What is the core legal dispute over MBI payments?

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The Federal Court Reserves Decision on Appeal Regarding Unauthorised MBI Payments

The Federal Court has reserved its decision concerning the appeal by former staff members of the ex-Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim, who are being sued by Selangor Mentri Besar Incorporated (MBI) to recover alleged unauthorised payments. The core of the legal dispute revolves around RM1.219 million paid as compensation to former MBI chief executive officer Faekah Hussin and former chief operating officer Rohany Talib, a decision initially upheld by the Shah Alam High Court in 2017 but later reversed by the Court of Appeal.
Court of Appeal Ruling on Board Approval

The Court of Appeal's reversal of the High Court's decision was based on the principle that any decision made by the Mentri Besar, in his capacity as the chairman of MBI, required the explicit approval of the board of directors. MBI initiated the lawsuit in May 2015 to reclaim funds disbursed through a voluntary separation scheme (VSS) in 2014. The Court of Appeal's 2018 order mandated Faekah Hussin and Rohany Talib to return the RM1.219 million in compensation they had received.
Arguments Presented by the Appellants

During the appeal proceedings, legal counsel for the appellants argued that Tan Sri Abdul Khalid Ibrahim possessed the sole and absolute authority to approve payments, including the RM2.7 million disbursed to the seven staff members. It was contended that Faekah Hussin and Rohany Talib were merely acting under Khalid's direct instructions, and therefore, no fault or liability could be attributed to them for the VSS payments. The remaining five appellants were described as innocent recipients of the VSS payments upon their employment termination with MBI.
MBI's Stance on Payment Validity

Representing MBI, counsel submitted that the payments made by the Mentri Besar, purportedly acting as chairman, in the absence of a formal board resolution, were invalid. This argument was further supported by the assertion that the employment contracts between MBI and the appellants did not include any provisions for a voluntary separation scheme. Consequently, MBI argued that the VSS payments lacked contractual basis and were therefore unauthorised.
Status of Other Former Officers

While MBI's lawsuit initially named seven former officers, including Faekah Hussin and Rohany Talib, the Court of Appeal did not issue any orders against the other five individuals. These individuals are Arfa’eza Abdul Aziz, Mustapha Mohd Talib, Rahimah Kamarudin, Abdul Halim Mohamed Yusof, and Tuan Nazuri Tuan Ismail. Despite this, all seven former staff members are pursuing an appeal against the Court of Appeal's decision.

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What is the core legal dispute over MBI payments?

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