SHAH ALAM, March 5 — Tan Sri Khalid Ibrahim today denied allegations of a link between his recent settlement with Bank Islam Malaysia Berhad (BIMB) over a RM66 million loan and a controversial water restructuring agreement between Selangor and Putrajaya.

“There is no connection with the out-of-court settlement,” the Selangor mentri besar replied when asked by reporters at a news conference here today.

Last month, Khalid told The Malay Mail Online he had reached an out-of-court settlement with BIMB over a US$18.52 million (RM66.67 million) loan settlement suit, without compromising PKR or the PR coalition.

“Both parties have agreed to an out-of-court settlement. It has already been established,” he said then.

He declined to give further details but it is understood that the settlement was for an amount much lower than RM66.67 million.

Khalid had originally filed the suit against BIMB on May 18, 2007, claiming that the bank had wrongly disposed of his shares in Guthrie Berhad which he acquired through an Al-Bai Bithaman Ajil (BBA) loan facility on April 30, 2001 when he was Guthrie’s chief executive officer.

He had also sought a declaration that a collateral contract existed between him and the bank relating to the facility.

The bank, in its counter-suit, demanded the return of RM66.67 million, claiming that Abdul Khalid had breached its contract in the BBA loan facility following his failure to repay the loan. The two cases were eventually consolidated into one.

The hastily signed MoU on the water restructuring plans between Selangor and Putrajaya has added to the intrigue surrounding the March 23 Kajang by-election, with some PKR leaders questioning the timing of the deal and Khalid’s suit settlement.