NFCorp CBT: No Case


On March 12, Salleh Ismail was charged for Criminal Breach of Trust and violating the Companies Act on 3 counts relating to RM49 million. He pleaded not guilty. (read here.)

We have all been following closely to the NFC debacle and how the Opposition Parties, particularly the PKR has played this to the maximum possible. PKR has slowly revealed piece by piece all the dirty laundry related to NFC ever since the Auditor General Report 2010 was tabled in Parliament last October.

Umno on the other hand has been put on the back foot trying to shield the party yet giving all the leeway for Shahrizat to melt into the background. Because this debacle has to do with the raising of cows, the Opposition Parties have been very successful to relate to the various communities across the country on the magnitude of corruption alleged and the people are agreeing as well. This does not augur well for Umno and BN and finally it is curtains down for Shahrizat come 8 April when her senator term expires. Yes, she is not resigning, just expiring and not renewed.

Now with her husband charged in court for CBT, it appears that the BN Government finally came to their senses albeit late. Umno will not want Shahrizat and the NFC debacle to remain its Archilles’ heel. Umno has been stumbling all over itself since the beginning and this latest episode should nail the noise shut.

However, the reality may show that this action is too little, too late. It may very well be a shadow play or wayang kulit that will end up having Salleh acquitted instead. And the reasons may be quite simple.

CBT not filed by those who entrusted Salleh Ismail

Firstly, we don’t quite know who brought the suit against Salleh. Was it the AG or was it the shareholders of NFCorp? As far as we can tell, the Government has no share in NFCorp so how can the AG bring a charge against him? Obviously, the shareholders of NFCorp being Aeroscience who are owned by Salleh and his children will never do such a thing. As such, the Government has no basis to bring this suit although it is under the Police purview of a criminal act. But is there really a CBT case?

Paperwork all clear and auditable

Salleh Ismail and his children are not stupid people. They also can hire very good accountants to keep the books properly. As long as the management and the board of directors have signed off all approvals for every transaction, including those that Rafizi Ramli and Zuraida Kamaruddin of PKR alleged to be highly unusual and abnormal, there is really no breach of trust on Salleh’s part.

This is a private entity, a Sendirian Berhad. Unless they forgot a RM49 million approval with a Board of Directors authorization, Salleh and children can pretty much do what they want with the funds in the company. Even then, the Board can retrospectively sign off and the paperwork is in order.

Furthermore, the amount of funds released to NFCorp was much more than that. According to the AG Report 2010, it amounted to RM130 million. So why not RM130 million but RM49 million?

Why did MOF disburse the monies to NFC?

The party with the legal standing to file a case is MOF to recover the loan since it was reported that NFCorp had defaulted in repayment. In fact, reports had it that NFCorp has yet to make any payment whatsoever. However, only MOF will know as it is not public knowledge at this time.

Now, if the AG is representing MOF to file the suit against NFCorp, it cannot be CBT as the Government of Malaysia has no locus standi in the matter. It is neither a shareholder or an executive party in NFCorp. MOF is like a bank lending out money to NFCorp at a very low rate. More interesting is a report saying that there is no collateral nor Director’s personal undertaking to obtain the loan. What this means is that in the worst case event that the MOF did not succeed in recovering the loan after exhausting all avenues, NFCorp can file for bankruptcy and close shop and the entire loan amount may not ever be recovered.

Certainly, nobody wants to open the pandora’s box of letting the public ask why in the world the MOF released the RM130 million to NFCorp if they had not met any milestones. Perhaps there was none to begin with and that will force another set of questions on the accountability of MOF on public funds.


The court will find that the AG has no locus standi in the case or that there is no CBT as there will not be a prima facie case presented or the case will be ever so weak that it will not prove guilt of Salleh Ismail beyond a shadow of doubt.

Whatever the case may be, it does appear that Salleh Ismail will be acquitted without his defense being called.

The question is by when.

The current action by the Government is to pacify the people and pass the attention from Umno to the court. This is a brilliant and ingenious strategy to silence the Opposition and to give some semblance of accountability to the people. It is an attempt to show that Umno will not protect its own when it comes to blatant corruption, especially those they have not choice they cannot defend any longer.

For now, Umno can defer to the court whenever NFC comes up and comment no more as there is nothing they can say to make things better.

After the GE13 will be the best time to conclude the CBT case and acquit Salleh Ismail so that Shahrizat and family can quietly go into rich retirement.

This is based on the assumption that BN remains the elected Government of the day.


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