SEVEN years on, MPHB Capital Bhd (MPHB) seems to be on the last lap of a long-drawn legal dispute with the Johor government and Petroliam Nasional Bhd (Petronas) over 2,800 acres of its land in Pengerang that were acquired by the state government.

The seven parcels of MPHB’s land on the southeastern tip of Johor is where Petronas’ massive Refinery and Petrochemical Integrated Development (Rapid) is located.

MPHB claimed the parcels were acquired cheaply by the state government at 93 sen per sq ft (psf) compared with more than RM5 psf as appraised by its valuer. The land was acquired for over RM115 million. In total, MPHB is claiming over half a billion ringgit for the difference in valuation.

MPHB had fought on two fronts on the Pengerang land matter. One was a civil suit that has been struck out and the second is the land reference suit that will be heard in the Federal Court on Jan 21.

This will be the second session in the Federal Court for the land reference case and judgment on the legal dispute could be made then.

MPHB was among the land owners who have had their tracts acquired by the state government. The state government later sold the land to Petronas, which was then buying land for its Rapid project.

The seven parcels in Pengerang that belonged to MPHB’s wholly-owned subsidiary — Kelana Megah Development Sdn Bhd (KMD) — were compulsorily acquired by the Johor State Authority for the Rapid project.

The seven plots, measuring over 2,800 acres, make up about 45% of the total land acquired for the Rapid project.

The ongoing land reference proceeding initiated by MPHB is to object to the award of land by the land administrator and to seek the court to award a fair market value for the land.

To recap, KMD received Form E (Notice of Enquiry for its land) in August 2012 and filed an acceptance with objection to the 93 sen psf price on Oct 9, 2012, resulting in the land reference case.

In the course of the land reference proceedings, KMD, via its valuer, submitted a claim of RM5.30 psf as the market value for the plots of land and RM83.13 million for severance and injurious affection on KMD’s remaining land.

The government valuer, on the other hand, assessed the land’s value at 93 sen psf.

On May 14, 2014, then Petronas CEO Tan Sri Shamsul Azhar Abbas told reporters that the oil and gas corporation had no direct dealings with any party when acquiring land to build its Rapid project.

“It’s got nothing to do with us,” he was quoted as saying in the media following news that MPHB had filed a civil suit on May 9, 2014.

The Rapid project is part of the colossal RM170 billion Pengerang Integrated Petroleum Complex (PIPC) in Johor that aims to turn Malaysia into a mega petrochemical hub.

On May 9, 2014, MPHB announced that KMD had filed a civil suit in the High Court of Malaya in Johor Baru against the government of Johor and Petronas in connection with the compulsory land acquisition of the seven plots of land.

“The civil suit is filed against the defendants following breaches of the Federal Constitution, the Land Acquisition Act 1960 and the National Land Code 1965. KMD’s claim [that] is set out and particularised in the statement of claim dated May 9, 2014, seeks ‘inter alia’ the return of the seven plots of land illegally acquired and damages arising therefrom,” it said in its announcement then.

Among other things, MPHB had alleged that its land was unlawfully acquired by the Johor government at 93 sen psf despite there being an agreement between the latter and Petronas to purchase the land at RM8 psf.

In June 2014, the Johor State Authority and Petronas filed applications to strike out KMD’s plain in the civil suit. On Nov 26, 2014, the striking out applications were allowed by the High Court in Johor.

KMD’s appeal to the Court of Appeal against the decision of the High Court was dismissed by the Court of Appeal in December 2015.

In September 2016, the Federal Court dismissed KMD’s application for leave to appeal the decision of the Court of Appeal.

With the civil court case struck out, there is left the upcoming land reference case at the Federal Court, a case keenly watched by MPHB’s shareholders, including Tan Sri Surin Upatkoon, who holds a 36.6% stake as at April 2019.