KUALA LUMPUR (Oct 14): A 62-year-old sales manager seeking a return of his RM500,000 investment told the High Court here on Monday that MYAirline Sdn Bhd co-founder and major shareholder Datuk Allan Goh Hwan Hua was the man behind four companies that allegedly accepted deposits with promises of returns without a valid licence.
Goh is one of the co-founders of the low-cost carrier, which had collapsed on Oct 12 last year less than 11 months after it took to the skies.
The four companies are i-Serve Online Mall Sdn Bhd, Bright Moon Venture PLT, Trillion Cove Holdings Bhd and QA Smart Partnership PLT, in which Koh Kok Chong had invested his RM500,000 in 2020. Koh is one of the 15 plaintiffs who are suing Goh and the four companies for a return of RM8 million of their total investment.
Koh told Judicial Commissioner Leong Wai Hong that he had entered into a partners financing agreement (PFA) with QA Smart Partnership for a one-year period from Dec 9, 2020 to Dec 9, 2021, where he had agreed to lend QA Smart Partnership RM500,000 with monthly returns of 3% of the financing sum. He added that five other plaintiffs — who had also invested in QA Smart Partnership — also suffered a similar fate though the sum of their investments vary.
In his claim in the suit, Koh is also seeking a declaration that the PFA between him and QA Smart Partnership is illegal and void from the beginning and had no legal effect because the company had accepted deposits from him with promises of returns without a valid licence contrary to Section 137(1) Financial Services Act (FSA) 2013.
“I am also seeking a declaration that the defendants in this action operated as a single economic unit and that Goh is the controlling mind of the other defendant companies. In addition, I am also seeking that the defendants be severally and/or jointly liable to return the Subscription Price as the Subscription Agreement is illegal and void from the beginning and had no legal effect,” he added.
The plaintiffs were represented by Amanda Sonia Mather, Rajesh Nagarajan and Sachpreetraj Singh Sohal.
Co-mingling of funds
Koh said he can prove that the four companies operated as a single economic unit, based on the discovery application granted by the court on Aug 12 where he allegedly saw the co-mingling of funds.
In the suit filed on July 21, 2023, the 15 plaintiffs claimed that at all material times, the four companies were prompt and consistent in their monthly payments of returns. However, the companies had failed to make the agreed upon monthly payments from November 2021 to June 2022, despite having been sent letters of demand by the plaintiffs' solicitors.
Koh said some time in November 2021 — during Bank Negara Malaysia's (BNM) raid of I-Serve Online Mall and its related affiliates — the plaintiffs in the suit had stopped receiving monthly returns or payments from the defendants.
“It was later brought to my attention that BNM had issued freezing orders against Goh, i-Serve Online Mall and Trillion Cove pursuant to Section 44(1) on Nov 11, 2021. Subsequently, the seizing orders were issued by the Attorney General Chambers against all the defendants except Bright Moon Venture," said Koh.
Koh also said that Goh, along with i-Serve Online Mall and Trillion Cove initiated a judicial review at the High Court and on Nov 15, 2021, BNM had issued another statement claiming a joint enforcement action was taken on i-Serve Online Mall and its related affiliates for suspicion of committing various offences under the Financial Services Act 2013 (FSA) and the Anti-Money Laundering, Anti Terrorism Financing and Proceeds from Unlawful Activity (AMLATFPUA) Act 2001, resulting in the freezing of 45 bank accounts and a total of RM118.7 million being seized.
Koh said in October 2022, BNM had also imposed a compound of RM50 million on i-Serve Online Mall and six other related entities for accepting deposits without a licence under Section 137(1) of the FSA and Section 4(1) of AMLATFPUA.
On cross-examination by Chethan Jethwani for i-Serve Online Mall, Koh agreed that under Section 270 of the FSA, the plaintiffs could not claim the PFA contract is void for breach of Section 137 of the FSA.
Koh also agreed that he did not pay to i-Serve Online Mall but only paid the sum to QA Smart Partnership.
Despite claims of fraud committed by the defendants, Koh agreed with Chethan that after the freezing order from BNM, and assurances by Goh, he did not put in any more investments.
He, however, disagreed with counsel for the other defendants that the action by BNM to institute a compound showed there was no admission of guilt.
The hearing before JC Leong will continue on Oct 21.