KUALA LUMPUR (Oct 24): Microlink Solutions Bhd (KL:MICROLN) has initiated legal proceedings against its former chief executive officer (CEO) Chia Yong Wei, seeking damages amounting to US$9.39 million (RM38.74 million) over alleged breaches of fiduciary duties and fraud.
The digital banking solutions provider and its wholly-owned Microlink Innovation Sdn Bhd filed a writ and statement of claim in the High Court of Kuala Lumpur on Friday (Oct 24) through their solicitors, Messrs Sitham & Associates, according to Microlink's bourse filing.
The civil suit centres on alleged breaches of fiduciary duties, fraudulent misrepresentation and breach of trust by Chia in relation to the company’s funds and affairs, which Microlink said have caused financial loss and harm to the group.
The plaintiffs are seeking a declaration that Chia is guilty of fraud, fraudulent breach of trust or breach of fiduciary duties, and payment of damages amounting to US$9.39 million, along with extra money to punish him and to cover almost all their legal fees.
It should be noted that the allegations in the newly filed case have yet to be tested in court, while Chia has not publicly responded to the suit.
Chia, who was appointed as Microlink’s CEO in March 2016, served for over six years before stepping down in September 2022. He has since been replaced by Ramlee Abdullah.
Microlink, which was transferred to the Main Market of Bursa Malaysia in 2023, saw the emergence of Insas Bhd as its largest shareholder in July this year, following the subscription of a 29.81% stake that raised Insas' interest to 32.89%.
The company was profitable in four of the last five financial years, according to AskEdge data, but its recent performance is a concern, marked by a net loss of RM95.77 million on a revenue of RM413.01 million in its extended 15-month FY2025 that ended on June 30. This extended financial period was due to a change in its financial year end from March 31 to June 30.
Microlink shares slipped 0.5 sen or 5.26% to close at nine sen on Friday, giving the group a market capitalisation of RM144.77 million. Year to date, the counter has fallen by more than 62%.