The Attorney General's Chambers has filed a notice of appeal against the acquittal of tycoon Eric Chia on charges of criminal breach of trust.

Head of the prosecution division in the AG's Chambers, Mohd Yusof Zainal Abiden, who also led the prosecution of the case, said the notice was filed yesterday afternoon.

"The decision to appeal was made because we are dissatisfied with the (acquittal) decision which, in our view, was against the weight of evidence," he was quoted as saying by Bernama today.

"We have yet to receive the full grounds of the decision and the reasons of our appeal will be made known once the petition of appeal is filed," he added.

Yesterday the Sessions Court acquitted the former managing director of Perwaja Steel without even calling his defence.

The decision over the criminal breach of trust (CBT) charges involving RM76.4 million came after a hearing that stretched over three years.

Prosecution case crippled

Sessions judge Akhtar Tahir said in his 30-page judgment that the court was deprived of making maximum evaluation in the case because material witnesses - Perwaja lawyer RD Rajasingham and N Otani, director of Japanese steel company NKK Corporation and the signatory of three technical assistance agreements (TAAs) between Perwaja and NKK Corporation - were not called to testify in the trial.

"The prosecution's case has been negated by their own evidence and crippled by the non-calling of essential witnesses," said Akhtar.

"From my observation of the evidence, I noted that none of the prosecution witnesses were familiar with the actual contents of the TAAs. The understanding of the witnesses, prosecution and defence cannot be substituted with that of the actual ones involved in the drafting of the documents," he said.

"As a conclusion I would say ... in this case the court was deprived of making this maximum evaluation as the material witnesses were not even called," said Akhtar.

"I have decided that the prosecution has failed in proving a prima facie case against the accused on both the main and the alternative charge. The accused is therefore acquitted and discharged for both the main and alternative charge," he added

Lawyer Muhammad Shafee Abdullah represented Chia.

Acquittal a major blow

Singapore-born Chia, 74, was the first prominent person charged with corruption after Prime Minister Abdullah Ahmad Badawi replaced Dr Mahathir Mohamad in October 2003, pledging to root out graft in government and business.

Chia's trial opened in August 2004 after a lengthy investigation into the payment of RM 76.4 million from Perwaja Steel to Japan's NKK Corporation through a non-existent company in 1994.

But sessions court judge Akhtar Tahir said on Tuesday there was a "total lack of direction" in the prosecution case as he aquitted Chia.

Opposition leaders have called the acquittal a major blow to Abdullah's anti-corruption drive.

After his acquittal, Chia challenged the prosecution to appeal.

"Go ahead. I am not afraid," he told reporters, describing the investigations and charges against him as "blind men playing cricket".

Filing the appeal on the same day as the judgment "shows that we are not happy," attorney-general Abdul Gani Patail said, as quoted by Bernama.

The appeal was needed "in order to save the badly tarnished face of Prime Minister Abdullah Ahmad Badawi," said Nasharudin Mat Isa, deputy president of the opposition PAS.

Opposition Leader Lim Kit Siang earlier said Chia's acquittal would be seen as a major setback to Abdullah's anti-corruption drive, which "has never really taken off."

The public should be told the causes of Perwaja's massive losses, said Param Cumaraswamy, former president of corruption watchdog Transparency International's Malaysian chapter.

"Where there is massive losses by a privatised corporation, surely the taxpayers need to know the causes and who is responsible for it," he said.

Handpicked by Dr M

Chia was handpicked by Mahathir in 1988 to turn Perwaja around when it ran into financial difficulties six years after it was set up as the cornerstone of Malaysia's industrialisation drive.

He resigned in 1995 and Perwaja was declared insolvent the following year, saddled with debts and losses totalling about RM10 billion.

Chia's arrest capped one of the most drawn-out probes ever conducted by the Anti-Corruption Agency and appeared to reflect Abdullah's pledge to battle corruption, analysts said.

The ACA investigation zeroed in on the payment made by Perwaja through the non-existent Frilsham Enterprises for "consultancy fees" to NKK for a project in Gurun, in Kedah, that eventually went into overseas bank accounts.