This article first appeared in The Edge Malaysia Weekly on December 30, 2024 - January 12, 2025

Several businessmen and corporate players made the news when the law caught up with them

Founder of now-defunct MBI pyramid scheme

During his heyday between 2014 and 2018, Tedy Teow Wooi Huat was the “rainmaker” for some Penang property owners.

Developers and owners of malls, buildings and hotels would wait outside his office at the Penang Times Square to try to dispose of their property to him. Flushed with cash running into hundreds of millions, Teow was said to have paid deposits for many properties on the island.

Some of them are now the subject of legal disputes and left vacant following his extradition to China in August 2024. He is accused of cheating hundreds of people out of their money through a fraudulent pyramid scheme called MBI.

Teow started MBI in Penang in 2012 and it attracted thousands of investors from as far as China. Nobody can put a finger on how much the scheme drew but it ran into hundreds of millions.

In return for putting in the money, the scheme came with a digital platform for investors to trade a digital currency called M-Coins. Teow cut deals with property developers for them to accept M-Coins as deposits for their projects, which added to the digital coin’s false sense of legitimacy.

There was also a mall in Penang Times Square called M-Mall that only accepted M-Coins as payment for goods, services and food.

In August 2018, Teow and his son were charged with committing several financial-related crimes, including issuing unapproved digital coins. The fine was only a paltry sum of RM20 million, which they paid, but the money frozen totalled some RM177 million in 91 bank accounts.

From then on, it was downhill for MBI and M-Coins. Investors as far as China were unable to redeem their M-Coins or monetise them.

In 2022, Teow, who had two years earlier moved to Danok, Thailand, was arrested by the authorities there. After exhausting all legal avenues, the 58-year-old was extradited to China in August 2024.

MBI ceased all activities in Penang in late 2019, with thousands bemoaning their losses. The M-Mall in Penang Times Square, which was the heart of MBI’s activities, is vacant.

But the mark of MBI and Teow is still very much evident in the state as there are legal disputes related to some property development projects the scheme was involved in. — By M Shanmugam

Major shareholders of Rexit Bhd

Penangite Datuk Seow Gim Shen and Selangor resident Kong Chien Hoi, both major shareholders of Rexit Bhd (KL:REXIT), were sentenced to jail on Oct 24 by a Singapore court for participating in a conspiracy to illegally obtain the data of 9,369 individuals. Both pleaded guilty to one charge each of conspiring with Chinese national Sun Jia, 42, to have the personal information of the individuals — believed to have been stolen from gambling websites — supplied to them. Sun was allegedly linked to a global syndicate that conducted malicious cyber activities. Seow, 42, and Kong, 39, were each sentenced to 14 weeks in jail.

On Oct 11, Seow resigned as executive chairman of Rexit, just six weeks after taking on the role, citing “personal commitment and the growth of his other business ventures”. Prior to that, he served as Rexit’s CEO from early March 2024. 

In January, Seow, together with Kong (via investment holding company Metaco Asset Holdings Sdn Bhd) and Bemas Holdings Sdn Bhd, emerged as substantial shareholders of Rexit with a collective 53.27% stake or 92.27 million shares after paying 85 sen a share or a total of RM78.43 million. The trio then launched a takeover offer to acquire the remaining shares in software-as-a-service (SaaS) provider Rexit at 85 sen per share.

After the court case, in November, Rexit appointed a unit of LGMS Bhd (KL:LGMS) as an independent cybersecurity audit firm to fortify the company’s data security against breaches.

Rexit provides software to insurance and unit trust companies, and runs web-based solutions that provide insurance companies with an online system where insurance agents can undertake transactions. According to the company’s website, thousands of insurance agents, more than 10 insurance companies in Malaysia, one in Singapore, five banks and telcos utilise its e-commerce portal.

Seow remains the major shareholder of ACE Market-listed Rexit with a 23.33% stake, together with Metaco Asset Holdings (18%) and Bemas Holdings (11.95%). — By Rosalynn Poh

Executive director of YNH Property Bhd

A medical doctor by training, Datuk Dr Yu Kuan Chon started the year on the back foot as YNH Property Bhd (KL:YNHPROP) and Rapid Synergy Bhd (KL:RAPID), two companies in which he held majority stakes, saw some steep selldown.

Within 12 trading days beginning Jan 8, 2024, YNHProp’s share price fell by more than 85% of its value to hover around 55 sen.

At that time, most of Yu’s shares were pledged to brokerages, which were concerned over the state of YNHProp’s accounts. Moreover, there was speculation that Yu was under investigation for share manipulation.

In December 2023, auditors had already cast doubts on the accounts of YNHProp, particularly with regard to its RM1 billion in joint ventures and turnkey contracts that the group had listed as inventory in its books.

Apart from YNHProp and Rapid, other counters related to Yu also came under selling pressure, triggering a broad-based selldown of speculative stocks on Bursa Malaysia.

Surprisingly, the equity interest of Yu and his brother, Datuk Yu Kuan Huat, in YNHProp has remained relatively unchanged in the last one year despite the selldown, indicating that the duo had absorbed the selling pressure well and remain in control of the property developer.

Speculation of Yu being investigated came to light when the Securities Commission Malaysia slapped him with a civil suit in June this year for rigging and manipulating the shares of Shangri-La Hotels (M) Bhd (KL:SHANG) between March and July 2018.

In YNHProp’s latest annual report, the RM1 billion joint ventures are still subject to a qualified opinion by the new auditors. The company in response has initiated a special independent review of the matters raised by the auditors, of which the outcome is yet to be known.

Of immediate concern is YNHProp’s debts of RM843 million and perpetual debts of RM345 million. The company’s saving grace is its parcels of land and a shopping mall in Mont’Kiara that are to be disposed of for RM385 million.

But even with the sale of the assets, YNHProp still has no solution to the RM1 billion “inventory” problem stated in its balance sheet. — By M Shanmugam

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