that the respondent committed criminal breach of trust in entering into and/or carrying out the Contra Arrangement. [10] The main defence raised by the respondent was that he was not entrusted with, nor did he dishonestly misappropriate, the Monies. [11] At the end of the prosecution case, the SCJ acquitted and discharged the respondent. The appellant appealed against the decision of the SCJ. C. The Elements Of The Offence Of Criminal Breach Of Trust [12] The charge against the respondent is framed under section 409 of the Penal Code. Section 409 reads: Whoever, being in any manner entrusted with property, or with any dominion over property, in his capacity of a public servant or an agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for a term which shall not be less than two years and not more than twenty years and with whipping, and shall also be liable to fine. (emphasis added) [13] The elements constituting criminal breach of trust are elaborated in section 405 of the Penal Code, which provides: 5 entrusted with property, or with any dominion over property either solely or jointly with any other person dishonestly misappropriates, or converts to his own use, that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits criminal breach of trust (emphasis added) [14] In Sathiadas v PP [1970] 2 MLJ 241, the ingredients of the offence of criminal breach of trust were examined. It was held that: entrustment and dishonest misappropriation or conversion to own use. Once the prosecution have succeeded in proving the receipt of the money for a particular purpose the case of entrustment is made out. Dishonest misappropriation or conversion to own use involves wrongful gain to the appellant or wrongful loss to his employers for the period of the retention of the money (emphasis added) [15] From the provisions of sections 405 and 409 of the Penal Code and applying Sathiadas, to prove the offence of criminal breach of trust under section 409 of the Penal Code, the prosecution must show that the respondent: 6 a. Was entrusted with the Monies as an agent; and b. Dishonestly misappropriated or converted the Monies to his own use, or dishonestly used or disposed of the Monies. [16] Accordingly, I considered whether these elements were established, and whether the SCJ had erred in acquitting and discharging [17] prosecution has adduced credible evidence on each essential element of the offence which, if unrebutted, would warrant a conviction. D. Considerations and Findings First element: Entrustment [18] It is not in dispute that the respondent was a director of SCG from 2008 to 2018. On this basis, I am of the view that the SCJ was correct in finding that the respondent was an agent of SCG. [19] The appellant referred to Aisyah Mohd Rose v PP [2016] 1 CLJ 529, which examined the question of entrustment under section 409 of the Penal Code. The 1st appellant argued that she was not entrusted with the cheques that were the subject matter of the charge of criminal breach of trust against her. The cheques, issued for payment of customs duties, were not handed over to the 1st appellant by the companies that issued 7 those cheques. Instead, they were handed to her by intermediaries authorised by the companies. [20] The Court of Appeal held that the element of entrustment had been met, as the words in section 409 are sufficiently wide to cover property being entrusted indirectly. The 1st appellant was the head of the customer service centre of Bank Muamalat, Universiti Sains Malaysia. Although she did not receive the cheques directly from the companies, the court held that the cheques had been entrusted to her to deal with in accordance with their purpose, namely for payment to customs. [21] In the present case, I find that the respondent was entrusted with the Monies. It is not disputed that he was a director of SCG at the material time. This notwithstanding, entrustment must relate to identifiable director of SCG. [22] The evidence before the court shows that the respondent managed the day-to-day operations of SCG. It follows that he would have including the Monies which arose from the sale of aluminium to Seng Hiap, and the Monies would have been under his control for and on behalf of SCG. However, the physical receipt of the Monies was substituted by the Contra Arrangement, involving a set-off of mutual obligations rather than the actual receipt of funds. [23] In the circumstances, the element of entrustment has been made out. Second element: Dishonest misappropriation [24] The main issue in dispute is whether there was dishonest misappropriation of the Monies by the respondent. For the three reasons set out below, I find that the prosecution failed to establish the element of misappropriation or conversion of the Monies, or the dishonest use or disposal of the Monies. [25] First, the fact that there was no of SCG on the Contra Arrangement, does not conclusively prove that the respondent had misappropriated the Monies. The evidence before the court shows that SCG was run as a family business. Based on the evidence given by the company documents of SCG, including its memorandum and articles of association and standard operating procedures, do not contain any requirement for SCG of an arrangement such as the Contra Arrangement. [26] was corroborated by SP4, who confirmed that it is not common practice for SCG to pass s for the purpose of the movement of monies in and out of the company, such as by way of the Contra Arrangement. When re-examined on the issue of monies advanced by the respondent to SCG, SP2 testified as follows: Puan setuju dengan saya, duit yang Mr. Tan Hock Chuan pump into the company untuk bantu cash flow adalah tergolong di bawah kategori amount owing to directors? Setuju 13. Oleh itu, that's why when we read paragraph 14, it is repayable. Perlulah dibayar balik kepada director bila-bila masa dia nak minta? Betul 14. Puan setuju dengan saya, oleh kerana ini adalah the practice of the company. We are talking about the practice of the company. Dia tidak memerlukan sebarang resolusi pengarah bila dia demand balik duit dia. You don't need the resolution because it's not their practice to have a resolution? Yes 15. In fact, puan boleh setuju dengan saya bila Encik Tan Seng Huat, we are talking about Michael Tan bila dia ambil duit daripada company pun tak ada director resolution? Tiada 16. Ini adalah kerana Crystal Group adalah perniagaan keluarga, kesemua pengarah adalah ahli keluarga? Ya (emphasis added) [27] resolutions for payments in and out of the company. The Contra Arrangement is one such arrangement, as it involves the settlement of monies due from Seng Hiap to SCG. In the premises, the absence of a dishonest misappropriation. [28] Second, the evidence before the court shows that the respondent had acted openly and transparently in relation to the Contra Arrangement. SP4 testified that: a. She was informed by the respondent from the very beginning that he would be holding the Property on behalf of SCG; b. The respondent had instructed her to include the Property as an asset of SCG in its 2018 financial statements; and c. All directors of SCG had signed off and approved 2018 financial statements, which listed the Property as an asset of SCG. [29] The as demonstrated above, is fundamentally inconsistent with an intention to misappropriate, which ordinarily involves concealment or deceit.