PENANG, May 25 (Bernama) -- The Penang state government will refer to the Insolvency Department the status of former Penang Municipal Council (MPPP) member Datuk Ahmad Ismail, who was declared a bankrupt, to clear his name.

Chief Minister Tan Sri Dr Koh Tsu Koon decided on the move after receiving a copy of a court order granting a stay of execution to Ahmad, the Bukit Bendera Umno Division chief, at his office Thursday.

The court order handed out yesterday was given to Dr Koh by Ahmad's lawyer.

Dr Koh said the state government would ask the Insolvency Department to give priority to Ahmad's case to enable the state Exco to meet again to reconsider his status as MPPP councillor.

The State Exco removed Ahmad as MPPP councillor after deliberating on his bankruptcy report received two weeks earlier.

"From what we understand, the new court order nullified the previous one on technical ground. His debt had been settled but a technical issue cropped up without his and some quarters' knowledge including the Insolvency Department.

"We are referring this case to the department to get his name cleared as soon as possible. This is according to procedure and it's up to the department to notify the state government on his status," he told reporters after holding talks with several state Umno leaders at his office today.

Among them were Deputy Chief Minister Datuk Seri Abdul Rashid Abdullah who is also Penang Umno Liaison Committee chairman and the state Exco Datuk Azhar Ibrahim who is also the Umno Liaison Committee secretary.

The Bukit Bendera Umno Division was represented by its deputy head Ishak Hamid, vice-head Omar Hussain, Wanita chief Datin Haslinda Hashim, Youth chief Mohd Salim Abdul Bari and Puteri chief Hazlina Abdul Rashid.

About 100 members of the Umno division converged at the Umno division building as a show of support to Ahmad

Dr Koh said Ahmad was removed as a councillor on Monday based on the department's notice on May 8.

He called for the state Umno leaders and members to be patient because Ahmad's position would be known in a few days time.

Meanwhile, Abdul Rashid said similar procedure would be used by the State Umno Liaison Committee to determine Ahmad's position as the division head.

Ahmad, when contacted, said the state Exco's decision to dismiss him as MPPP councillor was premature.

"As far as I am concerned, I am not a bankrupt," he said here today.

He said press reports on the matter had tarnished his image and that of Umno Bukit Bendera, and asked the Chief Minister to help clear his name.