The Kuantan High Court will next Friday decide on an application filed by Umno Pahang to set aside an earlier judgment ordering it to pay compensation to a company over a controversial logging concession in the state.

On July 13, the court ordered the party to pay RM70,000 to Seruan Gemilang Makmur (SGM) which had failed to renew its logging licence, as promised by Umno Pahang.

The company, which accused Umno Pahang of breaching their contract, had claimed RM31 million in damages. It has also filed an appeal against the relatively low damage awarded.

Four days after the High Court judgment, Umno Pahang secretary Ahmad Tajudin Sulaiman filed an affidavit claiming that the ruling party was the victim in the botched deal and sought an unspecified amount of counter-compensation.

When contacted this morning, SGM director Syed Ali Badarudin said senior assistant registrar Azman Mustapha fixed next week for the decision after counsels for both parties finished their submissions yesterday.

SGM is represented by Bong & Co while Umno Pahang is represented by Jacob Goldie & Toh.

The logging scam highlighted by malaysiakini centered around a 10,000-acre plot of land - about 40sq km in size - near Pekan which was awarded to Umno Pahang in 1998.

The land was given to the party by the state government helmed by then Pahang Menteri Besar and Umno state chief Khalil Yaacob ostensibly for oil palm plantation.

To make the deal aboveboard, the party was required to pay a RM4.8 million land premium in order for them to start logging activities but the payment has yet to be settled

'Hidden agreement'

Despite that the land is still technically owned by the state government, Umno Pahang had gone ahead to clear the plot.

In 2000, Umno Pahang conferred SGM with the exclusive right to fell, extract and sell the logs in the area. In return, the company paid the party a mere RM50,000 for the deal which is believed to be worth millions.

Documents in malaysiakini's possession also revealed that the deal was supported by several high-ranking Umno Pahang officials.

Industry experts were also puzzled by the extremely low transfer rate and questioned if there was any 'hidden agreement' between the two parties.

The concession was also believed to be the tip of the iceberg of lucrative logging concessions granted by the state to Umno Pahang as a means to raise funds for the ruling party.

However, the Umno Pahang-SGM relationship soured last June when the state forestry department refused to renew the company's logging licence.

It is believed that current Pahang Menteri Besar Adnan Yaakob - who took over from Khalil in 1999 - had refused to have anything to do with the deal, forcing SGM to seek legal redress.

Observers noted that Umno Pahang could have easily put a lid on the matter by paying the stipulated sum, but the party has instead chosen to continue battling it out in court.

Khalil, who is now Umno secretary-general and information minister, had been previously accused of alleged discrepancies in the awards of timber concessions.

Police report

Commenting on the issue last week, Adnan claimed he was in the dark over the deal since the land was approved by his predecessor but added that SGM had dealt with "one or two individuals" who allegedly cheated the company through misrepresentation and forgery.

On Saturday, another SGM director Sheikh Mohd Zurid Tok Muda Sheikh Hassan - a former chief of an Umno branch in Pekan - lodged a police report against Adnan over his denial of Umno Pahang's involvement.

The report said Adnan's remark was in contempt of the High Court's ruling that the party should pay the RM70,000 compensation.

Prime Minister Dr Mahathir Mohamad has also promised to look into the matter as political parties are not allowed to own any state land.