(June 30): A former aide to Tan Sri Abdul Khalid Ibrahim and seven others are being sued after they failed to return RM2.7 million in severance payments made just before the former Selangor menteri besar left office last year.

Lawyer Shahir Razak, who is appearing for Selangor Menteri Besar Incorporated (MBI), said legal action began after the defendants failed to meet his client’s demands.

"The suit was filed last month following instructions by my client after the defendants refused to return the money," he told The Malaysian Insider.

He said MBI also wants the defendants to pay a further 5 % interest on the amount owed, other financial compensation and costs if the court ruled in their favour.

The suit was filed in the Shah Alam High Court on May 11 on grounds the defendants were not entitled to the compensation.

Topping the list of defendants is Faekah Husin, the former MBI chief executive officer, who is represented by Edmund Bon.

The others are Rohani Talib, Arfa'eza Abdul Aziz, Mustapha Mohd Talib, Rahimah Kamarudin, Dr Sulaiman Masri, Abdul Halim Mohamed Yusof and Tuan Nazuri Tuan Ismail.

Shahir said the case would be mentioned before a senior assistant registrar on July 28 for parties to take further instructions.

He said MBI was prepared to drop the action against the defendants if they were prepared to return the amount demanded.

In January, Faekah denied there was any wrongdoing in the severance payments that she and others received.

Faekah said she had received a letter from the state, demanding that she return the "golden handshake" received last November from Khalid in his last days in office.

"Since this issue is about the law, all those who received the money under the mutual separation scheme (MSS) will engage lawyers to scrutinise the letter of demand and take the necessary steps," she had said in a statement on January 6.

Faekah denied that the payout through MSS was illegal and was made without any approval.

She said the letter of demand had also failed to clearly state what procedures and financial regulations were violated when the payments were made.

This comes after Selangor Menteri Besar Mohamed Azmin Ali on January 3 ordered the former aides to return the “golden handshake” – given when Khalid was holding office – within 14 days from the receipt of written notice from MBI.

Azmin said an investigation found violations in terms of procedures and financial regulations when the payments were made to the eight aides.

It was reported that RM2.27 million in compensation and RM376,000 in lieu of three months' notice were allegedly paid to Khalid's eight members of staff.

Faekah allegedly received the highest amount of RM695,400, in a document sighted by The Malaysian Insider.

An 11-page state treasury investigation on the severance package found that payments had not been done according to procedure.

The report, distributed at the state assembly sitting last December, said the compensation to Khalid's staff, who also quit when he stepped down three months prior to that, violated the terms and conditions of their employment letters.

Faekah said she ordered her lawyer to look at every legal angle in order to counter the demand and to seek damages for the breach of the terms of the MSS and the humiliation she faced over the issue.

Her lawyer, Bon, told The Malaysian Insider they have yet to file the defence.

"Our clients will vigorously defend the suit. The basis of MBI's claim is flawed," Bon said.

"The case appears to be motivated to embarrass the defendants and Khalid."

Azmin had said that action would be taken against those who failed to comply with the notice.

He said once they have returned the money, MBI would review the amount they should have been paid according to the current allocation.

Khalid, however, defended the payout, saying the payments were made under a voluntary separation scheme (VSS) offered to the eight when he left office.

He added that the payout made up less than 2% of MBI's RM112 million cash reserve.

PKR sacked Khalid last August after he failed to attend a disciplinary committee hearing over allegations concerning Selangor's water-restructuring exercise, his debt settlement with Bank Islam and the proposed Kinrara-Damansara Expressway.

These came amid a tussle for the menteri besar position that started early last year, with the PKR leadership wanting him to step down to make way for party president Datuk Seri Dr Wan Azizah Wan Ismail.

The saga ended when the Sultan of Selangor appointed PKR deputy president Azmin as the new menteri besar in September. – The Malaysian Insider