KUALA LUMPUR: Objections are mounting to the holding of the much-criticised 3-in-1 Maju Institute for Educational Development (MIED) - the MIC's education arm, and several parties are trying to stop the Annual General Meeting (AGM) which is going to be held this Monday.

Former MIC treasurer-general and MIED trustee Tan Sri M Mahalingam, former trustee and founding member Datuk S. Subramaniam and former MIC Youth chief and life member S.Vigneswaran are in the forefront to stop the meeting.

They noted that the board of trustees would be in further violation of the law if the meeting went ahead as it is being probed by the Companies Commission of Malaysia (CCM) for alleged violation of eight sections under the Companies Act.

The CCM is investigating complaints against the MIED involving alleged breach of trust, financial mismanagement, abuse of power, negligence and breach of statutory duties by the trustees.

This includes the alleged issue of personal loans of some RM100 million to individuals, company officials and at least one trustee. Flaws in awarding contracts for the construction of the MIED-run Asian Institute of Medicine, Science and Technology University (AIMST) University in Semeling, Kedah, have also been alleged.

Vigneswaran, who on Monday slammed the nine trustees of the billion-ringgit entity with an unprecedented derivative action under Section 181 of the Companies Act, told The Malay Mail that he had written to the trustees and the company secretary, objecting to the meeting.

In his letter to them, he stated: "I will not be in the interests of MIED that has not held any AGM for the year 2004, 2005 and 2006 to rush into holding an AGM to pass the accounts when there are numerous allegations of improprieties and irregularities.

"One such matter is the amount of payment to Tan Sri G. Vadiveloo (current trustee) ranging from RM350,000 to RM850,000 which was unauthorised by the Board of Trustees as per letters from Tan Sri Mahalingam (former treasurer) and Tan Sri K. Kumaran (current trustee).

"Further, in view of the investigation on MIED by CCM pursuant to Section 165, Section 169, Section 129, Section 132, Section 133, Section 152 and Section 364(2) Companies Act 1965, any act to validate any unauthorised, fraudulent and irregular acts to or by the company shall be construed as an attempt to further violate the law."

Subramaniam is expected to hold a press conference tomorrow to pile more pressure on stopping the meeting.

Vigneswaran's derivative action is set to open a can of worms involving alleged irregularities that have wrecked the credibility of the MIC.

If the court allows the class action to proceed, the MIED - that operates on government grants and public donations - would be the plaintiff.

The section allows MIED, as an entity, to sue to recover or punish its trustees, directors and officers for losses, fraud, negligence and other failures.

The derivative action is thought to be the first such action involving a public company.

The CCM is investigating MIED under the following sections of the Companies Act:

● Section 143 - failure to hold annual general meetings;

● Section 165 - holding the 23rd AGM (scheduled for Monday) to approve audited accounts for 2004, 2005 and 2006;

● Section 169 - failure to submit profit and loss accounts balance sheet and directors' report;

● Section 129 - failure to obtain the sanction of members to allow six trustees, who were already above the age of 70 in 2008, to continue in office for the year 2009;

● Section 152 - failure to pass a special resolution on trustees above the age of 70 seeking re-election;

● Section 132 - negligence of directors;

● Section 133 - granting loans to directors, and

● Section 364(2) - misleading and false information in the balance sheet.

MIED was rocked last week when Tan Sri Dr K. Ampikaipakan resigned as AIMST University chairman, trustee and director of MIED. Two other AIMST directors are expected to follow suit.

MIED, a Section 24 company, has been mired in financial irregularities and has not had a formal AGM since its establishment in 1984.

MIED sourced millions of ringgit from the Indian community, received about RM300 million from the government and acquired a RM220 million loan from Bank Pembangunan Malaysia to build the AIMST campus on a 228-acre site.

The cost of construction ballooned from an initial RM230 million to close to RM500 million. He noted that MIED is not a business entity but a Section 24 company or a trust organisation that is limited by guarantee.