The former head of Malaysian plantation giant Sime Darby appeared in court Tuesday over a land deal that saddled the state-controlled firm with $30 million in losses, a prosecutor said.
Top officials in the Malaysian government and state-owned firms are rarely prosecuted despite regular claims of rampant corruption.
But former Sime Darby group chief executive Ahmad Zubir Murshid pleaded not guilty to criminal breach of trust and cheating over the affair, which emerged in 2010, said Malaysian Anti-Corruption Commission prosecutor Kevin Morais.
The offence carries a maximum sentence of 20 years in prison.
Ahmad Zubir is accused of instructing the government of Malaysia's Sarawak state on Borneo island to sell land awarded to Sime Darby to two other companies, forcing his own firm to buy it back later, Morais said.
Ahmad Zubir allegedly also failed to inform Sime Darby's board of the arrangement, and the fiasco cost the company some 100 million ringgit ($30 million), the prosecutor added.
Sime Darby is the world's largest listed palm-oil producer by acreage and one of Malaysia's biggest conglomerates, with its portfolio also including power, property and other divisions.
Morais declined comment on whether there was evidence Ahmad Zubir had profited personally from the arrangement.
The next court date has been set for October 2.
Sime Darby shocked investors in 2010 by announcing that its energy and utilities division had suffered 2.09 billion ringgit ($650 million) in overruns and provisions at loss-making projects including the huge Bakun hydroelectric dam on Borneo.
Ahmad Zubir was asked to go on leave over those deficits and was replaced shortly afterwards. The company has also sued him and several other senior executives over the losses.
Sime Darby recorded a full-year net profit of 3.66 billion ringgit for the last financial year, up sharply from 726.8 million ringgit in the previous year, when it made the provisions.