‘Win-win formula’ for MIED legal row

KUALA LUMPUR: Maju Institute of Educational Development (MIED) chairman S Samy Vellu, along with nine members of MIED's board of trustees are working out a "win-win formula" to settle the RM100 million suit initiated by former MIC Youth chief SA Vigneswaran on behalf of MIED.FMT learnt that several trustees and their lawyers initiated the move by looking into the possiblity of conceeding to several terms sought by Vigneswaran in the suit, including full disclosure of MIED's accounts over the construction of the AIMST Medical Colleage in Kedah.

It is said that construction cost had ballooned from the initial RM300 million to RM500 million.A source close to the trustees said the settlement was part of a move to put a lid on the issue and to find ways to strengthen MIC's education arm."This matter should not be prolonged further and both parties in principle have agreed to find a formula to solve the MIED issue once and for all," said the source.He denied that the move was to avoid any further embarassment to Samy Vellu after he was grilled by defence counsels in the trial of former MIED chief executive officer S Chitrakala.

The main intention of Vigneswaran's suit was to disclose the alleged mismanagement of MIED's funds and we are looking into the possibility of allowing an independent forensic accountant to probe the matter. In return, the law suit will be withdrawn," he added.Contacted later, Vigneswaran confirmed that he was approached on the matter but declined to elaborate beyond saying that there was nothing constructive at the moment.


In a related development, his counsel A Vasanthi told FMT that MIED's suit was a derivative action pursuant to Section 181A of the Companies Act 1965.She pointed out that such a suit could only be settled, withdrawn or compromised with the leave of court."We have to file an application in court seeking an order to withdraw the suit as stated in Section 181C of the Act," explained Vasanthi.

Appeal pending

On June 14 last year, the Kuala Lumpur High Court had granted leave to Vigneswaran to name the institute as the plaintiff in a suit against its trustees.After obtaining the leave under Section 181A of the Act, the former MIC Youth chief initiated a RM100 million suit against MIED's chairman Samy Vellu and its nine trustees for alleged mismanagement.Other than Samy Vellu, he named M Mahalingam, T Marimuthu, SK Ampikaipakam, G Palanivel, K S Nijhar, Kumaran, G Vadiveloo and a firm, Kumpulan Naga, as the defendants.

In the suit, MIED claimed that the defendants had breached their fiduciary and statutory duties, failed to discharge responsibilities as trustees and auditors, which caused MIED to suffer huge losses.On April 5, the Federal Court ruled that the defendants could appeal against a High Court's decision in granting the leave. No date was set by the Apex Court to hear the appeal.In another development, the High Court had set June 20 to hear an application by former MIC deputy president S Subramaniam, Vigneswaran and Kedah MIC deputy chairman S Ganesan to prevent Samy Vellu from admitting 10 new members into MIED.


Source : http://www.freemalaysiatoday.com/2011/05/12/win-win-formula-for-mied-legal-row/