Law suit: Bid by Taib to strike out points

By Malaysiakini

Malaysiakini

2007-11-19 | Sarawak Chief Minister Abdul Taib Mahmud has filed an application to strike out several paragraphs from Malaysiakini's statement of defence as 'immaterial' to his defamation suit, including details of his family's business.

The affidavit filed by his lawyer Yee Mei Ken of Shearn Delamore argued that the facts stated "went far and beyond the ambit of this case" and must be struck out.

Taib had filed the defamation suit in the Kuala Lumpur High Court on May 16 over a series of articles on his alleged involvement in a timber kickbacks scandal.

He named Malaysiakini and the independent news website's editor-in-chief Steven Gan as parties to the suit.

His objections are to these sections of the statement of defence:

- Malaysiakini's claim that Taib had abused the judicial process by failing to initiate legal proceedings against original source of timber kickback allegations such as Japan Times and Kyodo News and using the suit to deny Sarawak State Assembly members the opportunity to debate the issue;

- Details of the alleged involvement of his family in the conglomerate Cahaya Mata Sarawak Bhd (see chart);

- Malaysiakini's 'fair comment' pleadings; and

- The link made between his two brothers with Dewan Niaga (Sarawak) Sdn Bhd, the sole agent for timber shipments out of the state.

Malaysiakini has instructed its team of lawyers from Azzat and Izzat to vigorously challenge Taib's application.

"We believe the application to remove parts of our defence is vexatious and without merit," said Gan.

"The paragraphs that Taib seeks to strike out are crucial to our defence."

Following Malaysiakini's opposition to the striking-out application, the hearing of the matter has been slotted in Kuala Lumpur High Court for Wednesday.

Background to the suit

Taib has also filed a suit in the Kuching High Court against two opposition leaders - PKR state chief Wan Zainal Wan Sanusi and party's Stampin branch chief See Chee How - for distributing leaflets containing articles taken from Malaysiakini and Japan Times.

Malaysiakini reported the matter a week after the Japan Times article was published on March 29, 2007, and followed this up with a special issue entitled, RM32 mil kickbacks - tip of the iceberg.

According to Japan Times, a multi-million ringgit 'bribe' was allegedly paid over a period of seven years to a Hong Kong company, Regent Star, said to be linked to Taib and his family.

The money was said to have come from a Japanese cartel consisting of nine companies which has been buying timber from Sarawak.

It allegedly paid Regent Star 1.1 billion yen (RM32 million) for services rendered in this transaction. This was disguised as business expenses, and was therefore not taxed.

However, the Japanese tax authorities discovered that the payments were "illegitimate expenses" as the Hong Kong agency - believed to be a paper company - did very little "substantive work" to justify the payments.

The Tokyo Regional Taxation Bureau has instead classified the payment as a "rebate", which is taxable.

The newspaper reported that the shipping firms were likely to be slapped with well over 400 million yen (RM11.6 million) in back taxes along with heavy penalties for "hiding" the funds from the tax authorities.

The companies are suspected of having made payments to the Hong Kong agent for 26 years, and thus the total income concealed could be several times the figure cited by sources.

However, the Hong Kong Registrar of Companies stated in a notice that Regent Star has applied to be deregistered.

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