KUALA LUMPUR (Dec 12): The Securities Commission Malaysia (SC) has filed a civil suit in the Kuala Lumpur High Court against five individuals for allegedly perpetrating a scheme to defraud and/or causing wrongful losses valued at RM120.6 million to four public listed companies.
In a statement on Monday (Dec 12), the SC said it filed the suit on Nov 29, 2022 against Tey Por Yee, Lim Chye Guan, See Poh Yee, Francis Tan Hock Leong and Faizatul Ikmi Abdul Razak.
It said the companies involved are Nexgram Holdings Bhd, R&A Telecommunication Group Bhd, Asdion Bhd and Ire-Tex Corp Bhd.
The SC alleged that Tey, Lim, See and Tan, in their various capacities as directors and officers of the four public listed companies, siphoned out proceeds of the companies’ fundraising exercises, while Faizatul Ikmi abetted or furthered the siphoning.
It said the aforesaid conduct of these individuals, which took place between December 2013 and July 2014, was in contravention of Sections 317A and 179 of the Capital Markets and Services Act 2007 (CMSA).
It said that under Section 317A of the CMSA, a director or an officer of a listed corporation shall not do anything with the intention of causing wrongful loss to the listed corporation.
Under Section 179, a person is prohibited from engaging in fraud or deceit when subscribing, purchasing or selling any securities.
In order to prevent dissipation of the assets of the defendants, the SC on Dec 1, 2022 obtained an injunction from the Kuala Lumpur High Court to restrain Tey, Lim, See and Faizatul Ikmi from dealing with the monies in their respective bank accounts.
The SC did not seek an injunction against Tan, as he is an undischarged bankrupt.
The regulator sought various orders in the civil suit, including orders that the defendants:
a. had contravened Sections 179 and 317A of the CMSA;
b. pay the SC the following:
i. disgorgement of all proceeds obtained from the contravention of these Sections, pursuant to Sections 200 and 360 of the same Act; and
ii. a civil penalty of RM1 million each, or such an amount as considered appropriate by the court, in accordance with Section 200(2) of the CMSA; and
c. be barred from being directors of any public-listed company, and from trading on any stock exchange or derivatives exchange, for a period of 10 years.
The SC said the High Court initially fixed Dec 12, 2022 for the defendants to respond to the injunction application.
However, it said that following the non-appearance of the defendants, the High Court granted an ad interim injunction and fixed Jan 9, 2023 for the defendants’ response.