This article first appeared in The Edge Financial Daily, on February 17, 2016.

KUALA LUMPUR: Datuk Harzani Azmi, former group adviser and managing director (MD) of loss-making Tanjung Offshore Bhd, pleaded not guilty in the Sessions Court here yesterday to a charge that he fraudulently induced the company to enter into a share sale agreement with Appolusa Sdn Bhd to acquire the remaining 49% equity interest in Gas Generators (Malaysia) Sdn Bhd (Gastec) in 2013.

He also pleaded not guilty to charges of money laundering involving RM13.3 million in 2013.

If convicted, Harzani, 49, could face up to 10 years in prison and a RM250,000 fine, or both.

Clad in a brown T-shirt, Harzani appeared calm in court, and claimed trial for both charges, which were read out to him before Judge Mohd Nasir Nordin.

Mohd Nasir allowed Harzani bail of RM100,000 for each charge with one surety. Harzani was also ordered to surrender his passport to the court.

The court will also hear the application from the prosecution to seek for a joint trial for both charges on March 23.

According to the charge sheet, Harzani allegedly committed the offence on Oct 21, 2013, at 10am at Tanjung Offshore’s office by presenting a proposal entitled “Proposed Acquisition of Remaining Shares in Gastec” with regard to the acquisition through the head of corporate finance of the company, Tan Seow Hoe.

Harzani, who was group MD of Tanjung Offshore from April 23, 2012 to June 19, 2014, is said to have committed the offence when he knew at the time that the shares were overvalued.

Recall that the valuation of the shares was questioned by minority shareholders in an extraordinary general meeting held in March last year.

The acquisition saw Gastec becoming a wholly-owned subsidiary of Tanjung Offshore. Gastec is principally involved in the manufacturing and marketing of gas generators in both the industrial and offshore oil and gas markets.

Harzani was charged under Section 366(1)(a) of the Companies Act 1965 and is liable to be punished under the same Act.

Harzani was also charged for indirectly having involved in money laundering, which he is said to have instructed law firm Mathews Hun Lachimanan to move RM13.3 million from a client’s account belonging to Mathews Hun Lachimanan to a client trust account in Kenanga Investment Bank Bhd between Nov 14 and Nov 27, 2013.

He is said to have committed the offence under Section (4)(1)(a) of the Anti-Money Laundering and Anti-Terrorism Financing Act 2001, and shall be punishable under the same Act.

The deputy public prosecutor (DPP) for the first charge was Datuk Umar Saifuddin Jaafar from the Malaysian Anti-Corruption Comission (MACC), while the DPP for the second charge was Husmarudin Husin from the anti-money laundering unit of the Attorney General’s Chamber.

Harzani’s counsel was Datuk N Sivananthan.

In May last year, Harzani was detained by the MACC as part of an investigation into the alleged fradulent acquisition of Gastec.

Since January 2015, Tanjung Offshore has been fraught with alleged misdealing and long-drawn-out boardroom exchanges, which prompted the board to establish an independent committee on Jan 8 that year to review its deals, which included a proposed reverse takeover by French Bourbon SA, which would have enabled Tanjung Offshore to return to the offshore service vessel industry, which was called off on Dec 29, 2014.