This article first appeared in The Edge Financial Daily on November 22, 2017

KUALA LUMPUR: Puncak Niaga Holdings Bhd, controlled by tycoon Tan Sri Rozali Ismail, has filed a RM14 billion lawsuit against Selangor Menteri Besar Datuk Seri Mohamed Azmin Ali, his predecessor Tan Sri Abdul Khalid Ibrahim and the state government over the takeover of the state’s water industry.

Puncak Niaga claims Abdul Khalid and Mohamed Azmin had abused their powers by threatening to cause, or attempting to cause, the federal government to invoke the use of the Water Services Industry Act 2006 to force a takeover of the state’s water industry.

The Selangor government is vicariously liable for the acts of Abdul Khalid and Mohamed Azmin, Puncak Niaga said in a filing with Bursa Malaysia yesterday.

Puncak Niaga is claiming damages, interest on damages and costs of the difference between the value of PNSB Water Sdn Bhd [formerly known as Puncak Niaga (M) Sdn Bhd] and the Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) at RM2.08 billion to RM2.35 billion, and the actual purchase consideration of RM1.55 billion under the share purchase agreement dated Nov 11, 2014 between Puncak Niaga and Pengurusan Air Selangor Sdn Bhd.

The company is also claiming for loss of business opportunities, locally and abroad, totalling RM13.5 billion.

Puncak Niaga said after several attempts to effect personal service since Oct 31, its solicitors have managed to serve the sealed writ of summons and the statement of claim dated Oct 27. Abdul Khalid was served, via his solicitors, on Nov 2, Mohamed Azmin on Nov 21, and the Selangor government on Nov 6, it said. The matter has been fixed for case management at the Shah Alam High Court on Nov 28.

The disposal of PNSB and Syabas, part of the Selangor’s water industry consolidation, was completed on Oct 15, 2015 for RM1.55 billion. According to Puncak Niaga’s 2015 annual report, the net cash inflow from the sale was RM1.44 billion.  

The water assets’ consolidation is still ongoing as the takeover of Syarikat Pengeluar Air Selangor Sdn Bhd has not been completed. Puncak Niaga’s share price closed down 0.5 sen or 0.75% at 66.5 sen yesterday, with a market capitalisation of RM297 million.