KUALA LUMPUR (July 17): Sersol Bhd said the its chief executive officer Datuk Justin Lim Hwa Tat, who is under Malaysian Anti-Corruption Commission (MACC) investigation, had approved and instructed five payments totalling RM2.5 million made to a third party.

The purpose of the payments, which were recorded as deposits in April and May, has yet to be made known to the board, the group said in a filing on Monday (July 17) in response to Bursa Malaysia's request for additional details on the visit by a MACC team to Sersol's office on June 26.

Last Friday (July 14), Sersol said that the MACC investigation was related to certain payments the Johor-based chemical manufacturer made to a third party based on his instruction and approval.

Providing further details in its latest filing, the group said: "Based on the statements taking conducted by the MACC, the payments which were approved and instructed by Datuk Wira Justin Lim were in relation to five payments totalling RM2.5 million made to HGC Legacy Enterprise and recorded as deposits during April and May 2023 with purposes yet to be made known to the board.

"At this stage, it appears that the only member of the board who can establish contact with Datuk Wira Justin Lim is Datuk Lim Tiong Siang, the father of Datuk Wira Justin Lim. Without the clarification/explanation of Datuk Wira Justin Lim and pending the company taking further action (if any), the company is not in the position to state whether the directors, major shareholders of the company or persons connected with them have any direct or indirect interest in the payments."

“At this stage, the company is not in the position to ascertain whether Justin is the target of the investigation,” it added.

Justin, who is the major shareholder of Sersol, was the group's managing director at the time the payment was authorised, noted Sersol.

“The potential losses currently identified is RM2.5 million should the deposit payment to HGC Legacy Enterprise could not be determined or recovered for any investment or asset purchase or for any business purchase purposes.

“As the deposit payments are not related to any existing business, the board foresees that there would not be any operational impact on Sersol group,” Sersol said.

The group said it will provide full cooperation to the MACC in its investigation, and is in the process of resolving how to deal with the CEO’s absence from office.

“In the interim, the company urges the CEO to furnish full cooperation to the MACC and to have the company’s interest at priority,” it added.

The MACC visited Sersol's office on June 26 and subsequently recorded statements from the former executive director, the existing executive director and the independent directors of the group in relation to the payments made to HGC legacy.

In an earlier filing last Thursday, Sersol said Justin had been "overseas since February 2023 for purpose and reason only known to him", echoing what SMTrack Bhd — a radio frequency identification solutions provider, whose board Justin sits on as executive director — said in an earlier filing on the same day.

Sersol announced it had been served with a court order that restrained its executive chairman cum managing director, CEO, an executive director and five independent directors from exercising their powers. The suit was filed by Sersol's independent director Leong Lup Yan and executive director Tan Fie Jen on June 23.

Sersol shares closed unchanged on Monday at 10.5 sen, valuing the company at RM73.3 million.