Federal Court rules RM2.7mil VSS payout to eight former S'gor MBI employees valid

PUTRAJAYA: Former staff members of ex-Selangor mentri besar Tan Sri Abdul Khalid Ibrahim can keep the RM2.7mil paid to them seven years ago as compensation in a voluntary separation scheme (VSS), the Federal Court ruled.

A five-member bench chaired by Justice Rohana Yusuf unanimously overturned a Court of Appeal decision that ruled otherwise.

In the decision on Monday (April 19), the panel said that the appellate court had erred when it ruled that the mentri besar, in his capacity as the chairman of MBI, must have the approval of the board of directors to make the VSS payments.

It added that it agreed with the appellants that Khalid was the sole legal entity under MBI.

"Khalid was legally empowered to make the VSS payments without the approval of MBI's board of directors. He is then not fettered and subject to the board's approval," said Justice Rohana, who is the Court of Appeal president

The apex court then ordered for the order of the Court of Appeal to be set aside and for the order by the High Court to be reinstated as well as RM50,000 in costs.

The other judges were Chief Judge of Malaya Justice Azahar Mohamed and Federal Court judges Justices Mohd Zawawi Salleh, Vernon Ong Lam Kiat and Zabariah Mohd Yusof.

In May 2015, MBI had filed the suit against eight former employees to reclaim the RM2.7mil paid to them via a VSS in 2014.

The eight are former MBI chief executive officer Faekah Hussin, former chief operating officer Rohany Talib, and former officers Arfa’eza Abdul Aziz, Mustapha Mohd Talib, Rahimah Kamarudin, Dr Sulaiman Masri, Abdul Halim Mohamed Yusof and Tuan Nazuri Tuan Ismail.

In 2017, the Shah Alam High Court ruled that the compensation paid out to the eight of them was valid.

However, the Court of Appeal reversed the decision, ruling that the decision by the mentri besar in his capacity as the chairman of MBI must be with the approval of the board of directors.

The staff members appealed to the Federal Court and posed four legal questions.

Lawyers New Sin Yew appeared for the appellants while Masturina Mohamad Radzi appeared for the respondent during the proceedings which were conducted via Zoom.