COMPASSIONATE PAYMENT BASED ON AG'S ADVICE - MUSTAPA

PASIR PUTEH (Kelantan, Malaysia), Sept 1 (Bernama) -- The compassionate payment
to northeast state of Kelantan via the Federal Development Department (JPP) was
not done in haste but based on advice from the Attorney-General (AG).

International Trade and Industry Minister Mustapa Mohamad told reporters that
the federal government had a credible and transparent judiciary system.

"The Attorney-General's advice is based on the law," he said after breaking fast
and presenting aid to 75 orphans at a mosque near here Tuesday.

Mustapa was commenting a statement by Menteri Besar (state Chief Minister) Nik
Aziz Nik Mat after filing a civil suit against Petronas over the oil royalty
dispute.

Nik Aziz said that the suit was to defend the feelings and property of Kelantan
people seized by the federal government.

The federal government rejected Kelantan's demand for oil royalty as the rig was
located 200 nautical miles and thus outside its territory (100 miles).

It then approved compasionate payment to Kelantan to be disbursed via JPP.

Mustapa believed that the federal government decision was correct based on
existing laws.

"I believe it to the court to decide who is correct," said the Kelantan Umno
(United Malays National Organisation) liaison chairman.

The federal government had approved RM25mil (US$7.97 million) as first phase
compassionate payment to be disbursed to over 70,000 poor students.
--BERNAMA