The Kuala Lumpur High Court has ordered Felda's RM200 million defamation suit against PKR disciplinary committee head Dr Tan Kee Kwong to proceed.

NONE Justice Zabariah Mohd Yusof dismissed a novel preliminary objection by Tan's (right) lawyers who argued that, as Felda is a public body, it cannot sue an individual for defamation on grounds of freedom of speech.

She ruled that Felda is not a public authority.

"Felda has locus standi (legal standing) to file the suit or be sued. Hence the preliminary objection is dismissed," she said today.

Testifying today, former Felda Holdings Bhd managing director Mohd Bakke Salleh described as “false” a Suara Keadilan report last year that the land development authority is ‘bankrupt’ and that there was ‘wastage’ in its purchase of a building in Kuala Lumpur.

Tan, a former land and cooperative development deputy minister, had been quoted as saying the purchase decision had been made by three individuals and had resulted in wastage, resulting in Felda heading towards bankruptcy.

As a result of this Felda, along with with its subsdiary Felda Global Ventures Sdn Bhd, filed a suit against Tan earlier this year following the publication of an article titled “Felda bankrupt' which was published in Suara Keadilan in June 2010.

'Report false'

Bakke, now the Sime Darby Bhd president and chief executive officer, said the report was “false from all aspects” in relation to the purchase of Menara Felda in Platinum Park, Kuala Lumpur.

“First, that it was not decided only by three individuals. There is no element of wastage in the acquisition of Menara Felda... and lastly, Felda is not heading towards bankruptcy,” he said in reply to questions from Firoz Hussein Ahmad Jamaluddin, who represented Felda.

He said then deputy premier Najib Abdul Razak, the late Naza chairperson SM Nasimuddin and he were not the only ones involved in the decision to purchase the building, but that it included Felda’s board of directors.

The building was bought from TTDI Development (Nasimuddin’s company) on Oct 26, 2007, at a price of RM640 million or RM930 per square feet.

Describing the purchase as a good one, Bakke said it was a good real estate investment, being located in the vicinity of the prime Kuala Lumpur City Centre - as prices have since increased.

He also agreed that there were meetings with Najib when he was the DPM and also the minister in charge of Felda.

“Najib was kept informed of the proposal to construct a Felda headquarters and his views were sought. Ultimately, after the Felda board of directors had approved the purchase of Menara Felda from TTDI Development at a specific price, Felda sought the approval of Najib via a letter dated Oct 29, 2007,” Bakke said.

The former MD said the decision to purchase Menara Felda was arrived at after many board meetings, for the board had considered various alternative locations to site the Felda headquarters, such as Jalan Maktab near Jalan Gurney, and also the KL Sentral area.

'KLCC chosen because of high visibility'

Bakke told the court that KLCC area was the most sought after corporate address in Kuala Lumpur as it has high visibility.

“It is a strategic location of high value and is the best zone for a corporate address. In comparison, the Jalan Gurney area was a residential area with government departments, and without corporate entities. The desire to attract high visibility would not be accomplished if Felda built its headquarters in Jalan Gurney,” he said.

NONE The witness agreed that TTDI had shown models of the Menara Felda building to Najib, then Felda chairperson Yusof Nor and two other Felda officers at the deputy prime minister's office in Putrajaya sometime in July 2006.

TTDI then followed it up with a letter of offer dated July 14, 2006, but the Felda management resolved that the offer could not be fulfilled.

However, Bakke agreed that the ultimate decision to buy was made in October 2007.

Earlier, former Felda Holdings deputy MD Kasah Awal testified that Tan had asked him sometime ago whether Felda would build its headquarters on its own land, to which he had replied ‘yes’.

“I told Dr Tan then that there was actually a committee formed and that the then prime minister Pak Lah was supposed to attend the ground-breaking ceremony. Dr Tan asked me how come the location then changed to KLCC, and I told him that the original idea did not materialise as the Group MD had then asked Felda to consider and study an alternate place at KL Sentral,” he said.

'Officers in the dark'

Kasah said he was relating to Tan what was related to him by his “ex-officer”, in that someone from the DPM's office telephoned asking for a meeting on  behalf of Felda on its new headquarters.

“My ex-officer told me several officers were in the dark about the meeting (at the DPM’s office in  Putrajaya), but he was told the meeting was attended by Bakke, Nasimuddin, Yusof and two other staff, including the ex-officer,” he said.

“I actually do not know whether such allegations were true or not,” Kasah added.

The hearing before Justice Zabariah continues tomorrow.