KUALA LUMPUR (Jan 27): i-Serve Online Mall Sdn Bhd and its affiliates are seeking a judicial review of Bank Negara Malaysia's (BNM) asset freeze order issued against them last November under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFPUA).
The notice of the application, together with an applicant's affidavit dated Wednesday (Jan 26) that were sighted by theedgemarkets.com from an online search, showed that the case has been filed at the High Court here by Messrs Chetan Jethwani & Company.
The applicants are i-Serve Online Mall, its shareholders Datuk Goh Hwan Hua and Boon Soon Heng, Goh's wife Datin Neow Ean Lee, i-Serve Technology & Vacations Sdn Bhd (ISTV), Advance Digital Ventures Bhd (ADV), and Trillion Cove Holdings Bhd (TCH).
Goh, who is said to be the financial backer of the newly-established ultra low-cost carrier MYAirline Sdn Bhd, owns 31.75% in i-Serve Online Mall. He is also the group chief executive officer of ADV — where Neow is executive chairman — as well as the group CEO of TCH, and a director of ISTV. Boon, also a director at ISTV, holds a 15.87% stake in i-Serve Online Mall.
It was reported last November that 22 premises linked to i-Serve Online Mall and its related affiliates across Kuala Lumpur and Selangor were raided by the National Anti-Financial Crime Centre with BNM as the lead agency, along with the Securities Commission Malaysia, Companies Commission of Malaysia, Malaysian Anti-Corruption Commission, Royal Malaysia Police and CyberSecurity Malaysia.
The joint enforcement action resulted in the freezing of 45 bank accounts in seven banks and seizure of cash totalling RM118.7 million by the authorities, according to a statement dated Nov 15 on BNM's website. The central bank said the action taken against i-Serve Online Mall was due to suspicion of committing various offences, including under the Financial Services Act 2013 (FSA) and AMLATFPUA.
Subsequently, i-Serve Online Mall issued a statement three days later to request that BNM clarify its “vague and factually incorrect” statements. It contended that the statements made by the central bank might mislead the public regarding the nature of the enforcement action taken against the company and its affiliates, and that the statements had severely damaged their reputations. It also refuted that any cash seizure took place.
In their judicial review application, six respondents were named: BNM, the central bank's financial intelligence and enforcement department (FIED) director Mohd Fuad Arshad, FIED manager Sarah Syamimi Mohd Suhaimi, FIED officers Muhammad Banjumaswira Ishak and Maisarah Najla Mansor, as well as the Attorney-General’s Chambers' deputy public prosecutor Kamal Baharin Omar.
The applicants are seeking leave from the court for a certiorari order to quash the 14 asset freeze orders that BNM issued on Nov 11 last year under AMLATFPUA's Section 44, and a mandamus order to compel the respondents to consider their applications — dated Nov 24, and Dec 8, last year — to revoke and or vary the asset freeze orders.
They also want the respondents to furnish them with all correspondence, instruments and records related to the investigations carried out by BNM, and all search and seizure warrants and asset freeze orders that are in their possession.
The applicants are also seeking a stay of the asset freeze orders, pending the disposal of this judicial review application.
In judicial review applications, leave (permission) has to be gained from the court before the full merits of an application can be heard.
In Goh's affidavit in support of the judicial review application, he said the applicants believe the enforcement actions taken against i-Serve Online Mall and its affiliates were an infringement of their rights, and that they will continue to suffer serious prejudice, while being unable to make statutory payments, pay employee salaries and trade creditors, and provide personal sustenance — which will the livelihood of the applicants and many others.
He also claimed that the asset freeze orders issued by BNM were tainted by illegality, irrationality, procedural impropriety, and were ultra vires, mala fide, and an abuse of power.
Besides the seven applicants, Goh said the central bank also issued similar orders under Section 44(1) of AMLATFPUA against other entities and individuals it deemed to be related, connected or associated companies, and officers connected to or related to the applicants.
Besides that, BNM, along with officers from various other enforcement agencies, also executed search and seizure warrants on Nov 11 in a simultaneous raid on the offices of i-Serve Online Mall, ISTV, ADV, TCH, Goh and Boon’s residence, as well as the offices of other companies the central bank deemed were related, connected or associated to the applicants and one other ISTV director.
BNM officers, however, refused to provide the applicants a copy of the search and seizure warrants, Goh claimed.
“BNM subsequently in bad faith and maliciously issued a press release on Nov 15, 2021 to state that the purported investigation was premised under Section 137 of the Financial Services Act 2013 and that the subject of the investigation is purportedly i-Serve Online Mall and its affiliates,” he claimed.
In light of the damaging nature of the press release, Goh instructed his lawyers to seek certain clarifications from the central bank.
“On Nov 18, 2021, the applicants’ solicitors wrote to BNM and asked for clarifications that were designed to mitigate the misconceptions and negative impression caused by the issuance of the press release, and to seek confirmation that the matter was still under investigation and that the alleged subjects of the investigation were innocent until proven guilty.
“By a letter dated Nov 22, 2021, BNM, through the second respondent (Mohd Fuad), denied the applicants’ request for a clarification without providing any reasons for its refusal,” he said.
“The freezing orders do not state who is the subject of the investigation and did not state the basis of the decision to issue the freezing orders.
“I am advised by our solicitors and verily believe that the freezing orders issued by BNM and the respondents [except for Kamal Baharin] have contravened Section 44(1) of AMLATFPUA and were issued beyond the extent and powers provided under the Act,” he added.
i-Serve Online Mall requests BNM to clarify 'factually incorrect' press statement on joint action enforcement
BNM raids i-Serve Online Mall, seizes cash and freezes accounts totalling RM118.7m