1. ) P. Ponnamal A/P Ponniah v 1. ) Goh Hwan Hua (WA-22NCC-606-11/2022)

P. PONNAMAL A/P PONNIAH …PLAINTIFFS (IC No.: 510720-01-5172)

PREMA A/P ACHU (IC No.: 640524-10-7008)

DEBORAH ANN RODRIGO (IC No.: 651003-10-7276)

Y.M.CHE ENGKU MAHIRAH BT ABDULLAH (IC No.:510313-10-5904)

GOH CHIANG BENG (IC No.: 640824-08-5103)

ALEXANDER VINCENT (IC No.: 640515-08-6233)

GEA BAN THONG (IC No.: 640229-08-5213)

NG GUAT TIN (IC No.: 650425-18-5770)

KOH KOCK KEANG (IC No.: 590826-10-6219)

SUPRAMANIAM A/L S SHANMUGAM (IC No.: 580322-08-6171)

HARITH BIN ABDUL HAMID (IC No.: 641116-01-6267)

ISMAT BIN ABDUL RAUF (IC No.: 580419-06-5203)

KOH KOK CHONG (IC No.: 621030-10-6669)

GEA SEOK ENG (IC No.: 490628-08-5260)

THANGAMUTHU A/L KARUPPIAH (IC No.: 570802-10-6259)

GOH HWAN HUA …DEFENDANTS (IC No.: 660901-01-5175)

I-SERVE ONLINE MALL SDN BHD (Company No.: 1096985-X)

BRIGHT MOON VENTURE PLT (Registration No.: LLP0022149-LGN)

QA SMART PARTNERSHIP PLT (Registration No.: LLP0020886-LGN)

TRILLION COVE HOLDINGS BERHAD (Company No.: 1386271-T)

Trial was conducted from 14-10-2024 to 23-10-2024.

The fifteen plaintiffs called 4 witnesses, namely: i. P13/Koh Kok Chong – PW1; ii. P2/Prema A/P Achu – PW2; iii. P7/Gea Ban Thong – PW3; and iv. P5/Goh Chiang Beng – PW4.

By a consent order dated 21-10-2024 [B 14], counsel for the plaintiffs and defendants have sensibly and graciously agreed that the testimonies of these 4 witnesses will apply in the following manner-i. The 13th plaintiff’s/PW1’s testimony will bind and serve as the evidence of the 10th, 11th, 12th, 14th and 15th plaintiffs; ii. The 2nd plaintiff’s/PW2’s testimony will bind and serve as the evidence of the 1st, 3rd and 4th plaintiffs; iii. The 5th plaintiff’s/PW4’s testimony will bind and serve as the evidence of the 6th, 8th and 9th plaintiffs; and iv. The testimony of the 7th plaintiff/PW3 stand independent in so far as that evidence pertains to the 7th plaintiff’s pleaded contractual arrangements with the defendants.

After PW4 testified on 23-10-2024, the plaintiffs closed their case.

On 13-11-2024, all the defendants except for the 5th defendant [in liquidation] elected to submit ‘no case to answer' and informed the court they would not be calling any witnesses.

The 5th defendant [in liquidation] had been wound up by the court and the Official Receiver appointed as the Liquidator. The plaintiffs had obtained leave to pursue the action against the 5th defendant [in liquidation]. However, the Official Receiver did not participate in the trial. [See Enclosure 289 D1 WS paragraphs 34 - 35].

Written Submissions and reply Written Submissions were filed by all parties except the the 5th defendant [in liquidation]. Oral submissions were held on 03-04-2025 and then on 09-09-2025. The long gap is due, inter-alia, to the involvement of many counsel and the difficulty in getting a common free date.

These then are my Grounds of Judgment. Background facts

The fifteen plaintiffs in the order of the plaintiffs set out in the Amended Writ of Summons [Enclosure 129] are- 1) P. Ponnamal A/P Ponniah 2) Prema A/P Achu 3) Deborah Ann Rodrigo 4) Y.M.Che Engku Mahirah Bt Abdullah 5) Goh Chiang Beng 6) Alexander Vincent 7) Gea Ban Thong 8) Ng Guat Tin 9) Koh Kock Keang 10) Supramaniam A/L S Shanmugam 11) Harith Bin Abdul Hamid 12) Ismat Bin Abdul Rauf 13) Koh Kok Chong 14) Gea Seok Eng 15) Thangamuthu A/L Karuppiah

The 1st defendant, Goh Hwan Hua (“Goh”) is an individual and citizen of Malaysia. He holds a managerial position in the 2nd defendant. He is a director of the 4th defendant. He is also the CEO and director of the 5th defendant.

The 2nd defendant, I-Serve Online Mall Sdn Bhd (“ISOM”), is a company incorporated under the Companies Act 1965. ISOM specialises in web and app development, online payment and e-commerce solutions.

The 3rd defendant, Bright Moon Venture PLT (“BMV”), is a limited liability partnership having its registered address and business address at No 3-3 Jalan USJ 9/5P, Subang Business Centre, 47620 Subang Jaya, Selangor, Malaysia.

The 4th defendant, QA Smart Partnership PLT (“QAS”), is a limited liability partnership having its registered address and business address at Lot 10-2, UOA Business Park, No. 1, Jalan Pengaturcara U1/51A, 40150, Shah Alam Selangor, Malaysia.

The 5th defendant, Trillion Cove Holdings Berhad [in liquidation] (“TCH”), is a company incorporated under the laws of Malaysia. Pleadings filed in 2022

The plaintiffs filed a Statement of Claim in both BM and in English through their solicitors Messrs. Raj & Sach. [See Enclosure 2]. However, when the Statement of Claim was amended, the Amended Statement of Claim was only amended in the BM version. [See Enclosure 130]. The English version was not amended.

Solicitors for all five defendants filed their Amended Defences in both BM and in English. [See Bundle of Pleadings Enclosure 230].

The plaintiffs filed an Amended Reply in one document to all the five defendants’ Amended Defences. [See Enclosure 220]. Pleaded case of the plaintiffs

The pleaded case of the plaintiffs as set out in their Amended Statement of Claim is as follow. The 1st to 4th plaintiffs and 5th defendant/TCH

The 1st to 4th plaintiffs plead that they had entered into Subscription Agreements (“SA”) with the 5th defendant/TCH respectively based on the following terms-i. The 1st plaintiff invested RM 50,000.00 for 12% Annual Return

ii. The 2nd plaintiff invested RM 50,000.00 for 12% Annual Return

iii. The 3rd plaintiff invested RM 100,000.00 for 15.6% Annual Return Rate (Per Annum) with a Monthly Redemption Value of RM 1480. iv. The 4th plaintiff invested RM 1,000,000.00 for 42.36% Annual Return Rate (Per Annum) with a Monthly Redemption Value of

The 1st to 4th plaintiffs plead that there was an oral agreement and/or agreement by conduct with TCH that the Monthly Redemption Value shall be paid to the 1st and [sic. It should be “to”] 4th plaintiffs each month. At all material times, TCH had made prompt and consistent monthly payments of the Monthly Redemption Value as stipulated above.

The 1st to 4th plaintiffs plead that from November 2021 to June 2022, TCH had failed and/or refused and/or neglected to make payment of the Monthly Redemption Value sums to the 1st to 4th plaintiffs.

The 1st to 4th plaintiffs had issued letters of demand dated 20-06- 2022 via their solicitors, Messrs. Raj & Sach, to TCH and ISOM to demand the Monthly Redemption Value arrears and to give notice of TCH and ISOM’s express and/or repudiatory breaches of the SAs. The 5th to 9th plaintiffs and 3rd defendant/BMV

The 5th to 9th plaintiffs plead that BMV and QAS are vehicles created by and/or under the instructions of the 2nd defendant/ISOM and/or the 1st defendant/Goh for the purpose of collecting investments for ISOM and/or Goh.

The 5th to 9th plaintiffs had entered into a Partner’s Financing Agreement (“PFA”) with BMV respectively based on the following terms: i. The 5th plaintiff invested RM 400,000.00 for 3% rate of financing return (per month) with a monthly financing return of RM 12,000. ii. The 6th plaintiff invested RM 300,000.00 for 3% rate of financing return (per month) with a monthly financing return of RM 9000. iii. The 7th plaintiff invested RM 300,000.00 for 2.1% rate of financing return (per month) with a monthly financing return of RM 6300. iv. The 8th plaintiff invested RM 100,000.00 for 2.4% rate of financing return (per month) with a monthly financing return of RM 2400. v. The 9th plaintiff invested RM 200,000.00 for 2.7% rate of financing return (per month) with a monthly financing return of

The 5th to 9th plaintiffs plead that BMV then invested the PFAs sums into ISOM and/or for the purposes of Goh.

At or around September 2021, Ms. Grace Hoh Suit Wan from Soaring Eagles Ventures Sdn Bhd informed the 5th to 9th plaintiffs that the PFAs between BMV and the 5th to 9th plaintiffs were to be novated to QAS.

The 5th to 9th plaintiffs plead that to date QAS has failed to present a copy of the novated agreement for their execution.

The Monthly Financing Return sum was initially paid by BMV directly to the 5th to 9th plaintiffs. However, upon being informed of and accepting BMV’s instructions to have the PFA novated with QAS, the 5th to 9th plaintiffs continued to receive their Monthly Financing Return sum directly from QAS and/or ISOM.

The 5th to 9th plaintiffs plead that from November 2021 to June 2022 respectively, QAS and/or ISOM, has failed and/or refused and/or neglected to make payment of the Monthly Financing Return sum.

The 5th to 9th plaintiffs had sent letters of demand dated 20-06-2022 via their solicitors, Messrs. Raj & Sach, to demand the Monthly Financing Return arrears and to give notice of QAS and ISOM’s express and/or repudiatory breaches of the PFAs.

However, QAS and ISOM had failed and/or refused and/or neglected to make payment of the same. The 10th to 15th plaintiffs and 4th defendant/QAS

The 10th to 15th plaintiffs plead that QAS is a vehicle the purpose of collecting investments for ISOM and/or Goh.

The 10th to 15th plaintiffs had entered into a PFA with QAS respectively based on the following terms: i. The 10th plaintiff invested RM 510,000.00 for 3.6% rate of financing return (per month) with a monthly financing return of RM 18,360. ii. The 10th plaintiff invested RM 500,000.00 for 3.3% rate of financing return (per month) with a monthly financing return of RM 16,500. iii. The 11th plaintiff invested RM 3,000,000.00 for 3.8% rate of financing return (per month) with a monthly financing return of RM 114,000. iv. The 12th plaintiff invested RM 300,000.00 for 2.75% rate of financing return (per month) with a monthly financing return of RM 8250. v. The 13th plaintiff invested RM 500,000.00 for 3% rate of financing return (per month) with a monthly financing return of RM 15,000. vi. The 14th plaintiff invested RM 100,000.00 for 2.4% rate of financing return (per month) with a monthly financing return of RM 2400. vii. The 15th plaintiff invested RM 200,000.00 for 2.3% rate of financing return (per month) with a monthly financing return of RM 4600. viii. The 15th plaintiff invested RM 170,000.00 for 3.1% rate of financing return (per month) with a monthly financing return of

The 10th to 15th plaintiffs plead that QAS then invested the PFAs sums into ISOM and/or for the purposes of Goh.

The 10th to 15th plaintiffs plead that from November 2021 to June 2022 (from December 2021 to June 2022 for the 13th plaintiff), QAS and/or ISOM, has failed, refused and/or neglected to make payment of the Monthly Financing Return sum.

The 10th to 15th plaintiffs had sent letters of demand dated 20-06- 2022 via their solicitors Messrs. Raj & Sach, to demand the Monthly Financing Return arrears and to give notice of QAS and ISOM’s express and/or repudiatory breaches of the PFAs.

However, QAS and ISOM had failed and/or refused and/or neglected to make payment of the same. Plaintiffs became aware of actions taken by Bank Negara Malaysia [“BNM”] against ISOM, QAS, and five other entities, collectively referred to by BNM as the "I-Serve group"

On 15-11-2021, BNM issued a public statement that “on 11-11- 2021 a joint enforcement action was taken against the 2nd Defendant/ISOM and its related affiliates for suspicion of committing various offences, including under the Financial Services Act 2013 (“FSA 2013”) and the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (“AMLA”)”. [emphasis added] [See BNM’s Statement dated 15-11-2021 in Enclosure 233 B1 pages 1279 - 1280].

This enforcement action led to the freezing of bank accounts belonging to the 1st defendant/Goh, ISOM, TCH and QAS.

The 1st defendant/Goh, ISOM, TCH, along with several other related affiliates, initiated a Judicial Review (WA-25-38-01/2022) seeking, among other reliefs, the quashing of the freezing orders imposed on their bank accounts. [See Bundle B1, B2 and B3, pages 1281 - 3061].

The 1st defendant/Goh, ISOM, TCH and QAS along with several other related affiliates further initiated a Judicial Review (WA-25- 372-05/2022) seeking, among other reliefs, the quashing of the seizing orders imposed on their bank accounts. [See Bundle B3, B4 and B5, pages 3062 - 5116]. Payment of compound of RM50 million imposed by BNM for accepting deposits without a license under section 137(1) of the

On 01-09-2023, BNM issued a further public statement that “on 19- 10-2022 BNM imposed a total compound of RM50 million on” ISOM/2nd defendant, QAS/4th defendant and five other entities, collectively the "I-Serve group “for accepting deposits without a license under section 137(1) of the FSA 2013 and money laundering under section 4(1) of the AMLA 2001” and that “On 16- 11-2022, the entities paid the total amount of compound of RM 50 million imposed by BNM.” [ emphasis added] [See BNM’s Statement dated 01-09-2023 in Enclosure 233 B1 pages 1277-1278]

As a result of this compound fine, the Judicial Review applications were withdrawn by Goh Hwan Hua/1st defendant, ISOM, TCH and QAS. Plaintiffs pleaded that the 3rd to 5th defendants were not licensed to accept deposits from the public for investment purposes

On 01-04-2024, the plaintiffs amended their Writ and Statement of Claim via a court order. The plaintiffs assert that the SAs and PFAs are void ab initio, as TCH, BMV, and QAS were not licensed to accept deposits from the public for investment purposes, thereby violating section 137(1) of the FSA 2013 and section 4(1) of the AMLA 2001. The 2nd to 5th defendants operated as a single economic unit with the 1st defendant being the controlling mind

The plaintiffs pleaded that the 2nd to 5th defendants operated as a single economic unit with the 1st defendant being the controlling mind, and for the breach of the terms of the SAs and PFAs due to the failure to pay the monthly returns. [See Amended Statement of Claim [See Enclosure 130] paragraphs 61 - 67].

In the Amended Statement of Claim, the plaintiffs also pleaded-i. That TCH, BMV and QAS are all agents of ISOM and/or Goh. At all material times, TCH, BMV and QAS had represented and/or presented themselves as having the ostensible authority to collect funds for the purpose of investing in ISOM and/or for the purposes of Goh. [See paragraph 63]; ii. That ISOM and Goh are trustees for TCH, BMV and QAS and had acted in breach of their fiduciary duties and/or in breach of trust. [See paragraph 68]; iii. That ISOM and Goh being fiduciaries of TCH, BMV and QAS at the material time owed a duty under common law, equity and the Companies Act 2016 to among others, act honestly and in good faith to exercise reasonable care, skill and diligence and to act in the best interest of the plaintiffs to ensure TCH, BMV and QAS have a valid licence to take deposits from the public. [See paragraph 71]; and iv. That ISOM and Goh have conspired to perpetrate fraud upon the plaintiffs. [See paragraph 76]. Defence of the 1st defendant/Goh

The 1st defendant/Goh contends in his written submissions Enclosure 289 as follows-i. In the circumstances of the position in law and the evidence adduced by the plaintiffs at trial, the 1“defendant (“D1”) submits “no case to answer”. ii. The plaintiffs’ 3 causes of action cannot be established and/or the evidence led was so unsatisfactory or unreliable that the plaintiffs’ burden of proof has not been discharged. The plaintiffs do not pass the threshold to lift the corporate veil of the 2nd defendant (“ISOM”), the 3rd defendant (“BMV”), the 4th defendant (“QAS”) and the 5th defendant (“TCH”) as none of the exceptions in law to do so were established. iii. The plaintiffs do not pass the threshold to lift the corporate veil of the 2nd defendant (“ISOM”), the 3rd defendant (“BMV”), the 4th defendant (“QAS”) and the 5th defendant (“TCH”) as none of the exceptions in law to do so were established. iv. 1st cause of action - Illegality of Contract. The central allegation that the agreements contravened section 137 (1) of the Financial Services Act 2013 (“FSA”) was entirely without basis and merit. v. 2nd cause of action - Breach of Fiduciary Duties. It is alleged that D1 had a duty to ensure that the plaintiffs received their payment. The allegation was unsubstantiated. It was pleaded that D1 assumed the responsibility to pay the plaintiffs through various notices, instructions and conference calls. However, no evidence of the notices or instructions were produced as evidence. The 3 video recordings of conference calls held by D1 does [sic] prove the alleged assumption of duty by D1. vi. 3rd cause of action - Fraud and Deceit. The alleged representations made by D1 to cause the plaintiffs to continue investing in the entities were not particularised or identified. Defence of the 2nd defendant/ISOM

The 2nd defendant/ISOM contends in its written submissions Enclosure 273 as follows-i. Pursuant to the Agreements, the plaintiffs paid Subscription Fees/Financing Sums to TCH, BMV or QAS. ii. ISOM is not a party to any of these Agreements; and the Subscription Fees/Financing Sums were not made directly to ISOM. iii. ISOM does not owe any fiduciary duties to the plaintiffs and have not breached any alleged fiduciary duties. iv. The plaintiffs’ assertion that ISOM was the ultimate beneficiary of the investments and the controlling mind behind the investments is unproven. The pleaded facts in support of the plaintiffs’ concept of single economic unit are insufficient to enable this Court to disregard the separateness of the defendants’ legal personalities. v. The claim based on conspiracy to defraud is bound to fail, as the plaintiffs have failed to establish the case. Defence of the 3rd defendant/BMV

The 3rd defendant/BMV contends in its written submissions Enclosure 287 as follows-i. Only the 5th to 9th plaintiffs had entered into PFAs with BMV and these PFAs had been novated to QAS. By virtue of this novation, the 5th – 9th plaintiffs ceased to have any contractual relationship with BMV. ii. BMV was never the subject of any investigation by BNM. BMV was also not subject to the Freezing and Seizure Orders referred to by the plaintiffs in their claim. Therefore, the plaintiffs’ plea of illegality against BMV was misconceived. iii. BMV did not operate as a part of a single economic entity alongside the other defendants and there were no circumstances which warranted the lifting of its veil of incorporation to find BMV liable for any loss or damage to the plaintiffs that may have been caused by the other defendants. Defence of the 4th defendant/QAS

The 4th defendant/QAS contends in its written submissions Enclosure 287 as follows-i. The compound issued under section 253 of the FSA and section 92 of the AMLA to inter alia QAS does not constitute a valid finding in law that there was indeed an offence under section 137(1) of the FSA and section 4(1) of the AMLA. ii. The entities including QAS had not been charged nor convicted despite months of investigation by the authorities. It is therefore improper for the Plaintiffs to rely on the payment of compound and the statement by BNM to assert that the entities were guilty or involved in illegal deposit taking activities or accepting deposits without a license or any other offences. iii. That the payment of compound does not constitute an admission of guilt or admission of responsibility for the act or matter complained of. Instead, it amounts to a bar to prosecution for any of the offences compounded and accordingly acts as an acquittal. In these circumstances, there can be no displacement of the presumption of innocence. Therefore, the payment of compound is not a valid ground for raising an inference of guilt against the defendants; iv. QAS did not contravene section 137 of the FSA by entering into the PFAs as QAS did not engage in deposit taking. The financing sums were loans to a partnership by a partner and did not constitute deposit taking as defined in section 137 of the FSA. As such, the PFAs are valid agreements which the QAS Plaintiffs may seek to enforce but have chosen not to in this case. v. QAS not operate as a part of a single economic entity alongside the other defendants and there were no circumstances which warranted the lifting of its veil of incorporation to find QAS liable for any loss or damage to the plaintiffs that may have been caused by the other defendants, which is in any event denied. Defendants except for the 5th defendant elected to submit ‘no case to answer'

As mentioned above, all the defendants except for the 5th defendant [in liquidation] elected to submit ‘no case to answer'. The 5th defendant [in liquidation] did not defend the suit.

In view of the stand taken by the 1st to 4th defendants, I propose to first set out the law on ‘no case to answer' before I apply the law to the facts. Law on ‘no case to answer'

From decided cases, the principles applicable when a defendant submits 'No case to Answer' can be distilled as follows: i. At the close of the plaintiffs' case, a defendant can opt not to call any witness for the defence but instead make a submission of 'No case to answer’; ii. Where the defence submits 'No case to answer', the trial judge must put the defence counsel to his election, namely, that if he elects not call evidence, he would stand or fall on his submissions; iii. The judge should refuse to make a ruling on a submission of 'No case to answer' unless the defence makes it clear that he does not intend to call any witness for the defence; iv. For the purpose of testing whether there is a case to answer, all the evidence given must be presumed to be true. [See Jaafar Shaari & Siti Jama Hashim v Tan Lip Eng & Anor [1997] 1 MLRA 605; [1997] 3 MLJ 693; [1997] 4 CLJ 509; [1997] 4 AMR 3744, CA (“Jaafar Shaari”)]; v. Adverse inference can be drawn against the defendant for failing to call any witnesses should the circumstances appropriately call for such an adverse inference. [See Jaafar Shaari]; and vi. However, even if the plaintiff's evidence is presumed to be true and adverse inference is drawn, the burden of proof at all times is borne by the plaintiff on the balance of probabilities to establish his case against the defendant. It is for the plaintiff to prove his case and satisfy the court that his claim is well-founded before the court can grant judgment on his claim. The fact that the defendant has led no evidence or called no witnesses does not absolve the plaintiff from discharging his burden in law. [See Jaafar Shaari and Syarikat Kemajuan Timbermine Sdn Bhd v Kerajaan Negeri Kelantan Darul Naim [2015] 2 MLRA 205; [2015] 3 MLJ 609; [2015] 2 CLJ 1037; [2015] 2 AMR 124, FC, per Ramly Ali FCJ (“Syarikat Kemajuan Timbermine”)].

The Federal Court in Takako Sakao v Ng Pek Yuen & Anor [2009] 6 MLJ 751, FC [“Takako Sakao”] has given two consequences that follow when a defendant refrained from giving evidence by choosing to elect no case to answer-Acceptance of Facts

The first consequence is the evidence given by the plaintiffs ought to be presumed to be true. If the plaintiffs’ evidence does not appear to be either inherently incredible or inherently improbable, it is the duty of the judge to accept the evidence as true in the absence of any evidence from the defendants going the other way. Drawing an adverse inference

The second consequence is the court is entitled to draw an adverse inference from the absence of testimony from the defendants who might be expected to have material evidence to give on an issue in an action.

In Takako Sakao, this is what Gopal Sri Ram FCJ said- [4]. “In our judgment, two consequences inevitably followed when the first respondent who was fully conversant with the facts studiously refrained from giving evidence. In the first place, the evidence given by the appellant ought to have been presumed to be true. As Elphinstone CJ said in Wasakah Singh v Bachan Singh (1931) 1 MC 125 at p 128: If the party on whom the burden of proof lies gives or calls evidence which, if it is believed, is sufficient to prove his case, then the judge is bound to call upon the other party, and has no power to hold that the first party has failed to prove his case merely because the judge does not believe his evidence. At this stage, the truth or falsity of the evidence is immaterial. For the purpose of testing whether there is a case to answer, all the evidence given must be presumed to be true. Now, what the trial judge did in the present case is precisely what he ought not to have done. He expressed dissatisfaction with the appellant’s evidence without asking himself that most vital question: does the first defendant/respondent have a case to answer? This failure on the part of the trial judge is a serious non-direction amounting to a misdirection which occasioned a miscarriage of justice. The trial judge was at that stage not concerned with his belief of the appellant’s evidence. She had given her explanation as to the discrepancies in the figures. And her evidence does not appear to be either inherently incredible or inherently improbable. In these circumstances it was the duty of the judge to have accepted her evidence as true in the absence of any evidence from the first respondent going the other way. He however failed to direct himself in this fashion thereby occasioning a serious miscarriage of justice. [5] The second consequence is that the court ought to have drawn an adverse inference against the first respondent on the amount of the appellant’s contribution to the purchase price as well as the existence and the terms of the mutual understanding or agreement that she had with the first respondent. Where, as here, the first respondent being a party to the action provides no reasons as to why she did not care to give evidence the court will normally draw an adverse inference. [Emphasis added]

Applying the principles applicable when the defendants submit 'No case to Answer', i.e. For the purpose of testing whether there is a case to answer, all the evidence given by the plaintiffs’ witnesses must be presumed to be true but the burden of proof at all times is borne by the plaintiffs on the balance of probabilities to establish his case against the defendants, can it be said in this case that the plaintiffs have proven they are entitled to the reliefs prayed for in paragraph 77 of the Amended Writ of Summons [Enclosure 129] that, inter-alia,- i. The SAs and PFAs are void ab initio, as TCH, BMV, and QAS were not licensed to accept deposits from the public for investment purposes; and ii. All the defendants form a single economic unit and are jointly or severally responsible to return the Subscription Price and Financing Sums to the plaintiffs in the sums set out.

Based on the plaintiff’s written submission dated 17-01-2025 in Enclosure 270 at paragraphs 17 and 18, the issues for me to decide are-i. Whether the 3rd, 4th and 5th defendants engaged in illegal deposit taking pursuant to section 137 (1) of the FSA 2013; [I note the plaintiffs have not mentioned section 4(1) of the AMLA 2001]. ii. If the answer to (i) is affirmative, whether the SAs and PFAs are invalid, illegal and thus void ab initio; iii. Whether the 2nd, 3rd, 4th and 5th defendants operated as a single economic entity whereby the 1st defendant is the controlling mind of the 2nd, 3rd, 4th and 5th defendants; iv. If the answer to (iii) is affirmative, whether the defendants are jointly and/or severally liable for all the plaintiffs’ subscription/financing sum. v. Whether the 1st and 2nd defendants had conspired to perpetrate fraud upon the plaintiffs. vi. Whether the 1st defendant, TCH, BMV, and QAS misrepresented to the plaintiffs that TCH, BMV, and QAS were authorized to collect deposits from the public for investment purpose in ISOM.

I shall address each issue one by one. Issue [i] - Whether the 3rd, 4th and 5th defendants engaged in illegal deposit taking pursuant to section 137 (1) of the FSA 2013 [I note the plaintiffs have mentioned section 4(1) of the AMLA 2001]. Plaintiffs’ contentions

The plaintiffs contend [in the plaintiff’s written submission dated 17- 01-2025 in Enclosure 270 at paragraphs 22 to 27] that the 3rd ,4th and 5th defendants engaged in illegal deposit taking without a licence in breach of section 137 (1) of the FSA 2013 read with the definition of “deposit” in section 136 FSA 2013. Therefore, the SAs and PFAs ought to be void on 2 grounds – i) There is a breach of section 137(1) FSA 2013; and ii) That the contract itself undermines public policy and the administration of the banking and financial system.

The plaintiffs further contend they are entitled to recover the sums under the SAs and PFAs as they were not aware of the illegality.

The plaintiffs also contend notwithstanding the SAs and PFAs were entered into in breach of section 137(1) FSA 2013, section 270 of the FSA 2013 states that such contracts are not void. The plaintiffs are expressly given the right to claim back their deposits from the 3rd, 4th and 5th defendant. The plaintiffs rely on Sarwan Singh Kundan Singh v Aminah Faudzar [2019] MLJU 1407, HC. [note - this is a striking out case. On appeal by the defendant to the CA, it was allowed on the ground there were triable issues]. 3rd, 4th and 5th defendants’ contentions

The 3rd, 4th and 5th defendants contend in Enclosure 287 dated 18- 01-2025 that they were in a partnership with the plaintiffs under the SAs and PFAs and were not engaged in deposit-taking-

We submit that the BMV and QAS did not engage in deposit-taking given the nature of the relationship between the said entities and the BMV/QAS Plaintiffs.

It is an undisputed fact that BMV and QAS are both limited liability partnerships. The PFAs were agreements by which the BMV and/or QAS Plaintiffs had agreed, as partners, to extend a financing sum to either BMV or QAS to be applied towards the object of the partnership. Court’s analysis

In my respectful view, the plaintiffs had unnecessarily complicated their claim by amending their claim to add a claim that the SAs and PFAs are illegal due to section 137(1) FSA 2013, and then assert that notwithstanding the said illegality, the SAs and PFAs are still valid contracts that they can sue on and recover their monies due to section 270 FSA.

An assertion of illegality is typically run by a defendant to evade liability to a plaintiff. Here it is run by the plaintiffs. Breach of section 137 (1) of the FSA 2013

Be that as it may, to answer issue [i], I am of the view that the 3rd, 4th and 5th defendants had engaged in illegal deposit taking without a licence in breach of section 137 (1) of the FSA 2013 read with the definition of “deposit” in section 136 FSA 2013.

Section 137 (1) of the FSA 2013 reads as follows-

137.(1) No person shall accept deposits except under a licence granted under section 10 regardless of whether the transaction is described as a loan, an advance, an investment, a savings, a sale or a sale and repurchase or by whatever name called.

The term “deposit” for the purpose of section 137(1) FSA 2013 is defined in section 136 FSA 2013 as follows: For the purposes of sections 137 and 138, “deposit” means a sum of money or any precious metal or precious stone, or any article or thing as may be prescribed by the Minister, on the recommendation of the Bank, accepted, paid or delivered on terms under which it will be repaid or returned in full, regardless whether the repayment or return is by way of instalments, with or without interest or any other consideration in money or money’s worth, either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment or delivery and the person accepting it, but excludes money paid bona fide— a) by way of an advance or a part payment under a contract for the sale, hire or other provision of property or services, and is repayable only in the event that the property or services are not in fact sold, hired or otherwise provided; b) by way of security for the performance of a contract or by way of security in respect of any loss which may result from the non-performance of a contract; c) without limiting paragraph (b), by way of security for the delivery up or return of any property, whether in a particular state of repair or otherwise; and d) in such other circumstances, or to or by such other person, as set out in Schedule 2. [Emphasis added]

It is an undisputed fact that the 3rd, 4th and 5th defendants had no licence granted under section 10 FSA. It is also clear from the terms of the SAs and PFAs that the 3rd, 4th and 5th defendants had accepted deposits from the plaintiffs as monies had been paid to the 3rd, 4th and 5th defendant, the monies deposited would be repaid with interest or at a premium and the monies would be repaid as set out in the Redemption Clause 5 of the SAs and in the Repayment Clause 4 of the PFAs.

In respect of the contention of the 3rd, 4th and 5th defendants that they were in a partnership with the plaintiffs under the SAs and PFAs and were not engaged in deposit-taking, I reject this contention.

Section 137 (1) of the FSA 2013 makes it clear that no person shall accept deposits except under a licence regardless of whether the transaction is described as a loan, an advance, an investment, a savings, a sale or a sale and repurchase or by whatever name called. Section 136 FSA 2013 defines the term ‘deposits’ broad enough to include the acts of the 3rd, 4th and 5th defendants under the SAs and PFAs. Payment of compound of RM50 million imposed by BNM for accepting deposits without a license under section 137(1) of the

On 15-11-2021, BNM issued a public statement that “on 11-11- 2021 a joint enforcement action was taken against the 2nd Defendant/ ISOM and its related affiliates for suspicion of committing various offences, including under the Financial Services Act 2013 (“FSA 2013”) and the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (“AMLA”)”. [See BNM’s Statement dated 15-11-2021 in Enclosure 233 B1 page 1279 - 1280]. [emphasis added]

On 01-09-2023, BNM had issued a further public statement that “on 19-10-2022 BNM imposed a total compound of RM50 million on” ISOM/2nd defendant, QAS/4th defendant and five other entities, collectively the "I-Serve group “for accepting deposits without a license under section 137(1) of the FSA 2013 and money laundering under section 4(1) of the AMLA 2001” and that “On 16- 11-2022, the entities paid the total amount of compound of RM 50 million imposed by BNM.” [See BNM’s Statement dated 01-09-2023 in enclosure 233 B1 page 1277 - 1278] [emphasis added]

The plaintiffs rely on these two public statements of BNM and the payment of the compound of RM 50 million to show that the 3rd, 4th and 5th defendants had engaged in illegal deposit taking without a licence in breach of section 137 (1) of the FSA 2013.

The defendants disagree but they had opted for “No case to answer”. Under a case of “No case to answer”, for the purpose of testing whether there is a case to answer, all the evidence given by the plaintiff’s witnesses must be presumed to be true.

This includes the two public statements of BNM which clearly stated that the payment of RM 50 million compound fine was “for accepting deposits without a license under section 137(1) of the FSA 2013 and money laundering under section 4(1) of the AMLA 2001”.

The failure of the defendants to call evidence to rebut, in particular these two public statements of BNM, means the plaintiffs have proven their assertion that the 3rd, 4th and 5th defendants had engaged in illegal deposit taking without a licence in breach of section 137 (1) of the FSA 2013. [See Jaafar Shaari and Syarikat Kemajuan Timbermine].

I now consider the plaintiffs’ contention that notwithstanding the fact that the SAs and PFAs were entered into in breach of section 137(1) FSA 2013, section 270 of the FSA states that such contracts are not void.

In my view, notwithstanding the fact that the SAs and PFAs were entered into in breach of section 137(1) FSA 2013, section 270 of the FSA 2013 states that such contracts are not void.

Section 270 of the FSA reads as follows-

Except as otherwise provided in this Act, or in pursuance of any provision of this Act, no contract, agreement or arrangement, entered into in breach or contravention of any provision of this Act shall be void solely by reason of such breach or contravention: Provided that nothing contained in this section shall affect any liability of any person for any administrative, civil or criminal actions under this Act in respect of such breach or contravention. [Emphasis added]

In conclusion, to answer issue [i] I am of the view that the 3rd,4th and 5th defendants had engaged in deposit taking without a licence in breach of section 137 (1) of the FSA 2013.

I also hold that notwithstanding the SAs and PFAs were entered into in breach of section 137(1) FSA 2013, section 270 of the FSA 2013 states that such contracts are not void. The plaintiffs can claim back their deposits from the 3rd,4th and 5th defendants. Issue [ii] - If the answer to (i) is affirmative, whether the SAs and PFAs are invalid, illegal and thus void ab initio

For the reasons I have set out above, I hold that notwithstanding the SAs and PFAs were entered into in breach of section 137(1) FSA 2013, section 270 of the FSA 2013 states that such contracts are not void. The plaintiffs can claim back their deposits from the 3rd,4th and 5th defendants.

The 1st defendant also agrees that section 270 of the FSA 2013 prevents the SAs and PFAs from being struck down for illegality for breach of section 137(1) FSA 2013 as section 270 of the FSA 2013 excludes the operation of section 24 Contracts Act 1950.

The 1st defendant submits in Enclosure 289 WS at [52]–

Section 270 FSA excludes the operation of section 24 Contracts Act 1950. This was explained by Justice Ong Chee Kwan in LDP Promotion Fair Sdn Bhd v Chubb Insurance Malaysia Bhd [2023] MLJU 2444 HC … “It is well settled that at Common Law, a contract or transaction in breach of a statutory prohibition and an associated contract is, in general, void for illegality even though the statute is silent as to its consequences and merely inflicts a penalty on the wrongdoers (See Menaka v Lum Kum Chum (ibid), at p 94, Phoenix General Insurance Co of Greece SA v Administratia Asigurarilor de Stat (ibid)) M this is subject only to any contrary intention manifested by the statute (see Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (ibid))’. [85] Therefore, in our present case, Section 270 of the FSA 2013 clearly excludes the operation of section 24 of the Contracts Act 1950 from invalidating the contract entered into by the licensed insurer in contravention of Section 84 of the FSA. The said provision expressly protects the contract for the holding over cover between the Respondent and the Appellant in this case from being rendered void notwithstanding that the Respondent had agreed to assume risks even though no premium had been paid.” [Emphasis added]

I now consider issues [iii] to [vi] together as they are related. Issue [iii] - Whether the 2nd, 3rd, 4th and 5th defendants operated as a single economic entity whereby the 1st defendant is the controlling mind of the 2nd, 3rd, 4th and 5th defendants Issue [iv] - If the answer to (iii) is affirmative, whether the defendants are jointly and/or severally liable for all the plaintiffs’ subscription/financing sum Issue [v] - Whether the 1st and 2nd defendants had conspired to perpetrate fraud upon the plaintiffs Issue [vi] Whether the 1st defendant, TCH, BMV, and QAS misrepresented to the plaintiffs that TCH, BMV, and QAS were authorized to collect deposits from the public for investment purpose in ISOM Plaintiffs’ contentions The 1st to 4th plaintiffs and 5th defendant/TCH

PW2 who is the 2nd plaintiff testified for herself and the 1st to 4th plaintiffs who had entered into SAs with the 5th defendant/TCH. The 5th to 9th plaintiffs and 3rd defendant/BMV

PW3 and PW4 who are the 7th and 5th plaintiff respectively testified for themselves and the 5th to 9th plaintiffs who had entered into PFAs with BMV. The 10th to 15th plaintiffs and the 4th defendant/QAS

PW1 who is the 13th plaintiff testified for himself and the 10th to 15th plaintiffs who had entered into PFAs with QAS.

PW1 in his witness statement Enclosure 246 testified that funds deposited into the 3rd to 5th defendants were all invested in the 2nd defendant in one way or another and that the defendants were acting as a single economic unit. [See Q and A 3].

He also testified the 1st defendant was the controlling mind of the 2nd to 5th defendants. [See Q and A 6].

He also testified that the 1st and 2nd defendants had committed fraud. His basis was because despite having full knowledge that the 3rd to 5th defendants had no valid licences to accept deposits from the plaintiffs and having full knowledge of the RM 50 million compound imposed on seven I-Serve related entities for illegal deposit taking, the 1st defendant made assurances to the plaintiffs and other subscribers and/or investors to continue investing. [See Q and A 6].

PW2 to PW4 in their witness statements Enclosures 258, 256 and 257 respectively testified along the same lines as PW1. They made the same allegations as PW1.

The defendants did not call any witness to present a defence. Acting as a single economic unit/lifting corporate veil The law

The Federal Court in Ong Leong Chiou & Anor v Keller (M) Sdn Bhd & Or [2021] 4 MLRA 211 FC; [2021] 3 MLJ 622, FC [“Ong Leong Chiou”] said- [43] Lord Sumption, while embracing the juridical basis for, and the concept of a separate legal personality, accepted that the strict confines of the corporate personality "will not necessarily apply" if the dealings of persons natural or artificial are not honest or if the corporate personality is abused (see p 18) He reiterated and affirmed Denning LJ's famous statement in Lazarus Estates v. Beasley [1956] 1 All ER 341 ('Lazarus v. Beasley') at 345: "...No court in this land will allow a person to keep an advantage which he has obtained by fraud. No judgment of a court, no order of a Minister can be allowed to stand if it has been obtained by fraud. Fraud unravels everything. The court is careful not to find fraud unless it is distinctly pleaded and proved; but once it is proved, it vitiates judgments, contracts and all transactions whatsoever..." … [91] As is the case in the United Kingdom, it is an accepted position in law in Malaysia that the court will lift the corporate veil if a company was set up for fraudulent purposes. The ‘fraud unravels all’ principle expounded in Lazarus v Beasley is applied… … [93] And in Takako Sakao (f) v Ng Pek Yuan (f) & Anor [2009] 6 MLJ 751; [2010] 1 CLJ 381 the court speaking through Gopal Sri Ram JCA held that a litigant who seeks the court’s intervention to pierce the corporate veil must establish special circumstances showing that the company in question is a mere facade concealing the true facts. [ emphasis added]

In Law Kam Loy And Anor v Boltex Sdn Bhd And Others [2005] MLJU 225, CA, the Court of Appeal also said – In Sunrise Sdn Bhd v First Profile (M) Sdn Bhd [1996] 3 MLJ 533. Chong Siew Fai (CJ, Sabah & Sarawak) said that in - "cases where there are signs of separate personalities of companies being used to enable persons to evade their contractual obligations or duties, the court would disregard the notional separateness of the companies." [emphasis added] Application to facts Funds deposited into the 3rd to 5th defendants were moved to the 2nd defendant

PW1 to PW4 testified that funds deposited into the 3rd to 5th defendants were all invested in the 2nd defendant in one way or another and that the defendants were acting as a single economic unit.

I agree. From the Bank Account Statements of the defendants which were obtained pursuant to a discovery order dated 12-08- 2024, it is evident that there was commingling of funds by and among the defendants. In particular, funds deposited by the plaintiffs with the 3rd to 5th defendants under the SAs and PFAs were ‘moved’ to the 2nd defendant. The evidence in support can be seen from – i. The transfer of huge sums of monies from the 5th defendant to the 2nd defendant. [See B 6 CBOD II Vol 1 at page 1 [RM 2 million and RM 587,000] , page 22 [RM1,077,000], page 24 [RM 2,895,000], page 43 [RM 972,000], page 71 [RM 3,006,000], page 75 [RM 2,530,000], page 159 [RM 1,000,000 and RM 784,000], page 164 [RM 795,000 and RM 1,000,000], page 168 [RM 256,000 and RM 1,000,000], page 184 [RM 3,518,000], page 190 [RM 843,000], page 191 [RM 1,000,000], page 193 [RM 4,105,000], page 195 [RM 1,969,00], page 201 [RM 2,416,000], page 207 [RM 616,000], page 210 [RM 1,550,000], page 213 [RM 1,700,000], page 226 [RM 984,000], page 229 [RM 151,000], page 230 [RM 1,000,000], page 233 [RM 900,000], page 234 [RM 1,470,000], page 240 [RM 1,129,000], page 245 [RM 1,309,000], page 265 [RM 600,000]; and B7 CBOD II Vol 2 page 967 [RM 50,000] and page 969 [RM 860,000]. Huge sums of monies were moved from the 4th defendant to QA Advance Partnership PLT (shareholder of the 2nd defendant) and then moved to the 2nd defendant ii. Huge sums of monies were moved from the 4th defendant to QA Advance Partnership PLT (shareholder of the 2nd defendant). [See B 8 CBOD II Vol 3 at page 1559 [RM 7 million], page 1636 [RM 6 million], page 1637[RM 4 million], page 1640 [RM 8 million], page 1647 [RM 6 million], page 1656 [RM 4,290,435], page 1826 [RM 1 million], page 1850 [RM 5 million], page 1957 [RM 904,280, RM 1,118,115, RM 3.3 million], page 1958 [RM 300,000], page 1964 [RM 600,000], page 2038 [RM 1,780,000], page 2050 [RM 3,320,000], page 2065 [RM 2.5 million], page 2080 [RM 4 million], page 2132 [RM 2.1 million], page 2139 [RM 208,000, RM 516,500, RM 945,510, RM 976,190], page 2140 [RM 1.5 million], page 2144 [RM 1 million], page 2145 [RM 1.4 million], page 2146 [RM 400,000], page 2148 [RM 6,726,000] and page 2149 [RM 800,000]. iii. Huge sums of monies were moved from QA Advance Partnership PLT (shareholder of the 2nd Defendant) to the 2nd defendant. [See B 6 CBOD II Vol 1 page 6 [RM 3,062,000], page 30 [RM 5,882,000], page 38 [RM 2 million], page 43 [RM 3 million], page 170 [RM 3,358,000], page 175 [RM 1,744,000], page 182 [RM 838,000], page 192 [RM 719,000], page 198 [RM 1,229,000], page 201 [RM 280,000], page 207 [RM 200,000] and page 247 [RM 400,000].

Funds were also moved from the 2nd defendant to the 1st defendant. [See B 6 CBOD II Volume 1 at page 44, 45, 105, 120, 121, 130, 134 RM 143,000, 196, 214, 263; and B8 CBOD II Volume 3 at page 1384 RM 22,596 and 1452 RM 12,000]

The defendants had invoked “No case to Answer”. In such circumstances, the Federal Court in Takako Sakao had said “[the plaintiff’s evidence] does not appear to be either inherently incredible or inherently improbable. In these circumstances it was the duty of the judge to … accept the evidence as true in the absence of any evidence from the [defendants] going the other way”.

The defendants had failed to lead evidence to show these transfers of monies from the 3rd, 4th and 5th defendants to the 2nd defendant were for valid purposes. Therefore, I hold that the plaintiffs have proven on a balance of probabilities that the plaintiffs’ funds deposited into the 3rd to 5th defendants were all moved to the 2nd defendant in one way or another for wrongful purposes, that there was commingling of funds by and among the defendants and that the defendants were acting as a single economic unit. All these justify lifting the corporate veils to make all the defendants jointly and/or severally liable for all the plaintiffs’ subscription/financing sums.

In Gurbachan Singh s/o Bagawan Singh & Ors v Vellasamy s/o Pennusamy & Ors and other appeals [2015] 1 MLJ 773, FC, the Federal Court said- [96] But in the event that we should, we are of the view that it is now a settled law in Malaysia that the court would lift the corporate veil of a corporation if such corporation was set up for fraudulent purposes, or where it was established to avoid an existing obligation or even to prevent the abuse of a corporate legal personality (see Prest v Petrodel Resources Limited and others [2013] UKSC 34). [97] As to what constitutes fraudulent purposes it has been described as to include actual fraud or fraud in equity (see Law Kam Loy & Anor v Boltex Sdn Bhd and others). And fraud in equity occurred in ‘... cases where there are signs of separate personalities of companies being used to enable persons to evade their contractual obligations or duties, the court would disregard the notional separateness of the companies ...’ (see Sunrise Sdn Bhd v First Profile (M) Sdn Bhd & Anor [1996] 3 MLJ 533 per Chong Siew Fai FCJ (as he then was)). [Emphasis added] 1st defendant was the controlling mind of the 2nd to 5th defendants. 1st defendant made assurances to the plaintiffs to continue investing

PW1 to PW4 testified that the 1st defendant was the controlling mind of the 2nd to 5th defendants. They also testified that the 1st and 2nd defendants had committed fraud. Their basis was because despite having full knowledge that the 3rd to 5th defendants had no valid licences to accept deposits from the Plaintiffs and having full knowledge of the RM 50 million compound imposed on the seven I-Serve related entities for illegal deposit taking, the 1st defendant made assurances to the plaintiffs and other subscribers and/or investors to continue investing. They referred to the following evidence in support– (See page 25, Bundle B 11, line 10 - 20 webinar on 16-11-2021 by 1st defendant) GRACE: Is ADV & TCH affected by this raid? ALLAN GOH: Okay surprisingly under the RPS which is you know the two companies will launch under the RPS, under CMSA will also affected. Yeah, so that's why our legal team is working very hard uh to, to find a solution to this. In our opinion, of course they, they have the rights to do it but we feel that in everything is in our opinion is legit. You have a business; you have licenses and we follow SOP on all the guidelines. So, we don't know why this thing happens, yeah. Well, we will try our best or do our best to make sure that this is over. I think we may have a good chance. (See page 10 - 11, Bundle B11, line 28 - 29 (page 10), line 1 - 14 (page 11)) ALLAN GOH: So, it is very important at this juncture to make sure that the business mustn’t stop, yeah. If it stops then the whole thing will collapse. Of course, the naysayers would want us to go down. So, we yeah as part of this we have to make sure that we stick together, we unite together. And I know some of you are getting impatient. I think I am because I don’t even have money to eat literally, okay. So, we have to stick together. And you just got to be patient a little bit, it only takes one of you to break and the whole thing is gone. Just like one of those LLPs and subscriber, people asking why. Why are you not taking any action? You say look yeah, I would like to but if I do it I think at the end of the day I don’t get anything at all and I'm bringing everyone down with my action. (See page 18 - 19, Bundle B11, line 18 - 25 webinar on 05-12- 2021 by 1st defendant)) GRACE: Okay, thank you very much Dato’ for your updates, may God bless you with good health and strength to overcome the challenge. We are all in support of you and we pray, I-Serve will come out strong and unscratched. And to all our subscribers thank you for your time, your patience and your understanding in this matter. We will meet again next Sunday for further updates. DATO ALLAN GOH: Grace one second yeah. All businesses that needs license, we have license, yeah. So, don't worry. We don't do anything that is without license, okay thank you very much guys. [Emphasis added]

During the trial, the defendants including the 1st defendant - by electing to submit no case to answer - chose not to rebut the plaintiffs’ testimonies that the 1st defendant: i. made representations for ISOM, TCH, QAS and BMV and all other entities that were jointly investigated by Bank Negara Malaysia in November 2021; and ii. represented in the webinars that the businesses (TCH, BMV and QAS) were duly licensed to conduct these business activities including the deposits taken from the plaintiffs.

These testimonies of the plaintiffs are not rebutted by the defendants including the 1st defendant as they had all invoked “No case to Answer”. In such circumstances, the Federal Court in Takako Sakao had said “[the plaintiff’s evidence] does not appear to be either inherently incredible or inherently improbable. In these circumstances it was the duty of the judge to … accept the evidence as true in the absence of any evidence from the [defendants] going the other way”. Misrepresentations and withholding critical information

The 1st defendant continued to make misrepresentations to the plaintiffs that all operations were legitimate and in compliance with the law. On 16-11-2022, the 1st defendant conducted a webinar, on the very same day that seven entities within the I-Serve Group paid a compound of RM 50 million for violations, including accepting deposits without a license under section 137(1) of the FSA 2013 and section 4(1) of AMLA 2001.

During this webinar, the 1st defendant failed to disclose the payment of the RM 50 million compound issued by BNM for illegal deposit-taking activities. It is also conceivable that the RM 50 million compound fine was paid out of the monies invested by the plaintiffs and other subscribers.

I also note that the Affidavits in Support for the 1st and 2nd Judicial Review were sworn by the 1st defendant representing/on behalf of the 2nd, 4th and 5th defendants. [See Judicial Review cause papers for Judicial Review Application No: WA-25-372-05/2022 (Judicial Review 2) at Volume 3 - Volume 5 CBOD 1 at page 3062 - 5092. See Judicial Review 2 Fair Order at Volume 5 CBOD 1 at page 5093 - 5115].

Therefore, I hold that the plaintiffs have proven on a balance of probabilities that the 1st defendant is the controlling mind of the 2nd to 5th defendants, the 1st and 2nd defendants had conspired to perpetrate fraud upon the plaintiffs and the 1st defendant, TCH, BMV, and QAS misrepresented to the plaintiffs that TCH, BMV, and QAS were authorized to collect deposits from the public for investment purpose in ISOM.

The Federal Court in Ong Leong Chiou has said- “[115] ...A finding that Tony Ong utilised and operated Perfect Solution and PS Bina interchangeably does not in itself warrant the application of the ‘single economic unit’ test. There is a distinction between utilising the single economic unit test to conclude that the corporate veil ought to be disregarded, and making a finding that two companies operate as if they were a single economic unit, and then utilising this finding for the purposes of establishing fraud. It is the latter that prevailed in this case. So, it is incorrect to suggest that the corporate veil in the instant appeal was pierced simply on the basis that PS Bina and Perfect Solution operated as a single economic unit. [emphasis added]

Similarly, in the case before me, it is the latter that prevails. Fraud is established by the plaintiffs.

In conclusion, this is a suitable case to lift the corporate veils to make all the defendants jointly and/or severally liable for all the plaintiffs’ subscription/financing sums.

I grant order in terms of the Amended Statement of Claim [Enclosure 130] paragraph 77 [b] to [d] and fix costs at RM 100,000 to be paid by the 1st to 4th defendants jointly and severally to the plaintiffs subject to allocatur. Dated: 09th September 2025 ………….(signed)……………. Leong Wai Hong Judge High Court of Malaya Kuala Lumpur (NCC 6) Counsel for plaintiff: Amanda Sonia Mathew, Rajesh Nagarajan, Sach Preet Raj Singh Sohanpal and Jusstina Xaviaer. Raj & Sach (Petaling Jaya) Counsel for 1st defendant: Tina Francis and Reuben Choong. Mathews Hun Lachimanan (Kuala Lumpur) Counsel for 2nd defendant: Chetan Jethwani and Ava Geh. Chetan Jethwani & Company (Kuala Lumpur) Counsel for 3rd and 4th defendants: Varunnath Viswanathan. KP Lu & Tan (Shah Alam) CASES REFERRED TO: 1) Gurbachan Singh s/o Bagawan Singh & Ors v Vellasamy s/o Pennusamy & Ors and other appeals [2015] 1 MLJ 773, FC. 2) Jaafar Shaari and Syarikat Kemajuan Timbermine Sdn Bhd v Kerajaan Negeri Kelantan Darul Naim [2015] 2 MLRA 205; [2015] 3 MLJ 609; [2015] 2 CLJ 1037; [2015] 2 AMR 124, FC. 3) Law Kam Loy And Anor v Boltex Sdn Bhd And Others [2005] MLJU 225, CA. 4) Lazarus v Beasley [1956] 1 All ER 341. 5) LDP Promotion Fair Sdn Bhd v Chubb Insurance Malaysia Bhd [2023] MLJU 2444, HC. 6) Ong Leong Chiou & Anor v Keller (M) Sdn Bhd & Ors [2021] 4 MLRA 211; [2021] 3 MLJ 622, FC. 7) Prest v Petrodel Resources Limited and others [2013] UKSC 34. 8) Sarwan Singh Kundan Singh v Aminah Faudzar [2019] MLJU 1407, HC. 9) Sunrise Sdn Bhd v First Profile (M) Sdn Bhd [1996] 3 MLJ 533, FC. 10) Takako Sakao v Ng Pek Yuen & Anor [2009] 6 MLJ 751, FC. 11) Wasakah Singh v Bachan Singh (1931) 1 MC 125. LEGISLATION REFERRED TO: 1) Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 section 4(1), section 92. 2) Contract Act 1950 section 24. 3) Financial Services Act 2013 section 10, section 84, section 136, section 137(1), section 138, section 253, section 270.