Former DAP vice-president Lim Guan Eng today filed his defence against Eric Chias defamation suit against him at the High Court Registry in Denmark House, Kuala Lumpur.

On Feb 8, Chia had served the defamation suit on Lim over a police report he made six years ago concerning Chias part in the RM76.4 million payment scandal Perwaja Steel was embroiled in while he was its managing director.

Lim filed his statement of defence via his lawyer Karpal Singh but declined to reveal the contents.

Let the courts decide, he told malaysiakini .

Lim also said Prime Minister Dr Mahathir Mohamad and the government must explain the downfall of the beleaguered steel plant and how it came to incur the more than RM10 billion loss.

RM10 billion is a massive sum of money which could have been properly utilised to eradicate poverty, build another international airport and the biggest port in Asia, he said.

This sum cannot be totally ignored and we hope Mahathir can direct the investigation at Perwaja to be completed soon, he added.

Chia filed a 15-page civil suit against Lim for accusing him of being dishonest and acting in a manner detrimental to interests of Perwaja while he served as its managing director.

Chia said he was accused of being corrupt and unfit to serve Perwaja and that he had acted in conflict of his duties when he approved the transmission of RM76.4 million to Hong Kong-based Frilsham Enterprise Inc.

In his statement of claim, filed in January, Chia said Lim had insinuated that he was in breach of criminal law and deserving of a prison sentence and Chias conduct was such as to cause loss and prejudice to Perwaja.

Police report

In Lims police report lodged April 11, 1996, he claimed that Chia had approved payment of RM76.4 million on Feb 22, 1994 to Frilsham, which had claimed to be an associate of NKK Japan.

Lim claimed that the payment was made based on a letter from N Otani, director of consultant, engineering department of iron and steel engineering division at NKK on Feb 17 the same year.

NKK was to provide spare parts and services for the beam and section mill plant project in Gurun, Kedah undertaken by Perwaja.

Lim added that Chia authorised Bank Bumiputera to make the payment on Feb 22 to Frilshams American Express bank account about a week later without verifying and confirming with NKK Japan if it had indeed sent the letter.

Lim said what was more shocking was that neither NKK nor Otani had ever made a request for the RM76.4 million payment. Perwaja has not been able to trace or recover any of the money.

Perwaja, he said, has also not taken any action when it discovered the fraud. Neither were any investigations launched to check if its officers were involved in the gigantic fraud to cheat the company.

Lim said he made the police report because no report had been lodged with the Anti-Corruption Agency or the police almost two years after the fraud was committed.

He added that stern action must be taken against Chia and those responsible for the cover-up of the missing RM76.4 million.

Swiss bank account

Mahathir admitted during a dialogue with Malaysians in London on Sunday that there was a possibility of fund misappropriation and mismanagement in Perwaja over its colossal loss.

He said the government had already investigated the matter but recovery of the missing money was not easy as it was reported to be held in a Swiss bank account. Swiss monetary authorities were not willing to reveal who the account-holders were.

In July 1999, former deputy premier Anwar Ibrahim had also lodged a police report alleging Mahathirs involvement in the matter.

In his police report, Anwar, who was then finance minister, said international accountant Price Waterhouse was appointed as the independent auditor in early 1996 soon after being alerted that Perwaja was almost insolvent and would require massive injection of funds from the government.

Anwar had said that the appointment of auditor had to be done because several earlier attempts to obtain detailed information from the management, particularly Chia, failed as he repeatedly claimed that his action had the support and was under the direction of the prime minister.

Anwar also revealed that Chias claim was further substantiated with letters written by the prime minister himself.