Bumi firm blames Bank Negara for arbitration delay
Bumiputera firm H&I Niaga Sdn Bhd has denied pulling out of the arbitration with Bank Negara Malaysia, claiming it was the central bank that deliberately delayed the process.
Bumiputera firm H&I Niaga Sdn Bhd has denied pulling out of arbitration with Bank Negara Malaysia, claiming it was the central bank that deliberately delayed the process.
At a press conference today with the firm’s former directors, DAP national publicity secretary Tony Pua said Bank Negara’s statement yesterday blaming the firm for scuttling the arbitration was “mischievous”.
Instead, he said, it was Bank Negara that had “sought to delay it as long as it could in order to leave H&I with no more time to settle before it got wound up”.
For example, said Pua, Bank Negara only held its first preliminary meeting with H&I Niaga on Jan 13, four months after it was first served the notice of arbitration on Sept 11 last year.
In addition, as late as March 28, Bank Negara lawyers demanded “security for costs” amounting to RM2.5 million from the firm, despite knowing that it was already debt-ridden, said Pua.
The move, he said, derailed the process as Bank Negara knew full well the firm could not pay the sum.
“And on April 5, Bank Negara attempted again to derail the arbitration process by putting into it into abeyance via a wrongfully obtained winding up order against H&I.
“The lawyers for H&I managed to throw out the winding-up order, and this delayed the process further,” said Pua.
“They have tried every trick in the book to delay the process,” he added.
Last week, H&I Niaga, which had been contracted to build the Financial Services Resource Centre, accused Bank Negara of deliberately driving the Class A bumiputera firm into bankruptcy by withholding payment for the construction works.
The central bank responded by blaming the firm for pulling out of the arbitration process just as it had begun.
The firm eventually withdrew from the arbitration at the first hearing on June 14.
"No way we could survive the arbitration process with sub-contractors knocking on our door every day," said H&I Niaga's former managing director Ismail Mohd Hisham.
"If we lost the arbitration, we would have to bear the legal fees," Ismail said.
Company wound up
Following the futile arbitration, the company filed a suit against Bank Negara in the Kuala Lumpur High Court on June 20, claiming RM81.9 million in outstanding payments and RM50 million for financial and reputational damage.
However, before the court case could begin, the High Court in KL yesterday granted an application by Affin Bank to wind up H&I Niaga Sdn Bhd over an outstanding amount of RM12.8 million.
This forced the suit against Bank Negara, which was fixed for case management yesterday, to be put on hold.
"It will now be up to receiver or liquidator to decide whether to continue with the RM131.9 million suit against Bank Negara," said Pua.
He noted that the winding-up exercise has also affected the company's sub-contractors, as its retention monies were now withheld.
"In total, H&I still has an outstanding amount of RM23.1 million still payable to its 123 subcontractors and suppliers, which is now in doubt," Pua added.
