Fri, Jan 1, 2010

KOTA BAHARU: The Kelantan government will appeal against Wednesday’s High Court decision ordering it to pay RM800 million in damages to logging company Timbermine Sdn Bhd for violating an agreement made in 1964.

State Economic Planning, Finance and Welfare Committee chairman Datuk Husam Musa told a news conference today the appeal would be filed through a federal counsel soon.

Explaining the issue to FMT, Husam noted that the case had a long history and involved two government administrations.

He said Timbermine’s ties with the state dated back to 20 July 1964, when the state government gave the company logging concessions to develop land in Ulu Kelantan.

” The area had much communist activities,” he said. “It is my understanding that the company was prepared to log despite the difficulties. On 18 March 1975, while Kelantan was under Barisan Nasional rule, the state terminated the agreement.”

Within a month of the termination, Timbermine sent the government a lawyer’s letter challenging the state’s decision.

Husam said the state government then set up a negotiation committee headed by Minister of Information Tengku Ahmad Rithaudeen.

He said negotiations were held on 12 July 1975 and Timbermine agreed to a RM3.5 million compensation settlement.

Following this, an official letter signed by the Menteri Besar was issued to the company.

Husam pointed out that between 1982 and 1989 Timbermine dealt with the BN govt.

“But the company once again sent in their demands the moment the state administration changed hands. The new government at that point felt that the issue should have been resolved by the previous government,” he said.

Eventually, in 2004, the company filed a summons in court.