Former Perwaja Steel managing director Eric Chia Eng Hock was charged at the Kuala Lumpur Sessions Court today with criminal breach of trust amounting to RM76.4 million. The hearing will be held in August.

The 71-year-old business tycoon is alleged to have dishonestly authorised the payment of the amount from Perwaja to Japanese steel company NKK Corporation through a non-existent company, Frilsham Enterprises Inc, in Hong Kong on Feb 18, 1994.

He was charged under Section 409 of the Penal Code which carries a maximum sentence of 20 years, whipping and fine.

Chia pleaded not guilty. Judge Akhtar Tahir then fixed the trial date, covering all of August, and set bail at RM2 million.

Chia posted bail using property - valued at RM2.6 million by the government in 2000 - as collateral. He also surrendered both his restricted and international passports to the court as a condition of bail.

The prosecution team, led by Attorney-General Abdul Gani Patail, includes public prosecutors Yusof Zainal Abidin and Nordin Hassan.

Chia's defence team is led by Muhammad Shafee Abdullah and co-counsel Azhar Azizan Harun. His other lawyers include Jegadeesan Thavasu, SP Pathi and Jeffrey John.

Among those present in the courtroom were ACA director-general Zulkipli Mat Nor.

'Surprised' by ACA

Talking to reporters outside the court later, Chia said he was prepared to defend his case, but declined to comment on the facts of the case.

He was arrested yesterday, but due to apparent chest problems, spent last night at the Putrajaya Hospital. Wheeled into the courtroom this morning, he appeared to be in good spirits.

The tycoon said he was surprised when Anti-Corruption Agency officers stopped him while he was buying food at the Sungai Buloh interchange rest area.

"They stopped me on the roadside. They should have gone to the house, they know where I stay," he said.

Asked if he felt he had been appropriately treated - given that he had left a cushy position in UMW to take charge of Perwaja - Chia said: "I leave it to the people to judge, and I leave it to God to judge. I was asked to do a national service, because the country needed me.

"I was reminded that I came from Singapore with only five dollars in my pocket. And to God and country I must repay my gratitude. So I went to Perwaja to repay my gratitude."

In less than fluent English, he claimed that he took up the Perwaja post on condition that he received no salary.

"If I took a salary, that would not be 'bayar budi' (repaying gratitude). Perwaja was bankrupt. Got nothing. If I wanted to cheat, I can cheat in UMW...plenty of money. What for I come to a bankrupt company to cheat?

"And the papers say (that given) the kind of money in Perwaja, nobody needed a salary to work...it's up to you, write what you want," said Chia, laughing.

Problems in Perwaja

Perwaja - a plant that processed iron ore to pure iron - was to be the cornerstone of the industrialisation drive that former prime minister Mahathir Mohamad began in the early 1980s.

But the project soon faced serious problems resulting in Japanese shareholder Nippon Steel abandoning the project.

In 1988, Chia was tapped by Mahathir to save the company. He was initially given six months to find out what went wrong with the ex-premier's pet project.

Chia stayed with the company for seven years. During his tenure, he put in place a 10-year plan which saw the setting up of a new company called Perwaja Steel.

However, the multi-billion ringgit losses continued. Chia eventually resigned from Perwaja in 1995, a year before Anwar Ibrahim - then deputy prime minister - disclosed to Parliament that Perwaja's RM815 million interest payments on a yen loan were bleeding the company.

His arrest came nine years after the ACA launched a probe in October 1996, and 15 months after the government first announced the completion of investigations.

The investigation was initiated after it was revealed that Perwaja suffered losses totaling RM2.98 billion as of Dec 31, 1995, including bank loans amounting to about RM7 billion.