KOTA KINABALU: Warisan Harta Sabah Sdn Bhd made a profit of no less than RM122 million in a composite share-swap transaction in 1997 with Suniwang Holdings Sdn Bhd, involving the MISC, NBT and Sugar Bun shares.

This was stated by former Chief Minister Datuk Yong Teck Lee to his leading counsel Simon Shim at the hearing of a libel suit brought by Yong against PBS Tanjung Aru MP Dr Yee Moh Chai at the High Court Thursday.

"And even after consideration of the provision against the fall in the share price of NBT, the company was able to make a profit of about RM50 million which enabled the company for the first time in its history to declare dividend in the region of RM7 million to shareholders," he said.

Shim said the public was misled by Yee who stated that the North Borneo Timber Sdn Bhd (NBT) shares acquisition was one single outright acquisition that had caused Warisan Harta Sabah Sdn Bhd to suffer heavy losses.

He added it was deliberately created by Yee and aggravated by a string of statements he subsequently issued.

This had prompted many criticisms and attacks from the opposition as well as some Barisan Nasional leaders, he told Justice Sulong Haji Matjeraie.

"The defendant (Yee) knew full well that it was a composite transaction yet he chose to ignore the other twoe components of the transaction and attacked on the NBT shares only," he said.

At the same time, he said the plaintiff would also present evidence that the acquisition price of NBT shares was actually lower than the price approved by the Foreign Investment Committee and its Securities Commission in relation to the said shares three months before the acquisition.

"Your Lordship will also hear evidence that the defendant has ill feelings, personal spite and a vendetta towards the plaintiff, which no doubt well explain why the attacks were so malicious and persistent," he said.

Shim said Yee was simply indifferent to the true or falsity of the matter and his choice of words and the change of the figures to a higher number each time he made the statement "clearly shows that he was sensationalising the matter".

The plaintiff's witnesses would also demonstrate that the transaction involved the disposal of MISC shares by Warisan Harta to Suniwang at 10 per cent above the market price and the acquisition of NBT shares by Warisan Harta from Suniwang at 30 per cent below market price and Sugar Bun at market price.

"The difference of RM50 million would be settled in cash by Suniwang to Warisan Harta and that Warisan Harta need not come out with cash for the acquisition of the NBT and Sugar Bun shares.

"In addition, there were various safeguards in favour of Warisan Harta in that in the event of a drop in the share price of NBT and Sugar Bun. Suniwang was obliged to make good the difference and there was personal guarantee to that effect," he said.

However, if there was a drop in the share price of MISC shares, there was no recourse to Warisan Harta and this is commonly known as composite shares swap.

Shim also stressed that this was an action for libel and that the Warisan Harta transaction "though has its merit is not on trial"

"Therefore, evidence on the merits of the transaction should be rejected and if allowed would contribute to the awards of the damages and costs if Your Lordship later finds that the same were indeed defamatory of the Plaintiff," he said.