SPNB files another suit alleging fraud against ex-CEO, includes developer linked to Daim's son

• It was reported earlier this week that SPNB Aspirasi had filed a RM141 million lawsuit accusing Azizi, property developer Tunas Tunas Manja Development & Construction Sdn Bhd and 10 others, of conspiring to defraud the company over an affordable housing project in Kuantan, Pahang, using a similar modus operandi.

KUALA LUMPUR (Sept 28): SPNB Aspirasi Sdn Bhd, a unit of national housing development company Syarikat Perumahan Negara Bhd (SPNB), has filed another lawsuit alleging fraud against SPNB's former CEO and executive director Datuk Ahmad Azizi Ali — this time involving a service apartment project in Hulu Langat, Selangor.

Also named as defendants in the suit were five others, including Wiradani Development Sdn Bhd — a property developer linked to the son of former finance minister Tun Daim Zainuddin. 

According to court documents sighted by The Edge, SPNB Aspirasi alleged that Azizi — together with Wiradani Development and its three directors, as well as Akitek Akiprima Sdn Bhd — had conspired between 2014 and 2019 to defraud the company in relation to the Hulu Langat project by causing SPNB Aspirasi to enter into a lopsided supplementary agreement that favoured the developer.

The three Wiradani directors named in the suit are Datuk Seri Ung Eng Huat, Datuk Cheah Kah Lip, Datuk Leong Yeng Kit. Cheah is also a director in Akitek Akiprima, whom Wiradani appointed to be the project's architect.

A check with the Companies Commission of Malaysia showed that Wiradani is 66%-owned by Ferntreegully Sdn Bhd, while Ung owns 29%; the remaining 5% is held by Daim's son, Datuk Md Wira Dani Abdul Daim.

It was reported earlier this week that SPNB Aspirasi had filed a RM141 million lawsuit accusing Azizi, property developer Tunas Tunas Manja Development & Construction Sdn Bhd and 10 others, of conspiring to defraud the company over an affordable housing project in Kuantan, Pahang, using a similar modus operandi.

In this second suit filed on Sept 21 — three days earlier than the previous suit — SPNB Aspirasi alleged that Azizi, with the late SPNB chairman Datuk Ahri Hashim, had acted in concert with the Wiradani directors to defraud the company out of the RM28 million it paid Wiradani for the 1.26-acre land on which the service apartment was to be developed.

SPNB Aspirasi is seeking no less than RM134 million in damages from this suit — RM106 million for loss of commercial opportunities and RM28 million as compensation for land costs paid to Wiradani — among other reliefs.

According to SPNB Aspirasi, it had inked a development agreement with Wiradani in October 2014 to develop the service apartment project — comprising 256 apartment units and 20 retail units — atop the 1.26-acre piece of land owned by the property developer.

SPNB Aspirasi claimed that Wiradani then appointed various contractors without its requisite approval, including Akitek Akiprima. Azizi and Ahri knew of the unsanctioned appointments but failed to uphold their duties as directors of the company and failed to uphold SPNB Aspirasi’s interest, it added.

Then in December 2017, a lopsided supplementary development agreement was inked between SPNB Aspirasi (represented by Ahri and Azizi) and Wiradani (represented by Ung and Cheah), which favoured Wiradani and prejudiced SPNB Aspirasi’s interest, the plaintiff claimed, adding neither Ahri nor Azizi had obtained approval of the company's board approval prior to entering the agreement.

In particular, a clause in the supplementary agreement enabled Wiradani to be entitled to terminate the 2014 development agreement in the event of a default by SPNB Aspirasi, and to claim damages equivalent to the entire loss of profits from the project, it said.

Wiradani then issued a false claim certified by Akitek Akiprima in July 2019 for RM2.57 million, SPNB Aspirasi claimed, which led to an event of default being triggered.

A subsequent arbitration initiated to resolve the dispute resulted in SPNB being ordered to pay Wiradani RM31.51 million, including 28.22 million for loss of profits.

SPNB Aspirasi insisted that the agreements are "null and void ab initio (from the beginning) and should be set aside as they are instruments of fraud used by the defendants to defraud SPNB Aspirasi".

It also claimed Ahri and Azizi’s alleged actions showed the pair had breached their fiduciary and statutory duties to the company, and that the duo had, via the supplementary agreement, dishonestly assisted Wiradani in retaining the RM28 million land costs, and in submitting excessive claims of loss of profits when the agreements were terminated.

Likewise in its previous suit, SPNB Aspirasi said the alleged conspiracy and fraud came to light following an internal forensic investigation undertaken by the company at the instruction of SPNB chairman Datuk Husam Musa — who was appointed to the post in March this year.

SPNB is a national housing development company that was set up in 1997 and tasked with developing quality affordable homes for Malaysians.

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