(This article has been updated to amend an error on the lawyer's name. The error is regretted.)

KUALA LUMPUR (March 10): The National Feedlot Corporation (NFC) could not meet its 2010 target to slaughter 8,000 cows as the government had reneged on an execution agreement to build slaughterhouses that were required for the NFC project, NFC’s lawyers suggested at the High Court today. 

Datuk Mohd Mokhtar Ismail, who was the secretary-general of  the agriculture ministry, concurred with the lawyers that it could not repay the RM250 million loan given by the federal government in December 2007 to set up and operate a national feedlot centre in Gemas, Negeri Sembilan. 

Lawyer Datuk Seri Rajan Navaratnam, during his cross-examination of the witness, had asked him about the abattoirs.

Rajan: Can you slaughter cows without the abattoir?

Mokhtar: I agree [that you can’t slaughter cows without the abattoirs].

Rajan: If the defendant can’t slaughter cows, won’t they have issues to pay back the loan?

Mokhtar: I suppose.

However, Mokhtar denied that the government had reneged on the agreement, saying that it wanted to study the output of the feedlot centre first before building the abattoirs.

He added that the government planned to build a “Class A” slaughterhouse in Gemas that was capable of slaughtering 350 cows a day.

He testified that the government was late in delivering the abattoir because the NFC demanded one that was of “export quality”.

“The government had rejected this because the NFC project was only supposed to fulfil 40% [of the needs] of the beef market in the country. There were no plans to export to an international market when they could not fulfil the local quota,” he said.

He also testified that the NFC wanted to set a timeframe for the abattoir’s construction in the execution agreement.

“The ministry had denied this request as we were of the opinion that it should be on a ‘needs must’ basis. There were two other abattoirs in Tampin and Senawang they could have used, which could fulfil NFC’s daily slaughter capacity,” he said.

“Once they had fulfilled their capacity of both the existing abattoirs, then we would have built the Gemas abattoir,” he told Judicial Commissioner Anand Ponnudurai.

But after intense negotiations, both the government and NFC met in the middle, with the former agreeing to build the “export quality” slaughterhouse, albeit without a set date for completion.

He added that the abattoir would be used not just by NFC but all the farmers in Gemas as well.

“This is why our ministry did not agree with NFC’s suggestion that the abattoir be built inside their Gemas headquarters,” he said.

The government filed the lawsuit against NFC and its chairman Datuk Seri Dr Mohamad Salleh Ismail last May to recover the loan.

Salleh is the husband of former Wanita Umno chief Tan Sri Shahrizat Abdul Jalil, who was also formerly the minister of women, family and community development.

Also named as defendants in the suit are the couple's three children and seven companies owned by the family, including NFC.

They were accused of misappropriating and wrongly using RM118 million out of the RM250 million loan.

The government is also seeking a declaration from the court to have Salleh's family personally liable for the debt repayment, the RM118 million allegedly misappropriated from the loan and secret profits arising from it, as well as Putrajaya's entitlement to claim equitable title to the properties bought by the defendants using the misappropriated sum.

Senior Federal Counsel Azizan Arshad is representing the government in the case, while NFC and Salleh are represented by Rajan and Datuk K Kirubakaran. 

The trial resumes tomorrow.