting to RM2.7 million to his eight staff members as he was the sole legal entity under Menteri Besar Incorporated (MBI), the Federal Court heard today.

Lawyer Edmund Bon Tai Soon said any person holding the post of Selangor menteri besar makes decisions unilaterally, unlike in several states like Kelantan and Melaka where there is a committee.

“In Selangor, there is the MBI board of directors and it merely acts in an advisory role to the menteri besar, who can override them,” he said in his submission before a five-member bench, chaired by Rohana Yusuf.

Bon is appearing for Faekah Husin, the former chief executive of MBI, who was paid RM695,400 in compensation, and ex-chief operating officer Rohani Talib, who received RM524,400.

Other support staff were Arfa’eza Abdul Aziz (who received RM476,935), Mustapha Mohd Talib (RM265,320), Rahimah Kamarudin (RM265,650), Sulaiman Masri (RM182,385), Abdul Halim Mohamed Yusof (RM186,300), and Tuan Nazuri Tuan Ismail (RM115,200).

In 2017, the High Court held that the payments to all eight had been legally made. MBI then appealed.

In May 2018, the Court of Appeal held that Khalid was not authorised to approve the payments without going through the MBI board, which consisted of the state legal adviser and financial officer.

Bon said there was a board meeting on Aug 25, 2014 and it was agreed that the payment be made under a voluntary separation scheme (VSS).

He said Faekah had prepared three options for the MBI to choose from and Khalid went for the VSS, which the board approved.

“The VSS arose out of a contract termination and the board cannot override the MB (Khalid),” he said.

Bon said the claims against Faekeh and Rohani, being the executives of MBI, for conspiracy, breach of trust and fiduciary duty for not getting approval of the board, were misplaced.

“There is no evidence that the appellants knew what the board was going to decide,” he added.

Bon said MBI should instead have filed a claim against Khalid and not the innocent employees.

Lawyer Gopal Sri Ram, who represented MBI, said the four legal questions approved by a Federal Court bench last year need not be answered as the bone of contention was about contract of employment.

“For example, Faekah is an employee of MBI, not the menteri besar. Khalid approved payment as chairman of MBI, not as menteri besar,” he said.

Sri Ram said there was no provision for VSS under the terms of employment contract between MBI and the eight.

“They are only entitled for three months’ compensation,” he said, adding that the payments were not authorised under their contract.

Sri Ram said Faekah and Rohani prepared a memo for Khalid to make enormous payments from public funds.

“In fact, the two were in conflict when deciding on the payments for themselves and the rest,” he said, adding the board did not make a decision but only Khalid.

Sri Ram said the payments were an unjust enrichment which they were not entitled to receive under the contract or a written law.

The payments were awarded after Khalid was removed from office in 2014 following the “Kajang Move” by PKR that ousted him.

MBI filed the suit in 2015 to reclaim the money paid to them through a VSS.

The court has reserved judgment.