This article first appeared in The Edge Financial Daily on November 21, 2018

KUALA LUMPUR: Former Menang Corp (M) Bhd deputy managing director (MD) Toh May Fook has conceded that he did not have the authority to appoint external advisers, without the approval of the board of directors, to review a questionable land deal undertaken by the group.

“I agree that my power as deputy managing director was provided for by the articles of association, and I cannot find [any] article that empowered me to review past land transactions of the company without going to the board,” said Toh, when testifying in the Industrial Court on Monday in a wrongful dismissal case brought by him against Menang.

Court chairman Rajendran Nayagam had asked Toh to justify his decision — with reference to the articles of association — of proceeding with the review in 2016 without the formal approval of the board.

Menang entered into the deal, involving a plot of land in Klang, in 2010.

During his tenure as deputy MD, which lasted less than three months from his appointment on April 26, 2016, Toh allegedly oversaw the appointments of Zaid Ibrahim & Co (Zico) to look into the legal matters in relation to the deal, ZJ Advisory to provide solutions on the matter, and PKF Advisory to conduct due diligence on the deal.

The appointments were allegedly carried out without formal approval from Menang’s board of directors.

On Monday, Menang’s legal counsel Rhuteran Sivagnanam asked Toh whether his insistence on investigating the land deal was aimed at toppling Datuk Eddie Shun Leong Kwong, who was then the MD of Menang.

“No, I did not go on a witch-hunt,” replied Toh. “As my opponent (Shun) has stated, I was meant to be his successor. I do not want to inherit something problematic, hence the appointment of PKF Advisory to conduct due diligence before I take over.”

One of the grounds cited by Menang to defend its decision to terminate Toh as deputy MD on July 19, 2016 was that he had undermined the board of directors’ decision by undertaking a review of the deal.

Last year, Shun was charged with allegedly cheating and dishonestly inducing delivery of the Klang plot. He pleaded not guilty to the offence and was later granted a discharge not amounting to an acquittal.

Rajendran questioned Toh’s decision to pursue the land deal matter after Menang’s board had allegedly rejected Zico’s legal opinion.

Denying that the board had rejected Zico’s opinion, Toh said: “They (the board) asked Datuk Shun to resolve [the matter] after Zico expressed their opinion in an informal board meeting.”

This, he added, did not amount to accepting or rejecting the law firm’s opinion.

Toh also disagreed with counsel Rhuteran, who suggested that the former had offered Shun a settlement plan in relation to the land deal after ZJ Advisory presented its proposed settlement of the matter Zico had raised.

This is contrary to Shun’s testimony earlier on Monday in which he accused Toh of making three attempts to offer him a settlement plan to resolve the land transaction matters after he (Shun) rejected ZJ Advisory’s proposals.

“After I rejected ZJ Advisory’s solutions, claimant (Toh) came back to me on three occasions,” he said, adding that each time Toh proposed different settlement plans at a lower compensation value.

In the previous hearing earlier this month, Shun had testified that among the solutions proposed by ZJ Advisory was for him to offer his shareholding in Menang as compensation to counter parties in the land deal, to return the land to the group, and to resign as MD and chief executive officer.

Earlier on Monday, Menang filed an application seeking Rajendran’s recusal for allegedly displaying prejudice during the previous hearing on Nov 8.

Citing Rajendran’s remarks at the previous hearing of the case as reported by The Edge Financial Daily, Menang’s lawyer Sanjay Mohan suggested that the court chairman may be having a preconceived opinion on the case.

Rajendran had described as “wild allegation” Shun’s statement that Toh had control of the information flow and influenced Zico to be biased in the probe.

Rajendran on Monday stood by his remarks saying it was made with reference to a specific issue (Zico’s opinion) and not the entire case.

“The judge has no duty to act in the interest of the lawyer’s client. Whether there are repercussions on the company’s share price or not when the press picked it up, that is not the court’s concern. It is the price both parties have to pay when they brought something to the court,” he said.

Rajendran also said even if there is an opinion on a specific issue, a judge has to keep his mind open on the case and has every right to change his mind before he makes the final judgement.

He proceeded to dismiss the application. Hearing of the case proper continues on Nov 27.