KUALA LUMPUR, July 29 ― Testifying in the High Court today, Ri-Yaz Group managing director Datuk Mohammad Shaheen Shah Mohd Sidek said he was shocked when the company was asked to return a “deposit” exceeding over RM8 million, after a deal for the sale of 60 per cent of shares in a hotel management firm to Datuk Seri Ahmad Zahid Hamidi’s daughter did not go through.
He is the 84th prosecution witness in Zahid’s trial involving 47 charges.
In his testimony today, Shaheen said the Ri-Yaz Group had in 2015 faced financial difficulties in repaying its US$24.8 million Exim Bank loan for a hotel in Bali due to Indonesia’s policy then for all business transactions to be in rupiah while the hotel was using US currency for its transactions.
Shaheen said Ri-Yaz Group chairman Tan Sri Abdul Rashid Manaf had then proposed to either sell off the Bali hotel or his 60 per cent stake to save the company.
Shaheen said he had in 2016 met Datuk Nurulhidayah Ahmad Zahid, daughter to Zahid who was then deputy prime minister, in an Indonesia-Malaysia Youth Business Council event in Kuala Lumpur where she had expressed interest in the hotel industry.
Shaheen said he had initially asked if Nurulhidayah knew of any prospective buyers for the Bali hotel or Abdul Rashid’s stake in Ri-Yaz Group, noting that Nurulhidayah later expressed a personal interest to buy the stake after viewing the company’s proposal.
“Datuk Nurulhidayah asked me to meet Datuk Seri Ahmad Zahid Hamidi to show my company’s proposal as Datuk Nurulhidayah was interested to buy Tan Sri Rashid’s share in Ri-Yaz Group but needed consent from Datuk Seri Ahmad Zahid Hamidi first,” the 46-year-old Shaheen said.
Following his subsequent meeting with Zahid and Nurulhidayah in a meeting room in the Shangri La Hotel in Putrajaya, Shaheen said Nurulhidayah had asked him to bring Abdul Rashid to meet with Zahid at the latter’s Country Heights residence in Kajang.
In the Country Heights meeting that he attended with Abdul Rashid, Nurulhidayah, Zahid, Shaheen said that Abdul Rashid had agreed to sell off his 60 per cent stake in Ri-Yaz Group with four conditions including for Nurulhidayah to pay Ri-Yaz’s outstanding loan installment to Exim Bank and the restructuring of the loan while also removing Abdul Rashid as the guarantor, subject to negotiations with Exim Bank.
Following a meeting with Exim Bank’s CEO and chairman at the Home Ministry’s office in mid-2016 that was attended by Shaheen, Nurulhidayah, and Zahid, Shaheen said that the bank had agreed to the request to restructure Ri-Yaz’s loan and to replace Abdul Rashid’s name with Nurulhidayah’s name as the loan guarantor.
Shaheen said Nurulhidayah contacted him a few days after the Home Ministry meeting, noting that she had said her lawyers at Lewis & Co would call him to prepare a cheque to pay for the outstanding loan installment to Exim Bank.
Shaheen said he told her the amount was RM8,602,920 and had to be made out to Ri-Yaz Group’s Ri-Yaz Assets Sdn Bhd.
Shaheen verified that he had personally received Lewis & Co’s RM8,602,920 Maybank cheque dated June 30, 2016 made out to Lewis & Co, noting however that the actual payment that he made to Exim Bank was for the sum of RM8,348,040.90 or US$2,058,500 due to the currency exchange rates then and that he had then returned the excess RM254,879.10 via a July 15, 2016 CIMB cheque to Lewis & Co.
According to Shaheen, he had on December 28, 2016 received a notification from Exim Bank that it was agreeable to restructure the US$24.8 million loan by extending the loan period but that the bank wanted Abdul Rashid to remain as guarantor and to hold a 10 per cent stake in Ri-Yaz Group.
With Abdul Rashid not being agreeable to remain as Ri-Yaz’s loan guarantor, Shaheen said Abdul Rashid had sought to contact both Nurulhidayah and Zahid to discuss the matter including by leaving a text message to Zahid.
“As I recall, after a day or two later, I was contacted by Datuk Nurulhidayah and asked me to return the RM8,348,040.90 immediately as that money is a foundation’s money. I was not told which foundation,” he said, adding that Nurulhidayah had arranged for Zahid to meet with Abdul Rashid at the latter’s request to discuss the matter first.
Shaheen said that Abdul Rashid ― had following the latter’s meeting with Zahid ― notified him that Zahid had asked for Ri-Yaz Group to immediately return the funds and also noted that Abdul Rashid had instructed for Nurulhidayah’s name to be removed as Ri-Yaz Group’s director.
Shaheen said that he had then understood that this meant that the sale of Abdul Rashid’s stake to Nurulhidayah did not succeed. Shaheen confirmed that he had never sighted the July 1, 2016 share sale and purchase agreement between Abdul Rashid and Nurulhidayah as the transactions were meant to be between the two of them.
Confirming that his company had later returned the RM8,348,040.90 amount via a May 2, 2017 CIMB cheque to Lewis & Co since the deal fell through and as the law firm was the one that had paid the initial sum, Shaheen today told deputy public prosecutor Ahmad Sazilee Abdul Khairi that he was shocked when he first found out that the funds had to be returned.
“A few months after receiving the initial RM8.6 million amount, after a few months ― I don’t remember the date, but I met with Datuk Seri Zahid Hamidi and Datuk Nurulhidayah in the office, and Datuk Seri Zahid Hamidi himself asked me, when the money that was given would be returned as this money is a foundation’s money but I don’t know which foundation. But he said this money must be returned and when Ri-Yaz Assets would return this,” Shaheen said, adding however that he did not ask why the RM8.3 million had to be paid to Lewis & Co and not the foundation.
When asked if this was normal in business dealings, Shaheen said: “When told this, I don’t know what is the content in the share purchase agreement, so I was shocked because I had to pay back these funds. I thought this money is a deposit for the share purchase.”
Asked if deposits typically have to be returned if agreements were cancelled, Shaheen said he did not think such deposits have to be returned.
Shaheen said the law firm Lewis & Co had told him the RM8.6 million cheque was as deposit for the purchase of the stake in Ri-Yaz Assets Sdn Bhd.
Asked by Sazilee, Shaheen confirmed that the topics such as getting a loan or investment from a foundation was never raised in the meetings with Zahid regarding Nurulhidayah’s planned purchase of Abdul Rashid’s stake in Ri-Yaz Assets Sdn Bhd, further confirming that the meetings never discussed having Nurulhidayah act as a representative or proxy.
While Zahid’s lawyer Mohd Haziq Dhiyauddin Razali suggested that the Ri-Yaz share purchase was meant to be an investment by Yayasan Akalbudi and that Nurulhidayah was placed as a Ri-Yaz director to monitor Yayasan Akalbudi’s investment in the company, Shaheen said he did not know about these.
While Haziq further suggested that the deal for the share purchase did not go through as it would not result in profits, Shaheen said he did not know of this and later told Sazilee that the topic of financial returns or a foundation’s investment was never mentioned during meetings with Zahid on the deal.
Yesterday, Abdul Rashid testified as the 83rd prosecution witness in this trial of the aborted deal to share his 60 per cent stake to Nurulhidayah, where he similarly testified that the sum of over RM8 million was a “deposit” for the deal and not a loan or investment or financial aid to Ri-Yaz.
In this trial, Zahid ― who is a former deputy prime minister and currently the Umno president ― is facing 47 charges, namely 12 counts of criminal breach of trust in relation to charitable foundation Yayasan Akalbudi’s funds, 27 counts of money-laundering, and eight counts of bribery charges.
The trial before High Court judge Collin Lawrence Sequerah resumes tomorrow.
