This article first appeared in The Edge Malaysia Weekly on October 14, 2024 - October 20, 2024
MBI Group, founded by Tedy Teow Wooi Huat 15 years ago, was initially presented as a legitimate “members-only” investment programme and loyalty scheme promising investors exceptionally high returns. Unfortunately, it turned out to be a money game, allegedly involving fraud, scams and operating as a pyramid scheme. Ironically, for an entity named “Mobility Beyond Imagination”, it seems that the only thing that truly moved beyond imagination was the investors’ hard-earned money — straight out of their pockets.
In November 2021, about 400 Chinese nationals who had invested in MBI filed a class action at the Kuala Lumpur High Court against 17 defendants that included MBI-related companies, Tedy, his associates as well as his sons Teow Chee Chow and Teow Ee Meng. Essentially, the 400 Chinese nationals were claiming for RM170 million, excluding the dividends and estimated investment returns from stock splits that had been promised by MBI. In other words, these investors were seeking only the return of their principal amount of RM170 million.
The trial was to have commenced on Oct 7, but was postponed. A new trial date has yet to be determined.
The lead plaintiff is represented by K F Ee & Co, whereas the defendants are represented by Chun Hoo & Partners and Jagjit Ariff & Co.
In a class action lawsuit, if the plaintiff wins, the other members of the class will generally also benefit from the court’s decision. A class action is designed to address claims that affect a large group of people similarly, so if the lead plaintiff — who represents the class — wins, the judgment or settlement usually applies to all the class members who did not opt out of the lawsuit. This means everyone in the class typically shares in the financial recovery or relief awarded, although the exact distribution might vary based on individual circumstances within the class.
The 58-year-old Tedy faces even more charges in China, where he is accused of defrauding about two million Chinese nationals out of a total of 10 million victims worldwide, amounting to a staggering RMB500 billion (over RM300 billion).
In a desperate bid to reclaim their investments from MBI’s alleged online pyramid scheme, hundreds of aggrieved Chinese nationals flew to Malaysia in October 2019 to search for Tedy. They held multiple peaceful demonstrations in front of the Chinese Embassy in Kuala Lumpur, MBI’s office at Ampang Avenue, the Jinjang Selatan police station, the Royal Museum and even the Prime Minister’s Office in Putrajaya. Their aim was to seek assistance from both the Chinese and Malaysian governments in the hope of seeing justice served and recovering their lost funds.
Since then, police reports have been lodged by more than 1,500 mainland Chinese victims in Malaysia involving the sum of around RM480 million.
In court documents sighted by The Edge, the lead plaintiff claimed that investors in the MBI scheme were lured into purchasing virtual coins and tokens — which were presented as valuable investment tools or currency instruments for use at hotels, restaurants, properties and shopping malls operated by MBI and its partners — via a web portal. The allure of the scheme was underscored by the promise that the digital coins, dubbed “M-Coins”, would only appreciate — never depreciate — in value, according to MFC Relevant Learning Materials, a book published and distributed by MBI.
In August 2016, the lead plaintiff was approached by friends and MBI agents, who introduced an online investment scheme known as MFC Club. The pitch included promises that MBI investors would have the opportunity to visit Malaysia and Thailand to explore the various ventures of MBI Group, further boosting confidence in the investment scheme.
During his visits to Malaysia with other potential investors, the lead plaintiff saw that MBI Group advertisements were visible everywhere, including on the jet bridge of Penang International Airport, in AirAsia’s fleet, at bus stops and along highways. All of these further strengthened their confidence in MBI Group and its investment schemes.
Ultimately, the lead plaintiff invested in a total of 55 accounts in MFC Club, under the impression that it was a “multilevel direct selling” scheme and a financial management platform promising high returns — not a “get-rich-quick pyramid scheme”. Now, the lead plaintiff is seeking the return of his principal investment of RM3.3 million from the defendants.
As the legal battle continues, the outcome of this civil suit may not only determine the fate of the RM170 million sought by all the plaintiffs in the class action, but also serve as a cautionary reminder for investors in high-yield schemes.
Read also:
Cover Story: Picking up the pieces from MBI’s collapse
Cover Story: Penang World City and the MBI effect
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