KUALA LUMPUR (July 8): Bank Pembangunan Malaysia Bhd (BPMB) was granted an ex-parte Mareva injunction by the High Court here — an asset freezing order — against 23 out of 27 defendants, which is part of a legal action over a RM400 million loan granted to Aries Telecoms (M) Bhd.

In a court filing sighted by theedgemarkets.com, Justice Atan Mustaffa Yussof Ahmad granted the injunction against the 23 defendants of which one is former president and group managing director (MD) Datuk Mohd Zafer Mohd Hashim.

The other defendants who are subject to the order include Aries' alleged shadow director Shailen Popatlal, former Aries director Roslina Ibrahim, Paneagle Sdn Bhd director Abdul Wahid Abdul Ghani, Open Fibre Sdn Bhd director Mohd Radzi Mohamed and Orient Telecoms Sdn Bhd and its directors Mustafa Ali Zaminali Sayed, Muhammad Shazhakim Shazarul Hisham and Shaza Arina Shazarul Hisham — the latter two being Roslina's son and daughter respectively.

Silver Ridge Sdn Bhd and its director Wong Chee Keong, BVS Trinity Sdn Bhd and its director Abd Hadi Abd Majid, and Zavarco plc and its director Tunku Mazlina Tunku Abd Aziz were also named.

Former Aries group MD and director Datuk Wira Ranjeet Singh Sidhu, alleged payment intermediary Datuk Noorusa’adah Othman, Paneagle Holdings Bhd, Primawin Ltd, China Finance Ltd, Hadron Equities Ltd and VCB Malaysia Bhd rounded up the 23 who had their assets frozen.

The order was granted by Justice Atan Mustaffa via Zoom proceedings on Monday (July 4). PBMB was represented by lawyer Datuk Lim Chee Wee, whereas third defendant Aries director Wan Alias Wan Ngah and 18th defendant Open Fibre were represented by Terence Chan.

The court also ordered the defendants to provide “full, complete and accurate accounts” of their assets within fourteen days to the court.

They were ordered to provide all their assets in Malaysia or anywhere else in the world whether in their own names or not and whether solely or jointly owned, giving the value, location and details of all such assets.

They were ordered to provide:

The defendants that are companies are only allowed by the court to use a sum not exceeding RM20,000 per month for legal advice and representation and a reasonable sum for the ordinary and proper course of business of these parties.

Meanwhile, Zafer and the other persons named are allowed a sum not exceeding RM10,000 per month for their ordinary living expenses and legal advice and representation.

The order will remain in force for the duration of the RM400 million legal action.

In May 2012, Aries was granted a RM400 million loan to partly finance a RM1.3 billion project undertaken by Aries to instal a fibre optic network around Peninsular Malaysia.

BPMB, a development financial institution (DFI), is seeking a total of RM564.99 million in losses and damages as a result of the acts by the defendants, and is making a further claim of exemplary damages against the defendants, given what BPMB claimed were calculated acts on the part of the defendants to make a profit for themselves, which BPMB said "might well exceed any compensation payable".

BPMB accused the defendants of conspiring and using unlawful means to defraud the DFI, and of concealing such fraud and its proceeds from BPMB.

According to the DFI, the loan was disbursed to Aries without fulfilling the necessary conditions.

BPMB also alleged that the money, which was meant to be used for the fibre optic project, was misused. The whopping sum was “siphoned and/or unjustifiably transferred” to other entities, it claimed, including Paneagle Holdings, BVS Trinity, VCB Malaysia, Orient Telecoms and/or Primawin — all of whom have been named as defendants in the suit.

The loan approval was granted based on, among others, the appointment of Huawei Technologies Co Ltd, China (Huawei China) as the turnkey contractor to build, operate and maintain the network for the project. However, Huawei China was subsequently replaced by Paneagle Holdings without the full knowledge, consent and/or approval of BPMB.

Although Huawei was removed from the project, the RM400 million loan was still disbursed via two tranches of RM200 million each to Aries (then known as V Telecoms Bhd), according to the court filing, as Zafer allegedly approved two separate waivers of certain conditions for the granting of the loan. The waivers were made a few days before the first and second disbursements in July 2012 and November 2013 respectively.

BPMB said it also discovered that former Aries group MD and director Ranjeet Singh Sidhu (the 13th defendant) had, on behalf of Aries, made an RM8 million payment to Zafer through intermediary Noorusa'adah (14th defendant) on July 4, 2012 for the successful disbursement of the RM400 million loan to the company.

About two years later, in July 2014, Aries requested for more time to repay the loan to enable the company to get listed on the London Stock Exchange Alternative Investment Market.

BPMB granted the request in exchange for a full repayment should the listing be successful. Aries, however, failed in its listing bid.

In July 2018, the DFI issued a notice of default over the loan to Aries, demanding the full repayment of RM451.27 million.

 A year later, in May 2019, a summary judgement was entered against Aries for the sum demanded, although the company appealed and obtained a stay of execution from the Court of Appeal, subject to BPMB's right to appoint a receiver and manager (R&M) under the relevant debenture.

The DFI then appointed Lim Keng Peo of Deloitte Corporate Solutions Sdn Bhd as the R&M over the assets and undertakings of Aries.

Lim's investigations into Aries revealed that the defendants, in their various capacities, had allegedly been involved in:

While Silver Ridge Sdn Bhd and/or Silver Ridge Holdings had certified the completion of the 39 fibre optic links under the project, BPMB, however, said the R&M could not locate documentary evidence to show that all 1,562km of fibre optic links had been built.

The DFI also claimed that Shailen (the second defendant) was involved in the alleged misconduct and wrongdoing in relation to the loan granted, among others. BPMB claimed that Shailen was Aries' shadow director and was in control of and/or had owned and/or substantially owned Primawin (19th defendant), China Finance (20th defendant) and Arab Emirates Capital Ltd (now known as Hadron Equities Ltd, the 21st defendant), all of which were incorporated in the British Virgin Islands.