However, there is a type of business case that doesn’t involve theft or fraud in the usual sense but still makes an organization much worse off. That’s exactly what the lawsuit between Mara Corporation Sdn Bhd and its former group CEO, Datuk Badlisyah Abdul Ghani, is. It’s happening more slowly and in a more formal way, but it’s still very bad.
A recent decision by the Court of Appeal upheld a decision by the High Court that Badlisyah was responsible for breaking his fiduciary and contractual duties. The decision was written by COA judge Datuk Ahmad Kamal Md Shahid, and all the judges agreed on it. The three-person bench decided that the High Court judge had done the right thing by evaluating both the written evidence and the testimony of the witnesses, and that the appellate court should not get involved. It seemed like the tone of the written grounds was meant to be measured and careful. Most of the time, courts don’t raise their voices, but this certainly does.
A hiring decision, or rather a series of them, is at the heart of this case. Mara Corp said Badlisyah hired 25 people without getting permission from the Board of Directors. Twelve of them were senior directors. It cost RM9.4 million a year to hire those people. The budget that was approved for administrative staff in 2020? RM1.799 million. That’s a difference of 156%. Badlisyah may have thought he was in charge or felt rushed when making some of those choices. But having power and thinking you have it are two different things. This lawsuit started because of that difference.
In its decision in May 2024, the High Court said that Badlisyah had to pay more than RM3.4 million to the company to make up for the damage they caused. This included RM2.728 million in damages and an extra RM739,541.60 in compensation. Mara Corp first filed the lawsuit in 2021, saying it had lost about RM21 million. The final damages only cover a part of that claim. Still, the Court of Appeal didn’t think the lower court made any mistakes in its reasoning, so it didn’t change the results.
Aside from the numbers, the specific accusation about the Board Nomination and Remuneration Committee meeting on November 2, 2020 is what makes this case worth following. The COA judge said Badlisyah, as group CEO, had a clear duty to make sure the BNRC had correct information at the right time. The judge decided that he did not properly tell committee members what was going on with the hired people. No, that’s not a small matter; that’s the kind of finding that shows the connection between executive leadership and board oversight broke down completely.
People are likely to notice that Badlisyah fought the appeal himself, which is a choice that usually gets a lot of attention in high-stakes business cases. In the past, Messrs Zul Rafique & Partners fought for him in the High Court. He had to pay RM50,000 in costs as well. Lawyers from Lee Hishammuddin Allen & Gledhill were working for Mara Corp.
Like the Mara Corporation Badlisyah breach lawsuit, these cases don’t always make the news like criminal trials do, but they are very important to the institution. There have been many mistakes, such as staff costs going over budget by 156%, hiring decisions made without board approval, and a CEO who lied to a key committee about facts. They show that the structure of government was either too loose or too easy to ignore. We don’t know if this will teach anyone at Mara Corp or other companies with ties to the government anything. Courts can make people pay. They can’t promise that someone will ask first next time.
