Penang Chief Minister Lim Guan Eng and former state Umno youth chief Shaik Hussein Mydin today settled  a defamation suit filed by the  former in chambers today.

Lim's lawyer Simon Murali said that Shaik Hussein had unconditionally retracted his defamatory statement that Lim was corrupt which he uttered during a press conference on Oct 5, 2012.

"Both parties have settled the case and will bear their own costs," Murali told reporters outside the court house today.

Lim revealed that Shaik Hussein had apologised to him  before High Court judge Nordin Hassan.

"The apology together with the unconditional retraction of the defamatory statement are important so that I can clear my name and that of the state government against any accusation over my intergrity," Lim said.

"This is more important than the costs," he added.

"As chief minister, I want to be an example not only to my comrades at work but also to all Penangites," Lim stressed.

Lim explained that he filed the defamation suit as he could not allow Shaik Hussein to allege that he had received kickbacks from a dental hospital for a land deal in Penang.

"I hope there will be no more accusations against us that we receive bribes like our opponents. We are not like our opponents," Lim said.

Lim filed the suit against Shaik Hussein in 2013 over the latter saying at a press conference that the Penang chief minister had received bribes for a transaction of land on the island.

'Settlement is fair'

Asked if he had apologised to Lim in chambers, Shaik Hussein said  he had retracted the statement and agreed not to repeat it.

He also said Lim's offer for him to settle the case out of court was fair.

He added that an earlier offer - which he preferred to challenge - demanded him to publish an apology and retraction  in the media and to pay costs to Lim.

"Now he said he wants to settle the matter with different conditions, so I agreed and do not want to pursue the case anymore," he told reporters.

I apologised in chambers? That is not part of the settlement. Of course, I  shook hands with him but I did not apologise," he added.

"Lim was only referring to the two sentences, so he agrees to the rest of the statement I made during the 40-minute press conference?" Shaik Hussein asked.

"Of course, one can say anything outside chambers but for me, the settlement is fair to him and fair to me," Shaik Hussein admitted.