Selangor water supplier Syabas cannot pay its water suppliers and has no funds to replace pipes, its CEO admitted in court documents released today, just after it was revealed last month that its executive chairman Tan Sri Rozali Ismail was paid RM33.4 million in remuneration last year.
The Court of Appeal judgment on Tony Pua's appeal against the High Court ruling on Syabas' defamation suit against the DAP Petaling Jaya Utara MP, which was released today, also showed Syabas CEO Datuk Ruslan Hassan as conceding that Putrajaya had never supported the tariff hike proposed by the water concessionaire.
“Syabas is currently facing suits by its water suppliers for non-payment of invoices,” the judgment read.
“Syabas has obtained a loan from the federal government to pay the water treatment operators because Syabas are in financial difficulties...the federal government has never agreed with the tariff increase proposed by Syabas,” it added.
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Despite Syabas' financial troubles, Rozali received a whopping RM33.4 million last year, including a RM20 million gratuity, a remuneration package that was four times larger than the RM8.35 million he received in 2011.
Rozali is also the executive chairman of Puncak Niaga Holdings Berhad (PNHB). Syabas is a subsidiary of PNHB.
Last March, Pua won the appeal against the High Court ruling that found his statements against Syabas in a November 16, 2010 article defamatory.
Court of Appeal judges Justice Datuk Zahara Ibrahim, Datuk Ananthan Kasinather and Datuk Mahamad Ariff Bin Md Yusof were unanimous in their decision in overturning the High Court ruling.
In their judgment released today, they noted that Pua's remarks against Syabas were justified, based on Ruslan's evidence.
“In any event, since the only defamatory imputations which we are prepared to ascribe to the impugned words relate to the respondent's financial status, the evidence of PW 4 clearly demonstrates that the contents of the report were sufficiently true to allow the defence pursuant to section 8 of the Defamation Act 1957 to be successful in this case,” said the judgment, referring to the evidence by Ruslan.
Selangor Mentri Besar Tan Sri Khalid Ibrahim was reported by English daily The Star last July as saying that sacking Rozali from Syabas would generate savings of at least RM5.1 million a year.
According to Forbes, Rozali was the 31st richest man in Malaysia in 2009 with a net worth of US$130 million (RM427 million).
In the suit filed in 2011, Syabas claimed that Pua's statements in a November 16, 2010 article titled “Tony Pua: Selangor government must have water rights to prevent rate hike”, published by Nanyang Siang Pau's Metro edition, were defamatory.
In its statement of claim, Syabas stated that the article gave the impression that it was incompetent in managing water supply rights, given its failure to replace water pipes and to repay debts.
Pua was quoted as saying in that article that the Selangor state government should take over water supply management if the water concessionaires were unable to repay their debts.
The judgment today also noted that Ruslan had said that Syabas had no back-up plans to sustain operations in the event there is a dispute on the proposed tariff hike.
“The proposed tariff hike is the subject of an ongoing litigation initiated by Syabas,” said the judgment.
“Syabas has no funds to carry out the Capex programmes such as replacement of pipes and other water infrastructure in the concession area without having to go to the banks,” it added.
Putrajaya and Selangor have been wrangling over control of the state's water supply since Pakatan Rakyat (PR) took over the country's wealthiest state in Election 2008, with the matter turning into an election issue during the May 5 general polls this year.
Khalid, however, said last June that Prime Minister Datuk Seri Najib Razak had taken a “positive step” in directing the minister of energy, green technology and water to engage Selangor on its bid to take over water utilities in the state.
Selangor moved to buy out the state’s water utility from Syabas and other concessionaires in July last year after contending that the firms had failed to meet mandated reductions in non-revenue water.
The state government is now offering RM9 billion for all of the existing water concessionaires’ assets and liabilities, including their bonds.
