Bank Islam began the offer for an out of court settlement

KUALA LUMPUR, 11 Aug: Bank Islam reportedly began the offer so that the debt involving the Chief Minister, Tan Sri Abdul Khalid Ibrahim, with the bank would be settled out of court as the first negotiations were not fruitful.

The former Bank Islam Chief Economist, Azrul Azwar Ahmad Tajudin, said that he was directly involved in the settlement talks after being ordered by his former employer in 2008, as soon as Pakatan Rakyat (PR) won in Selangor.

He said that because negotiations were not successful, the case was taken up to the High Court and the Federal Court to be tried.


“After contacting the Chief Minister, he came to the Bank Islam headquarters in Bukit Damansara for a series of discussions and negotiations, but Tan Sri Abdul Khalid did not agree with the terms and conditions set out at the time.

“That is why it was taken up to the High Court and Federal Court after the first negotiations to reach a deal had failed.

“Until the beginning of this year, the case was no longer referred to in court as the two parties agreed to settle it out of court,” said Azrul who is currently serving as the Selangor Chief Minister’s Special Economic Tasks Officer.

He was speaking at the Selangor Crisis Forum: Khalid Ibrahim betrays Pakatan? at the Kuala Lumpur and Selangor Chinese Assembly Hall recently.

Azrul said that after the case was taken to court several times, finally Bank Islam agreed for the case to be resolved out of court through a deferred payment sale (Al-Bai Bithaman Ajil or BBA) which was revived by an Islamic banking institute from the Middle East.

He said that the method is regarded as controversial in terms of Islamic banking contracts and that it is received in several countries in Asia; Malaysia, Singapore, Brunei and Indonesia.


“The Islamic banking company met with the parties involved and offered a work paper where they will pay the amount owed by Tan Sri Abdul Khalid to Bank Islam to avoid a huge impact on the Malaysian banking industry and BBA if the case fails.

“This institution tried to revive the BBA, so they respectively agreed and Tan Sri Abdul Khalid only had to pay a small amount of the debt,” he said.

Azrul said that through this method, the debt was fully settled on July 24.

Commenting on allegations that the lawyers from both sides were not informed about the out of court settlement, he said that this is normal for any case.

He said that it is the right of the parties involved to remove the appointed counsel if they believe that it can be settled amicably out of court.

“If is normal for any out of court settlement to not be known or to not inform lawyers.

“It is the right of the parties concerned to dismiss their lawyers or use them, so it is not something abnormal for lawyers to not be involved,” he said.


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