Kota Kinabalu: The Special Corruption Court heard on Monday that former Sabah Railway Department chief engineer Ismail Ahmad had other sources of income apart from his salary, including rental proceeds from 26 properties comprising houses, apartments and land.
Testifying in his defence before Judge Andi Razalijaya A. Dadi, Ismail, 65, said in his witness statement that the properties were owned by him, his parents and his two wives, Muhilim @ Masniah Buaya @ Buayie (first wife) and Runtiah Rais (second wife).
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He said the properties were rented out to third parties, with the rental payments collected by him.
Ismail, now a pensioner, said some of the rental income was declared to the Inland Revenue Board (IRB), while some was not as certain payments were received late and declaring additional rental income would have resulted in higher taxes.
He told the court that he declared RM100,800 in rental income to the IRB for 2016.
According to Ismail, most rental payments were received in cash, which was initially kept at home before being deposited into bank accounts.
He also testified that he received insurance maturity payments amounting to RM332,461.80 from an insurance company in October 2014. The money was credited directly into a joint OCBC Bank account held with his second wife, Runtiah.
Ismail further claimed that he received RM80,000 from his mother’s insurance maturity proceeds as a gift in 2016.
He said another RM80,000 was received from his late father’s insurance maturity proceeds after the money was withdrawn and handed to him by his sister.
Ismail told the court that he had complied with a Malaysian Anti-Corruption Commission (MACC) notice requiring him to declare his assets and income in 2018, and had responded through a letter dated June 12, 2018, together with the required documents.
He said his rental properties included houses in Taman Austral, Kendara Apartment, Taman Kemajuan and Hartamas Height.
He added that properties belonging to his parents and wives, including residential properties in Sandakan and Penampang as well as agricultural land in Kudat and Beaufort, also generated rental income.
Ismail said all 26 properties had been rented out and the rental proceeds were collected by him.
He further testified that he obtained personal loans from several individuals between 2010 and 2014, with the funds disbursed between 2013 and 2016 for stock market investments and to secure favourable foreign exchange rates to finance his children’s overseas education.
He said the lenders were relatives and friends.
Ismail maintained that funds deposited into the joint HSBC account with his first wife between March and September 2016 came from rental income, insurance maturity proceeds and personal loans.
He said he alone operated the HSBC account and personally made all cash deposits without Muhilim’s knowledge or involvement.
He gave a similar explanation regarding the joint OCBC account with his second wife, saying the funds deposited into the account came from the same sources and that he had full control and operation of the account.
Ismail said Runtiah was not involved in the control or operation of the joint account.
Ismail is jointly charged with Muhilim over RM275,550 allegedly derived from unlawful activities between March and September 2016 at the HSBC Kota Kinabalu branch.
He is also jointly charged with Runtiah over RM133,300 allegedly derived from unlawful activities between February and September 2016 at the OCBC Bank Kota Kinabalu branch.
Runtiah separately faces five money laundering charges involving RM30,000 allegedly derived from unlawful activities at Maybank branches in Karamunsing, Putatan and Kg Air, as well as Pos Malaysia Putatan, on July 1, 2016.
Each charge is framed under Section 4(1)(b) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001, which carries a maximum jail term of 15 years and a fine of not less than five times the amount of the proceeds from unlawful activities, or RM5 million, whichever is higher, upon conviction.
During examination-in-chief, Ismail told the court that his actual income was higher than what had been presented as he generated income from his rental properties.
He said he believed in developing his assets rather than allowing them to remain idle.
“I am the kind of person who will not allow my assets to remain idle without generating income. Whatever assets I have, I will develop them and generate income from them,” he said.
Ismail added that many people might assume he was involved in corruption because they were unaware of his income from rental assets.
When asked whether the funds were proceeds of unlawful activities, including alleged bribes, Ismail replied: “No.”
Ismail and his wives are represented by counsel Zahir Hussein Ahmad Shah, Datuk Rizwandean M Borhan and Elhanan James.
MACC Deputy Public Prosecutors Haresh Prakash Somiah and Nurul Izzati Sapifee appeared for the prosecution.
Trial adjourned to Aug 3-5.
