Court orders man to pay RM1.5mil over ‘forced’ contracts

“Such actions also would have a crippling effect on the ability of meritorious companies dealing with the government of Malaysia.”

(FMT) – The High Court here has ruled that the shareholders of three companies which were given contracts to develop systems to vet entries of foreigners into Malaysia underwent economic duress when they were forced to enter into several agreements with a man said to be a proxy of a political leader in the pre-2018 Barisan Nasional administration.

Judicial commissioner Ong Chee Kwan said he found Mohamad Nizam Mohamad Jakel had threatened to take away their contracts running into millions of ringgit unless they transferred shares to the company of his wife, Norhana Sharkhan.

Ong, who delivered the 115-page judgment last week, said he found Nizam’s conduct was “so intolerable” that he had to award exemplary damages amounting to RM500,000 each to the three shareholders.

“I do agree that this is indeed a proper case where exemplary damages ought to be imposed. Nizam’s main objective was to extract money to be derived by the plaintiffs from the scheme,” he said.

The judge said Nizam contributed nothing to the systems but wanted the benefits from the efforts put in by the plaintiffs.

“In carrying out his objective, Nizam blatantly blackmailed the companies into giving him exorbitant amounts and substantial control over the companies,” he said.

“His actions had inflicted fear, distress and hopelessness upon Aminul Islam Abdul Nor (also known as Amin) and the plaintiffs.

“Such actions also would have a crippling effect on the ability of meritorious companies dealing with the government of Malaysia.”

If exemplary damages were not awarded, Ong said, Nizam would come out of this episode no worse off as he never had the shares of the companies to begin with.

He ordered the shares to be transferred back to the companies as soon as possible and also declared the agreements void.

He said there was economic duress and illegality due to influence peddling, and it would be unjust enrichment should Nizam or Norhana be allowed to hold the shares.

The court also ordered Nizam to pay RM360,000 in costs to the plaintiffs, represented by Tommy Thomas, K Shanmuga, V. Jeya Kumar and Jonas Lee Fook Khong.

JR Joint Resources Holdings Sdn Bhd, Mohd Zaki Jaafar and SH Yahya SH Mohamed filed separate suits against Norhana.

It was accepted that Norhana was merely the agent of Nizam.

JR Joint Resources, Zaki and SH Yahya are shareholders of the three corporate entities, Bestinet Sdn Bhd, Tass Tech Sdn Bhd and Synerflux Sdn Bhd.

By way of several agreements, Norhana received 49% of the share capital of Bestinet, and 70% in both Tass Tech and Synerflux.

The companies were focused on developing and implementing proprietary software solutions or platforms designed to assist the government through the home ministry in the area of recruitment of migrant foreign workers by Malaysian employers, and to screen passengers entering or exiting the country.

While the plaintiffs are distinct and separate entities, all of them are associated with Amin, the prime mover of the various platforms and the controlling mind behind these entities.

The plaintiffs claim that the defendant had, by illegitimate means, exerted undue pressure and had coerced the transfer of their respective shares in the companies that developed the software, to Norhana.

This was done by threatening to interfere with the plaintiffs’ negotiations and contracts with the government using the defendant’s close connection and influence with “powerful persons” within the government.

The plaintiffs, who filed their suits in late 2018, said the agreements signed with the defendant came about due to economic duress, coercion, illegality, failure of consideration, breach of condition and unjust enrichment.

They also sought declarations that the agreements are legally bad and must be struck down and the shares must be returned, all of which were allowed by the court.

Lawyers P Porres Royan, C Vijaya Kumar, S Shaarvin and Roobini Stephanie Sittampalam appeared for Norhana.