Boutique investment company ECM Libra Bhd has threatened to sue PAS vice-president Husam Musa and the party's official organ Harakahdaily.com for defamation over a report that questioned company director Khairy Jamaluddin's acquisition of RM9.2 million worth of shares.

In a letter of demand sent through law firm Bodipalar Ponnudural Nathan, the company claimed it had been "seriously defamed" by Husam's statement, which was posted on harakahdaily on Dec 29, 2005.

Husam's statement was reported in a Malay-language article entitled 'Bagaimana Khairy membeli saham ECM Libra' (How did Khairy purchase ECM Libra shares?).

In it, Husam also urged the government to explain Khairy's multi-million ringgit investment. He called for transparency because ECM Libra had allegedly played a key role in the sale of the government's stake in private healthcare provider Pantai Holdings to Singapore-based firm Parkway Holdings.

"As the son-in-law of the prime minister, he (Khairy) must explain how he made the purchase: whether he took a bank loan, or (it was paid) from his personal wealth or with commissions - if any - he had received from ECM Libra for his role in Parkway's purchase of stake in Pantai," he was quoted as saying then.

The four-page lawyer's letter dated Jan 8 said the allegations in the article with reference to ECM Libra are unfounded, untrue and defamatory in nature, as well as "constitute a grave libel".

"The content, gravity, venom and scale of your libel has gravely injured ECM Libra's commercial reputation. The said libel was calculated to disparage ECM Libra's reputation in the industry and to bring upon ECM Libra public hatred, ridicule, contempt and odium," it stated.

The letter said Husam's statement had meant that ECM Libra was involved in the sale of shares of Pantai to Parkway, and that the acquisition of the three percent shares in ECM Libra by Khairy was with the purpose of facilitating the approval of the Pantai sale.

It further claimed that Husam's statement, by way of innuendo, was "meant and understood to mean that Khairy received his shares in ECM Libra in consideration of Khairy procuring the approval of Pantai Sale from the Finance Ministry".

This implied irregularities in the Pantai sale and attributed those irregularities to ECM Libra, the letter claimed.

Since the article was published on the Internet version of PAS' official organ, a large number of Internet users could have read the concerned article, said the letter, a copy of which was made available to malaysiakini.

"In these circumstances, ECM Libra is left with no choice but to issue defamation proceedings against you, in order to vindicate its commercial reputation," said the letter.

Four demands were listed in order to "mitigate the continuing damage" to the company's reputation: to make a joint statement in open court on agreed terms; to publish a retraction of the statement in harakahdaily and other major dailies; to propose a quantum of damages for compensation; and to refrain from making similar statement in future.

Husam will have three days to respond from the date of the receipt of the letter.

Harakahdaily head Zulkifli Sulong, contacted today, confirmed that he has also received a similar letter from ECM Libra.

'Demands not relevant'

Husam, when contacted this afternoon, said ECM Libra's action would not stop him from revealing all recent transactions which affect the national interest. He, however, did not specify whether the "transactions" were related to ECM Libra.

"I will release a more complete and detailed statement (on the new revelations). I wish to protect the national interest from concerned quarters that try to exploit (the situation) to gain profit by selling the country's assets to foreign parties," he told malaysiakini.

He reiterated that the sale of 31 percent of shares of Pantai to the Singaporean firm had breached the 'merger and acquisition guidelines' which stipulate that the foreign stake should not exceed 15 percent.

Husam said he would reply to ECM Libra's letter but said the four demands "are not relevant - my main focus in on Khairy's involvement".

On Dec 28, Khairy - who is also the deputy Umno Youth chief - was reported to have acquired a three percent stake valued at RM9.2 million in ECM Libra, of which he has been a director since July 2004. The company also has a number of politically well-connected individuals on its payroll.

Exchanges filings showed that Khairy, 30, bought 13 million shares at 71 cents per share in three separate transactions from company chairperson Kalimullah Masheerul Hassan, chief executive officer Lim Kian Onn and chief operating officer Chua Ming Huat.

Opposition leaders like DAP's Lim Kit Siang, Parti Keadilan Rakyat's Mohd Ezam Mohd Nor and Husam respectively responded to the news by telling Khairy to explain his "unusual" wealth.

However, Khairy has yet to respond on the matter.