KUALA LUMPUR (Aug 24): Pestec International Bhd (KL:PESTEC) said the former members of its management it sued earlier this month for alleged fraud and conspiracy included its ex-CEO Lim Pay Chuan.
Three other former management members named as defendants are former company secretary Pan Seng Wee, former head of transmission line and power cables segment Han Fatt Juan, and former chief financial officer Teh Bee Choo, the company said in an exchange filing on Monday in response to the bourse regulator's request for further details on the lawsuit.
The suit relates to “highly dubious transactions, inflated invoices and exorbitant payments” allegedly made by Pestec to two China-based suppliers, according to the company's earlier filing. The suppliers, Shandong Power Equipment Co Ltd (SPECO) and Shandong Electrical Engineering & Equipment Group Co, are also defendants in the suit.
The company claimed irregularities in supporting documents and the purported use of an undated and unauthorised parent company guarantee to impose liability on Pestec and support SPECO’s payment claims.
Pestec said it does not recognise the guarantee as it was never part of its corporate records nor was it acknowledged or recorded in its audited financial statements.
It noted the guarantee was also not disclosed in the disclosure letter in October 2024 related to the restricted share placement, which saw Dhaya Maju Infrastructure (Asia) Sdn Berhad emerge as the company’s new controlling shareholder.
“In the premises, the company denies any liability whatsoever under and/or arising from the guarantee. The company will take all necessary steps to resist any attempts to enforce the guarantee against the company,” Pestec said.
Under the suit, Pestec — along with its units Enersol Co Ltd and Pestech Sdn Bhd — seeks court declarations that the defendants committed fraud, engaged in a conspiracy to defraud, the former management members breached their fiduciary duties, and that the aforesaid undated guarantee is invalid.
It also seeks an order for the suppliers to repay all sums received, SPECO to repay US$200,000 (RM808,520), an order for an account of profits against the defendants who received and/or obtained the benefit of the plaintiffs' funds, and an order for tracing and/or disclosure of the documents and information necessary to identify and trace the flow of funds, the parties who received and/or benefited therefrom, and all profits, benefits and/or proceeds derived from the disputed transactions.
It also seeks special damages, including losses of at least US$7.46 million, general damages, interest and costs.
Shares of Pestec ended unchanged at six sen, valuing the company at RM153.44 million.