The Perwaja Steel Saga

Posted on 27 June 2007 - 08:23am

KUALA LUMPUR (June 26, 2007): After an expensive three-year criminal breach of trust (CBT) trial, the prosecution's case against Tan Sri Eric Chia Eng Hock collapsed today, negated by its own evidence and crippled by its failure to call essential witnesses.

Sessions Court judge Akhtar Tahir said this of the prosecution in acquitting and discharging the 74-year-old former Perwaja Steel boss of a RM76.4 million embezzlement charge without calling for his defence.

"In this case, the court was deprived of making the maximum evaluation on whether the prosecution has proven a prima facie case as the material witness were not even called," he said.

"For all the reasons outlined, I have decided that the prosecution has failed in proving a prima facie case against the accused in both the main and alternative charge."

Chia, who was also former managing director of Perwaja Rolling Mill and Development Sdn Bhd, was charged with dishonestly authorising the payment of RM76.4 million into the account of Frilsham Enterprise Incorporated with American Express Bank Ltd in Hongkong for technical assistance, when no such payment was due.

Alternatively, he was charged with dishonestly disposing of the funds by entering into an agreement with NKK Corporation and authorising the payment of the amount without the approval of the board of directors or tender committee of Perwaja Rolling Mill and Development.

Chia told reporters he had no cause to celebrate the court decision as the case had "ruined my family", his children had gone to work overseas and that his friends had deserted him.

Earlier, Akhtar said the prosecution's documents, and the sequence of information in the documents, go against its own contention.

"The prosecution's case was also not supported by its own witness who testified that payment had to be made before the commencement of technical assistance," he said.

He also wondered why the prosecution did not pursue two important witnesses who could have provided crucial pieces of evidence.

È then company secretary R.R. Durai Rajasingam who drafted the technical assistance agreements regarding the RM76.4 million payment, and took down minutes of the board meeting, as he was the best person to testify if the technical assistance agreement was submitted or not.

"Since (Durai) Rajasingam was not called, the court could not make a decision on the matter."

NKK Corporation general manager N. Otani, whose signature in the letter claiming for the payment was allegedly forged.

Akhtar said Otani would have been the best person to verify his signature and without that, the court had to fall back on the chemist evidence which was not strong or conclusive.

Akhtar also said the conduct of Chia at the time of event did not indicate that he was trying to cover his tracks, as he would not have made a written endorsement if the payment was not due.

"If he wanted to cover his tracks, he would have done so then and not a year later," said Akhtar.

Chia was represented by Datuk Muhammad Shafee Abdullah while senior Deputy Public Prosecutor Datuk Yusof Zainal Abiden and DPP Nordin Hassan prosecuted.

Short takes:

Chia's counsel Datuk Muhammad Shafee Abdullah said: "The irony of the situation is this - every document produced by the prosecution supports the defence.

"Assuming you forget all witnesses, and just tender the document - Tan Sri is acquitted- just on the document," he said.

"So from the begining we wondered why the charge was ever brought in this case."

Muhammad Shafee was interruped at this juncture by Chia who likened the prosecution to blind men playing cricket.

"They couldn't see the ball, they couldn't see the stick, they couldn't see the direction so if you send blind men to play cricket this is what will happen," he said.

"I will not be surprised if they will appeal at this moment," Muhammad Shafee said.

It was not an easy case because there was a lot of prejudice and spinning of contents of the document by the procecution, said Muhammad Shafee.

"My frank opinion that this case was not politically motivated, but I think there has been a great deal of pressure because this case has been there forever," he said.

"But we knew from the begining there was no case," said Muhammed Shafee who admitted that he was prejudiced against Chia's case based on the news reports he had read due to the spinning of the story.

"But when I came in and looked at the documents, I was pleasantly surprised that I have more than an arguable case," he said.

Chia turns philosophical

Ex-Perwaja Steel MD speaks of oil and water, his family ... and God

KUALA LUMPUR (June 26, 2007): Former Perwaja Steel managing director Tan Sri Eric Chia Eng Hock turned philosophical in trying to describe what had happened to him in the last 11 years.

"When there is oil and water mixed together it is murky. If you wait for a while, the oil will float. You understand my meaning?" he told reporters who had approached him for a response to the court decision which was in his favour.

Chia, who was acquitted and discharged from criminal breach of trust (CBT) charges, said the accusations and case against him caused the break-up of his family and resulted in him losing a lot of friends.

Sitting in the lawyers gallery after the hearing, Chia likened his situation to oil and water.

Asked if he was going to celebrate the court's decision, he gave an emphatic "no", saying the case had "ruined my family".

"Because of what happened, my son left to work in the US, my daughter in Hongkong, and I live alone," he said.

Asked why they left, he said: "Shame, because of shame."

"Go to Hongkong, nobody knows her, go to US nobody knows him. Don't you think I broke my family?" asked Chia.

He said he now meets them only once a year and speaks to them over the phone once a month.

"So, whoever made the slander will have to pay someday," he said.

Asked if he was worried if the prosecution would appeal, Chia said: "Go ahead. I'm not afraid."

Asked how he felt now that all had been said and done, he replied: "When I was in UMW, when I was in EON, at that time I put my hands on the table and my hands will meet 200 other hands with so many fingers, each of them are friends.

"Because of this case, I put my hand on this table, there're not enough friends, because they have all run away from me, some think that I'm a crook."

He said he could now move on, but added: "But what about my broken family, you don't have a family ... how do you proceed with your life?"

"My children have careers abroad and now at this age, how do they come back and start a career here?

"This is my country, this is my home, I will live and die here. I'm proud of my country."

"Dr Mahathir (former prime minister Tun Dr Mahathir Mohamad) told me that when I came from Singapore at the age of 17, I only had RM5 in my pocket, this country has blessed me and made me a rich man, and he told me Perwaja needs somebody. "Kau kena bayar budi kepada bumi (you have to pay gratitude to this land)," Chia said, adding that this was in 1988.

Asked if he felt vindicated, Chia said: "Yes, I have wasted 11 years. (Datuk Seri) Anwar Ibrahim went to Parliament on May 26, 1996 ... check your records ... he said I abused my position in Perwaja and because of that Perwaja lost money and went bankrupt," he said.

"Every purchase that Perwaja made was guaranteed by the Ministry of Finance, so how can I abuse the purchase of equipment? Without the government guarantee, I cannot purchase."

Asked if he felt angry, Chia said: "I leave it to God, you want to hear? You know how angry God is?

"On May 26, 1996, Datuk Anwar Ibrahim went to Parliament and accused me of abusing my position and cheating Perwaja.

"Aug 8, 1998 - two years and four months later - Datuk Anwar went to jail ... the deputy prime minister went to jail. God was angry.

"You don't believe in God, you'd better believe. Believe in the mercy of the Father of Heaven. Don't bluff, don't cheat, don't slander. Wrong is wrong, right is right.

"If you have wronged somebody, be a gentleman and ask for forgiveness. When you have forgiveness from the man you have wronged, God will pardon you. Till then, God will never pardon."

The Perwaja Steel Saga

1988: Tan Sri Eric Chia handpicked by then premier Tun Dr Mahathir Mohamad to turn loss-making Perwaja Steel around.

1995: Chia resigned as managing director.

1996: Perwaja declared insolvent, with debts and losses totalling RM10 billion. Police and ACA launch investigations.

May 1996: Former deputy prime minister and finance minister Datuk Seri Anwar Ibrahim blamed Chia in Parliament for Perwaja's loss.

1999: Then ACA director-general Datuk Ahmad Zaki Husin said several matters remained unresolved as no parties had come forward to provide assistance.

September 2000: Ahmad Zaki said the Swiss account of a foreign company registered in the British Virgin Islands formed a vital piece of evidence but ACA, did not have the power to get information on the Swiss account. The account contained part of the RM76.4 million which was said to have been taken out of the country to Hong Kong before it went to Japan and then Switzerland.

October 2002: Parliament told probe into Perwaja had been completed.

2003: Investigators from AG's Chambers gather evidence in Japan, Switzerland and Hongkong.

Feb 9, 2004: Chia arrested by ACA.

Feb 10, 2004: Chia charged with embezzlement.

August 2004: Chia alternatively charged with dishonestly disposing of the funds by entering into an agreement with NKK Corporation of Japan and authorising the payment without the approval of the board of directors or tender committee of Perwaja Rolling Mill and Development Sdn Bhd.

May 4, 2007: Prosecution closed its case after calling 29 witnesses.