KUALA LUMPUR (Sept 8): The controversial Genneva Sdn Bhd, once dubbed the country’s largest gold investment scam, is currently embroiled in a court battle with the company’s major shareholder as she moves to wind up the company to prevent alleged dissipation of millions in released company assets by other company directors.

In August 2024, Ng Wan Yee, a director and holder of 750,000 shares in Genneva, filed the winding-up petition at the Shah Alam High Court, which was sighted by The Edge on Tuesday.

In the winding-up petition, Wan Yee argued that it is "just and equitable" to dissolve the company to protect creditors — primarily the public victims of the gold scheme.

The move follows a Sessions Court order on June 28, 2024, which revoked long-standing seizure orders under anti-money laundering laws, effectively releasing millions of ringgit and approximately 28.3kg of gold bars back to the company.

Based on the court order, the total value of assets released to Genneva is approximately RM21,854,178.70.

In her petition, Wan Yee expressed a "high likelihood" that functional directors or other relevant parties might dissipate these recovered assets for personal benefit rather than settling claims with thousands of investors. She claimed that some directors had already attempted to "siphon monies" under the guise of paying professional fees.

She said that any assets recovered should be used to “settle any outstanding amount due and owing to the creditors of the respondent (Genneva), which includes the members of the public who have fallen victim to the gold scam committed by the respondent”.

An opposing creditor, Liew Chio Chuan, a 25% shareholder of Genneva, has applied to intervene and set aside the ex-parte appointment of Wong Weng Foo as the interim liquidator. Liew argued there was "material non-disclosure" by Wan Yee and asserted that there is "no real danger" of assets being lost before a formal hearing before the court.

A former director of Genneva, Datuk Philip Lim Jit Meng, in his affidavit of support for Liew, has alleged that Wong took "active steps" to secure support for the winding-up by holding a "town hall meeting" and creating a WhatsApp group for creditors to influence the proceedings.

Wong, a veteran insolvency practitioner, has defended these actions in his own affidavits, describing them as necessary measures for "efficient and transparent" communication with hundreds of victims who had swarmed his office with queries.

Central to the dispute is the movement of funds just days before the petition was filed. Records show that following the release of the seizure orders, Genneva's directors had authorised the transfer of RM11,659,661.20 from accounts at Maybank and Public Bank to a stakeholder account held by the company’s long-time solicitors, Messrs Gooi & Azura.

The solicitors and Maybank have justified the transfers, citing a board resolution dated June 26, 2024, and "letters of authorisation" dating back to 2016. They maintain the bank was unaware of the pending winding-up petition at the time the funds were remitted.

Following a long, hard-fought case, the decision of the winding-up petition is set for later this month on Sept 22, before judge Wan Fadhilah Nor Wan Idris at the Shah Alam High Court.

Messrs S Muhillan is representing Wan Yee, Messrs S Ravenesan is acting on behalf of the interim liquidator Wong, Liew is represented by Messrs Shui Tai, Messrs Rose Hussin is acting for another Genneva former director and shareholder Chin Wai Leong, and the supporting creditors are represented by Messrs Afdhilani while the opposing creditors are represented by Messrs Eze and Eye.

The current legal tussle is set on the backdrop of two criminal cases against the company and its directors, the first case involved Genneva’s former directors: Datuk Ng Poh Weng, Marcus Yee, Chin, and Liew.

During the trial, the prosecution asserted that Genneva was effectively taking deposits from members of the public without the required licence, while presenting the transactions as gold sales and purchases. The illegal deposit-taking occurred between November 2008 and July 2009, while the money-laundering offences occurred between July 2008 and June 2009.

The Sessions Court acquitted the four directors in 2013, and the High Court upheld that acquittal in 2016. However, the prosecution appealed, and in December 2017 the Court of Appeal overturned the acquittal, finding that the prosecution had proved its case beyond reasonable doubt. The appellate court concluded that the gold transactions fell within the definition of deposit-taking and that the gold sales functioned as a camouflage for the deposit-taking activity.

Eventually, the four directors were convicted of 154 money-laundering counts and four illegal deposit-taking counts. In February 2018, each was sentenced to eight years’ imprisonment and fined RM1 million.

Their subsequent attempts to overturn the convictions were unsuccessful; the Court of Appeal ultimately upheld the convictions and sentences.

In the second case, Genneva Malaysia Sdn Bhd (GMSB), eight individuals and two other companies — Ng Advantage Sdn Bhd and Success Attitude Sdn Bhd — were the defendants.

This case involved a bigger sum and more individuals. Initially, the Sessions Court called them to enter their defence. After their defence was called and at the end of the case, the Sessions Court judge decided to acquit all of them on March 17, 2017.

A notice of appeal was filed by the prosecution three days later, and after subsequent case managements and the transfer of the case before several High Courts, a reversal came about.

In 2020, the Court of Appeal convicted its ex-directors, general manager, other related individuals including the company business adviser and two other related companies that were charged under Section 25(1) of the Banking and Financial Institution Act 1989 (BAFIA) and/or Section 4(1) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA), who were found guilty to the charges for accepting money from depositors without a valid licence under Section 25(1) of the BAFIA and for involvement in money-laundering activities, reversing the High Court decision.

Poh Weng, Yee, Philip, Datuk Tan Liang Keat, Lim Kah Heng, Chiew Soo Ling, Ahmad Khairuddin Ilias, and Yao Kee Boon, as well as GMSB, Ng Advantage, and Success Attitude, were involved in the second case.

Following the convictions, the court handed down massive penalties, imposing a total fine of RM450 million on GMSB for illegal deposit-taking, and additional fines of RM101 million and RM8 million on Ng Advantage and Success Attitude respectively. The eight convicted individuals were sentenced to between three and nine years' imprisonment and fined a combined total of RM780 million.

Read also:
Court of Appeal upholds jail sentence on four former Genneva directors