Rafizi misses Sapura apology deadline, defamation suit looms

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A defamation suit is looming over PKR vice-president Rafizi Ramli amid his political spat with former prime minister Najib Razak over the financial problems of Sapura Energy Berhad.

Rafizi had been issued a letter of demand for an apology and retraction of three articles containing allegedly libellous statements about Sapura group president and chief executive officer Shahril Shamsuddin.

The deadline for Rafizi to comply had expired last Tuesday and a defamation suit is expected to be filed in court by Shahril’s lawyers.

Shahril took offence to a claim by Rafizi that Sapura Energy’s majority shareholders, led by Shahril, had taken out a total of RM1.33 billion, made up of RM1.1 billion in salaries and the rest in other payments and dividends.

Rafizi had claimed that this was triple the sum of RM440 million which the company paid out to the remaining shareholders in dividends.

However, Shahril’s lawyers denied that he received remunerations totalling RM1.1 billion. They said in the letter of demand it was publicly known that Shahril’s total remuneration between 2013 and 2021 was RM486.25 million and that he was remunerated after having achieved and fulfilled all the specific key performance indicators.

According to the letter, the remuneration paid to all Sapura Energy’s executive directors, including Shahril, was based on operational profits which reflect the actual performance of management.

A further check of the annual reports for the same financial years showed that Sapura Energy’s profits after tax and minority interest, excluding impairment, totalled RM4.74 billion against RM66.27 billion in revenue.

Shahril had also agreed to have loan covenants attached to his shareholding in Sapura Energy and himself personally in respect of about RM18 billion in facilities granted to the company.

In addition, Shahril had a hand in injecting RM532 million into Sapura Energy during a 2019 rights issue.

His conduct in agreeing to the covenants demonstrated his commitment to the company, “and not as an individual who is enriching himself at the expense of Sapura (Energy) as the articles suggest,” the lawyers said.

Shahril also objected to Rafizi’s claim that his salary and bonus entitlements were tied to Sapura Energy’s share price, which purportedly led to Sapura Energy scrambling to bid for projects worldwide, without regard to whether it could carry them out, and incurring substantial debts.

“The share price did not form part of the key performance indicators affecting the remuneration of the executive directors,” the letter said.

The letter said Sapura Energy’s executive directors were paid based on the prior year’s performance and by a long-term incentive plan which also applied to about 100 other high performers in the company.

The lawyers said compensation matters went through a rigorous internal process before approval by the board of directors.

“In essence, our client was remunerated after having achieved and fulfilled all the specific key performance indicators,” the lawyers pointed out. – FMT