Suruhanjaya Sekuriti Malaysia v WONG SHEE KAI (WA-22NCC-171-05/2020)

High Court of Malaysia28 Apr 2022

The written judgment as the court issued it, with the coram, case number, and source links. Every paragraph has its own anchor.

Outcome

What the court ordered

(together, “Setting Aside Applications”). The inter partes hearing of the SC's Injunction Application and the Defendants' Setting Aside Applications was fixed on 15.7.2020. THE SC'S PLEADED CASE [14] The SC's pleaded case against the Ricky Wong, Madam Teh and Wong SK Holdings is sumamrised as below. [15] The SC claims that Ricky Wong, Madam Teh and Wong SK Holdings have contravened sections 179(a) and/or 179(b) CMSA by using devices, schemes or artifices to defraud BPI and/or engaging in acts, practices or courses of business which operated as a fraud upon BPI. [16] This relates to the BPI Corporate Exercises carried out by BPI - a Rights Issue Exercise, a Private Placement Exercise and ESOS. The SC alleges that the Defendants caused the proceeds raised by BPI from these corporate exercises to be paid out by BPI to purported suppliers of BPI (which were actually nominee companies of the Defendants) based on fictitious transactions. The monies were then channeled to the defendants. [17] In particular, for the Rights Issue, RM35 million out of the RM47.6 million raised was siphoned to Ricky Wong this way. For the Private Placement, the entire RM7.8 million raised was siphoned to Ricky Wong. For the ESOS, RM9.3 million was channeled to Wong SK Holdings while another RM4 million went to Ricky Wong. [18] The SC contends that as a result of these fraudulent schemes, Ricky Wong and/or Madam Teh made an unlawful gain of RM46.8 million while Madam Teh and/or Wong SK Holdings made an unlawful gain of RM9.3 million. BPI had suffered a total loss of RM56 million. [19] The SC is seeking the following key reliefs: a) A declaration that the defendants contravened the CMSA; b) An order for the defendants to pay the SC 3 times the amount of unlawful gains made by them; c) Civil penalties of RM1 million each against the defendants; d) An order to restrain the defendants from dealing with their assets up to up to RM169,223,500 (referred to as “RM169 million” for convenience); and e) An order to bar Ricky Wong and Madam Teh from being directors of public companies. THE APPLICATIONS [20] In the SC's Injunction Application (Enclosure 4) it is seeking an interim worldwide Mareva injunction to restrain the Defendants from disposing of or dealing with their assets up to RM169 million pending determination of the main suit. The SC also seeks for an order for disclosure of the Defendants' assets. [21] The SC's grounds are: a) It appears the Defendants have contravened s.179(a) and/or CMSA by engaging in manipulative and deceptive devices/schemes to defraud BPI in its corporate exercises. b) The Defendants made unlawful pecuniary gains of at least RM56 million from the fraud. c) It is desirable for the court to grant the interim injunction under Section 360(2) CMSA pending the suit to preserve assets and mitigate dissipation risk. d) The trite requirements for a Mareva injunction are met: good arguable case, real risk of dissipation, balance of convenience. [22] In Ricky Wong and Wong SK Holdings' Setting Aside Application (Enclosure 46) they are seeking to set aside the Ex Parte Injunction Order dated 8.5.2020. [23] Their grounds are: a) There is no cause of action under s.179 CMSA as its elements are absent. b) There is bad faith and abuse of process by the SC in commencing this suit after its action under anti-money laundering laws. c) There is delay by the SC in commencing this suit. d) The SC relied on an unaffirmed affidavit for an ex parte injunction. [24] In Madam Teh's Setting Aside Application (Enclosure 39), she is seeking to set aside the Ex Parte Injunction Order dated 8.5.2020. [25] Her grounds are: a) Her personal accounts released by prosecutors were re-frozen, showing bad faith by the SC. b) There is material non-disclosure by the SC in obtaining the ex parte injunction. c) There is no risk of asset dissipation and there is delay by the SC. d) The SC relied on a defective unaffirmed affidavit. EX PARTE INJUNCTION ORDER [26] The Ex Parte Injunction Order is a worldwide Mareva injunction to freeze the Defendants' assets up to RM169 million coupled with disclosure orders, pending the full inter partes hearing of the SC's Injunction Application. It was obtained ex parte by the SC based on its investigations into the Defendants' alleged fraud and breaches of securities laws pertaining to BPI's corporate exercises. [27] The key terms of the Ex Parte Injunction Order are: a) The Defendants are restrained from disposing of or dealing with their assets in and outside Malaysia up to the value of RM169,223,500. This covers monies in specified bank accounts and shares held by Wong SK Holdings in BPI. b) The Defendants must disclose to the SC within 10 days full accounts of the sums collectively received from certain companies pertaining to BPI's Rights Issue (RM35 million), Private Placement (RM7.791 million) and ESOS (RM13,283,500); details of all their assets in and outside Malaysia and discovery of documents evidencing the information. c) The order takes effect pending an inter partes hearing. d) The SC is exempted from the requirement to give an undertaking as to damages for the ex parte order, pursuant to s.360(5) CMSA. SUBMISSIONS The SC’s submissions [28] The SC's submissions in respect of Enclosures 4, 39 and 46 are summarised as follows: a) Enclosure 4, the SC's application for a worldwide Mareva injunction against the Defendants, should be allowed as the statutory requirements under Section 360 CMSA have been met and alternatively, the common law requirements for a Mareva injunction have been satisfied. b) Enclosures 39 and 46, the Defendants’ applications to set aside the ex parte injunction order should be dismissed as: (a) There was no material non-disclosure by the SC in obtaining the ex parte order;
the SC had provided an undertaking to file an affirmed affidavit which was accepted by the court;
There was no delay or bad faith by the SC in commencing the action; (d) The injunction is not undermined by the SC's earlier action under anti-money laundering laws; and (e) In respect of Enclosure 39, release of Madam Teh's accounts under AMLATFPUAA does not preclude a fresh injunction under CMSA. c) The SC has pleaded a good arguable case against each defendant for contravening Section 179 CMSA enabling the SC to seek a freezing injunction. d) Knowledge and intent to defraud can be inferred from each defendant's role in the scheme, with further evidence to be adduced at trial. e) Based on each defendant's conduct and the nature of the scheme itself, there is a real risk of dissipation of assets to frustrate any judgment. f) In respect of Enclosure 4, an undertaking as to damages is not required from the SC under Section 360(5) CMSA and established principles for public authorities enforcing the law. g) In respect of Enclosures 46 and 39, the quantum of the worldwide injunction is justified and not oppressive given the nature of the SC's joint and several claim against all Defendants. Ricky Wong and Wong SK Holdings' submissions [29] Ricky Wong and Wong SK Holdings' submissions in respect of Enclosures 4 and 46 are summarised as follows: a) The SC lacks the statutory power under Section 360 CMSA to obtain freezing injunctions against alleged breaches of Section 179, as Section 179 is a prohibition and not a “relevant requirement” under Section 360(13). b) The SC has failed to establish a good arguable case that they contravened Section 179(a) and (b) CMSA, as the SC's pleadings do not assert they had the requisite knowledge or intent to defraud in relation to the BPI corporate exercises. c) There is an absence of evidence that they derived any unlawful pecuniary gains from the alleged fraudulent schemes related to BP Corporate Exercises. d) The SC has not demonstrated a real risk of them dissipating or improperly dealing with their assets to frustrate any final judgment. e) The freezing limit of RM169 million is oppressive and disproportionate as it exceeds the alleged unlawful gains based on the SC's pleaded case and extends improperly to discretionary penalty elements. [30] Their submissions specific to the setting aside application (Enclosure 46) are: a) The SC failed to make full and frank disclosure by not informing the court that seizure orders over their accounts had already been revoked before obtaining the ex parte injunction. b) The SC acted in bad faith and abused the process by commencing this civil suit after failing to obtain consent from the Public Prosecutor to continue the earlier AMLATFPUAA criminal proceedings against them. c) There was inordinate delay by the SC in filing this suit around 3 years after commencing investigations, causing prejudice by keeping their assets frozen for a prolonged period. d) The Ex Parte Injunction Order should be set aside as the SC improperly relied on an unaffirmed and unsigned affidavit which rendered the proceedings fatally flawed. Madam Teh's submissions [31] Madam Teh's submissions in respect of Enclosures 4 and 39 are summarised as follows: a) The SC lacks statutory power under Section 360 CMSA to obtain a freezing injunction against her for an alleged breach of Section 179, as Section 179 is a prohibition, not a “relevant requirement” covered under Section 360(13) CMSA. b) Even if Section 360 applied, the SC has failed to establish a good arguable case against her under Section 179, as its pleadings do not assert she had knowledge or intent to defraud in relation to her conduct as a signatory for BPI. c) There is a complete absence of evidence that she personally received any pecuniary gains from the alleged fraudulent schemes related to BP Corporate Exercises. d) Her conduct of not transferring funds when her accounts were temporarily unfrozen negates any real risk of her dissipating assets. e) The freezing sum of RM169 million against her is staggeringly excessive and oppressive, as her potential unlawful gain based on her tiny 0.001% shareholding would only amount to around RM543 at most. [32] Her submissions specific to the setting aside application (Enclosure 39) are: a) The SC failed to make full and frank disclosure by not informing the court that seizure orders over her accounts had already been lifted by the Public Prosecutor before obtaining the ex parte injunction. b) The SC acted in bad faith by re-freezing her accounts through this civil suit after they were unconditionally released in the prior AMLATFPUAA criminal proceedings against her. c) The prejudicial delay by the SC in filing this suit years after investigations resulted in her funds remaining frozen for an inordinately long period. d) The Ex Parte Injunction Order should be discharged as the SC improperly relied on an unaffirmed affidavit, rendering the proceedings fatally flawed from the outset. SALIENT STATUTORY PROVISIONS [33] The CMSA is the primary legislation governing Malaysia's capital markets. It provides a comprehensive regulatory framework to promote market integrity and protect investors. Among its key provisions are those that prohibit fraudulent and manipulative conduct in relation to securities, and those that empower the SC to institute civil proceedings against persons who contravene these provisions. [34] Section 179 CMSA is a crucial provision that prohibits the use of manipulative and deceptive devices in connection with the subscription, purchase or sale of securities. It states: “It shall be unlawful for any person, directly or indirectly in connection with the subscription, purchase or sale of any securities-
to use any device, scheme or artifice to defraud;
to engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person; or
to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements, made in the light of the circumstances under which they were made, not misleading.” [35] This wide-reaching anti-fraud provision aims to maintain fair and honest practices in the securities industry by prohibiting conduct that deceives or misleads investors. [36] To enforce Section 179 and other key provisions, the CMSA grants the SC the power under Section 200 to institute civil proceedings against any person who has contravened Part VI of the Act, which includes Section 179. Section 200(1) provides: “Where it appears to the Commission that any person has contravened Section 175, 176, 177, 178, 179 or 181, the Commission may institute civil proceedings in the court against that person, whether or not that person has been charged with an offence in respect of the contravention, or whether or not a contravention has been proved in a prosecution.” [37] Significantly, the SC can commence civil proceedings regardless of whether criminal charges have been instituted or proven against the contravening person. This allows the SC to enforce the securities laws through either criminal prosecution, civil action, or both. [38] When the SC files a civil suit under Section 200, the court is empowered under Section 360 CMSA to make various orders if it appears to the court that a person has contravened a “relevant requirement” under the securities laws. Section 360(1) states the circumstances under which the court may make such orders. It reads: “360 Power of court to make certain orders
Where-
on an application by the Commission, it appears to the court that-
there is reasonable likelihood that any person will contravene a relevant requirement;
any person has contravened a relevant requirement; or
any person has contravened a relevant requirement and that there are steps which could be taken to remedy the contravention or to mitigate the effect of such contravention, including making restitution to any other person aggrieved by such contravention whether or not that person has been charged with an offence in respect of the contravention or whether or not a contravention has been proved in a prosecution; the court may, without prejudice to any order it would be entitled to make otherwise than pursuant to this Section, make one or more of the following orders...” [39] The types of orders the court can grant are extensive, including under Section 360(1)(D) “an order restraining the person from acquiring, disposing of or otherwise dealing with, assets which the court is satisfied such person is reasonably likely to dispose of or otherwise deal with”. [40] Importantly, Section 360(2) CMSA allows the court to grant an interim order of the kind applied for under Section 360(1) pending the final determination of the SC's application. This permits the court to act preemptively to preserve assets and prevent dissipation while the merits of the SC's case are being determined. Section 360(2) reads: “If an application is made to a court for an order under subsection (1), the court may, if in its opinion it is desirable to do so, before considering the application, make an interim order of the kind applied for and such order shall be expressed to have effect pending the determination of the application.” [41] Collectively, sections 179, 200 and 360 CMSA form a framework for the SC to pursue civil enforcement against securities fraud and to secure court orders to restrain such misconduct and preserve assets. ANALYSIS AND FINDINGS OF THE COURT Issues applicable to Enclosures 4, 39 and 46 Whether the SC has power under Section 360 CMSA to apply for a freezing injunction against the Defendants for an alleged breach of Section 179 CMSA. [42] A pivotal issue is whether the SC has the statutory power to apply for injunctive relief under Section 360 CMSA for an alleged breach of Section 179, which prohibits the use of manipulative and deceptive devices in connection with the subscription, purchase or sale of securities. [43] Madam Teh's position is that the SC lacks the statutory power under Section 360 CMSA to apply for a freezing injunction against her and the other defendants for an alleged breach of Section 179 CMSA. This is because Section 179, which the SC's claim is premised upon, is a prohibition on certain conduct rather than a “relevant requirement” as defined under Section 360(13) CMSA. A “relevant requirement” under 360(13) refers to requirements imposed by the CMSA itself, securities laws, licensing conditions, stock exchange rules, or other laws where the SC has prosecutorial powers. However, Section 179 does not impose any requirement but merely prohibits fraudulent devices, acts or statements in securities transactions. [44] Madam the relies on the Court of Appeal decision in Lai Soon Oon v Chew Fei Meng & Others Appeals [2018] 10 CLJ 48 which has interpreted what constitutes a “relevant requirement” under Section 360, thereby excluding prohibitions like Section 179 from its ambit. Madam Teh argues that a penal provision such as Section 179 must be construed strictly and cannot be stretched through an expansive interpretation of “relevant requirement”. [45] Ricky Wong and Wong SK Holdings aligns with Madam Teh's position that Section 360 cannot be invoked by the SC based on an alleged breach of Section 179. They contend that the SC, as a creature of statute, cannot exercise powers beyond what is conferred by the CMSA and the Securities Commission Malaysia Act 1993 (“SCMA”). [46] They argue that the SC's reliance on Section 179 as a “relevant requirement” triggering Section 360 is seriously misconceived, as Section 179 is clearly a penal provision prescribing offences rather than imposing requirements. Ricky Wong and Wong SK Holdings emphasise that Section 179 relates to prohibitions “in connection with subscription, purchase or sale of securities”, which does not cover the SC's complaints about subsequent events involving BPI's corporate exercise proceeds. Like Madam Teh, they cite the Lai Soon Onn decision to assert that Section 360 cannot be expansively interpreted to encompass Section 179 breaches. [47] Wong SK Holdings particularly stresses that Section 179 is housed under the “Prohibited Conduct” part CMSA and explicitly attracts criminal penalties under Section 182. As such, it cannot be construed as a “relevant requirement” under the civil Section 360 proceedings. It argues that the court must adopt a strict interpretation of Section 179 as a penal provision, rather than accepting the SC's liberal interpretation of “relevant requirement” under Section 360(13). It reiterates that the Court of Appeal's guidance in Lai Soon Onn on the scope of “relevant requirement” is binding and does not extend to Section 179. [48] The SC's position is that Section 179 CMSA is a “relevant requirement” under Section 360 CMSA, even though it does not contain the word “requirement” and is prohibitory in nature. This is supported by: a) Malaysian court decisions like Yii Chee Ming v Yu Chee Hoe & Ors [2018] 8 MLJ 680 (HC) which held that the phrase “relevant requirement” should be given its ordinary meaning as a requirement imposed by or under the CMSA, including Section 179. b) UK court cases interpreting similar provisions in the Financial Services Markets Act 2000, where prohibitory provisions without the word “requirement” were considered “relevant requirements”. c) Malaysian and UK cases showing a contravention of a “relevant requirement” can include a breach of a prohibited conduct. d) Distinguishing the Lai Soon Onn case relied on by the Defendants, as that dealt with the specific context of the Takeover Code and a private plaintiff's right of action. [49] The SC has pleaded sufficient facts alleging the Defendants contravened Section 179 CMSA and committed fraud, including specific allegations that the Defendants used devices, schemes or artifices to defraud and engaged in acts, practices or courses of business which operated as a fraud. [50] The SC argues the elements of Section 179(a) and/or (b) CMSA are met based on the facts, and cautions against wholesale adoption of elements from U.S. cases without proper context. [51] The declaratory order sought by the SC is sustainable as it relates to a civil claim under Section 179, not a criminal offence under Section 182. [52] Therefore, the SC submits it has the power under Section 360 to apply for a freezing injunction against the Defendants for the alleged breach of Section 179. [53] Upon careful consideration of the authorities cited and submissions by both parties, I am persuaded that the SC's contention is correct in law. The Defendants' heavy reliance on Lai Soon Onn v Chew Fei Meng & other appeals [supra] is misplaced, as that case is clearly distinguishable from the present. [54] Firstly, the Court of Appeal in Lai Soon Onn was considering a specific private action to enforce the Malaysian Code on Take-Overs and Mergers under the CMSA, not an action brought by the SC itself. This is evident from paragraph 10 of the judgment where the court noted that: “The plaintiff in his statement of claim sought for, inter alia, declaratory as well as other reliefs that:
D1-D4 were persons acting in concert to obtain control of D5; (b) D1-D4 had contravened s. 218(2) of the CMSA and s. 9(1) of the Take-Over Code upon their failure to undertake an MGO for the shares in D5; (c) Damages for the losses suffered by the plaintiff as a result of the alleged breach of statutory duties by D1-D4; and (d) An order to compel D1-D4 to undertake an MGO.” [55] The policy considerations in restricting a private individual's recourse differ from those applicable when the SC acts in its regulatory capacity. [56] Secondly, the legal issue in Lai Soon Onn pertained to whether non-compliance with the Take-Over Code amounted to a breach of a “relevant requirement”. At paragraph 52, the Court of Appeal framed the question as “whether compliance with the Take-Over Code is a “relevant requirement” under the CMSA.” The court's observations on the interpretation of “relevant requirement” must therefore be understood in that specific factual matrix, which involved the intersection between Sections 217 to 220 and Section 360 of the CMSA. These provisions and their interplay do not arise for consideration here. [57] Thirdly, the Court of Appeal's ultimate decision rested on avoiding conflicts between the SC's role under the Take-Over Code regime and court orders under Section 360, as well as preserving the SC's discretion under Section 219 to grant exemptions. The court held at paragraphs 58-59: “[58] We agree with the submission of counsel for D3, that if the phrase “relevant requirement” in s. 360 of the CMSA applies to division 2 part VI of the CMSA (in which s. 220 is part therein), then it would render s. 220 superfluous as it would result in overlapping with s. 360(1)(a) of the CMSA. To interpret and construe such that the SC has the right of recourse against non-compliance with the Take-Over Code pursuant to s. 220 and 360 of the CMSA is not harmonious but absurd. [59] In addition, s. 219 of the CMSA confers on the SC the statutory right to grant exemption in writing to any person from the provisions of division 2, the Take-Over Code and any ruling made under s. 217(4) of the same. Parliament would be acting in vain in enacting s. 219 of the CMSA if the courts are conferred with the power to take away the statutory right accorded to the SC under s. 360 of the same.” [58] Such concerns do not apply in the instant case, where the SC is invoking Section 360 in relation to breaches of provisions under Part V of the CMSA concerning market misconduct. [59] Fourthly, as observed in Yii Chee Ming v Yu Chee Hoe & Ors [supra], the Court of Appeal in Lai Soon Onn did not have occasion to examine Section 360 from the perspective of SC actions. The High Court in Yii Chee Ming (affirmed by the Court of Appeal) rightly noted that a restrictive reading of “relevant requirement” based on the presence of that term would mean “even the SC would not be able to rely on s 360(1) of the CMSA for reliefs pertaining to the contravention or breach of s 317 of the CMSA as the word 'requirement' is absent in that provision.” The limited ratio decidendi of Lai Soon Onn should not be extended to constrain the SC's statutory powers to address securities law violations and protect investors. Such an outcome would be contrary to the CMSA's purposes. [60] The upshot of this is that Lai Soon Onn was principally concerned with avoiding inconsistency between Sections 220 and 360 in relation to the Take-Over Code, and preserving the SC's exclusive authority to regulate take-overs and grant exemptions. This is far removed from the present case where the SC itself is invoking Section 360 to restrain a breach of Section 179, a prohibited conduct under
There is no question of usurping the SC's powers here. [61] Furthermore, a closer reading of Lai Soon Onn reveals that the Court of Appeal did not go so far as to suggest that all provisions under the CMSA which do not contain the word “requirement” are automatically excluded from the ambit of Section 360. Rather, at paragraph 57, the court cited with apparent approval the Federal Court case of Suruhanjaya Sekuriti v Datuk Ishak bin Ismail [2016] 1 MLJ 733 as an illustration that “Section 360 CMSA provides a recourse for the SC to obtain certain orders from the courts if there is a contravention of a “relevant requirement”.” The court's focus was more on interpreting whether compliance with the Take-Over Code constituted a “relevant requirement” under Section 360(13)(c), rather than making a blanket exclusion of all CMSA provisions that omit the word “requirement”. Crucially, that case involved prohibited conduct under Part V CMSA (specifically Sections 177 and 188) for which ex parte interim orders were granted to the SC pursuant to Section 360, even though those sections do not use the word “requirement”. This strongly suggests that the Court of Appeal in Lai Soon Onn recognised, at least implicitly, that a breach of provisions under Part V on market misconduct could amount to a contravention of a “relevant requirement”, irrespective of the terminology. [62] As such, I find that Lai Soon Onn does not assist the Defendants' case and can be distinguished on multiple fronts. It does not preclude the SC from seeking injunctive relief against a breach of Section 179 under the broad rubric of Section 360 CMSA. [63] Crucially, there is ample judicial authority that supports a broad reading of “relevant requirement” under Section 360 CMSA to include a breach of prohibited conduct, even if the provision does not employ the term “requirement”. [64] This is most clearly exemplified in Securities Commission v Chan Chui Mei [2019] 12 MLJ 817, a case directly on point as it involved Section 179 CMSA. There, the High Court dealt with an interlocutory injunction application by the SC under Section 360(2) premised on a breach of Section 179. In granting the injunction, Has Zanah Mehat J (as she then was) held that the SC had shown a good arguable case against the defendant under Section 179, and that “a contravention of Section 179 CMSA is a relevant requirement for purposes of Section 360 CMSA.” Subsequently, in allowing the SC's claim on the merits, Mohamed Zaini Mazlan J (as he then was), in Securities Commission v Chan Chui Mei [2019] MLJU 1539, found the defendant liable for defrauding a listed company under Section 179, prohibited conduct of a director under Section 317A, and abetting provision under Section 370. The court then proceeded to grant wide-ranging orders under Section 360 including a bar on being a director and restitution. The clear implication is that a breach of the market misconduct provisions in Part V CMSA, including Section 179, constitutes a contravention of a “relevant requirement” that enlivens the court's powers under Section 360. [65] This approach of treating breaches of prohibited conduct without any mention of “requirement” as falling within Section 360 is also discernible in Securities Commission v Ishak bin Ismail [2010] MLJU 1194. The High Court granted an ex parte interim injunction and order for disclosure of assets under Section 360(2) in respect of contraventions of Section 177 (false or misleading statements) and Section 188 (insider trading) CMSA, even though neither provision uses the word “requirement”. [66] Securities Commission v Lee Kee Sien, Albert & Ors [2009] 8 CLJ 70 is to similar effect, where an interim injunction was granted under the former Section 100 of the Securities Industry Act 1983 (the precursor to Section 360) for breaches of Sections 14 and 15A which relates to prohibited conduct in making misleading statements inducing securities transactions. [67] Likewise, in APFT Berhad v Dato Faruk Othman [2018] 1 LNS 1589, the High Court held that a breach of Paragraph 16.3 of the Bursa Malaysia Main Market Listing Requirements, which provides for a prohibited conduct, amounted to a contravention of a relevant requirement within the meaning of Section 360(13)(c)(iii) CMSA even though Paragraph 16.3 does not contain the word “requirement”. An injunction was granted to restrain the defendant from dealing with his shares. [68] Viewed in totality, this line of authorities evinces our courts' willingness to adopt an expansive reading of “relevant requirement” that does not hinge on the presence of that precise term, but focuses instead on whether the impugned conduct is proscribed under securities laws administered by the SC. Such judicial approach is consonant with the objectives of market regulation and allows the SC to take prompt action to protect investors and market integrity against a broad range of prohibited conduct. It would be wholly incongruous if contraventions as egregious as fraud, manipulation, false trading and insider dealing under Part V CMSA are to fall outside the purview of Section 360 merely because of infelicitous language. The mischief and purpose of the statute must prevail over an overly restrictive literal interpretation. [69] It is pertinent to note that the Federal Court case of Suruhanjaya Sekuriti v Datuk Ishak Ismail [2016] 3 CLJ 19 involved prohibited conduct under Part V CMSA, specifically false or misleading statements under Section 177 and insider trading under Section 188. Neither of those provisions mention the word “requirement”. Yet, at paragraph 4 of the Federal Court's judgment, it was noted without any disapproval that the High Court had earlier granted an ex parte interim order under Section 360 of the CMSA to restrain the respondent from dissipating funds believed to be proceeds of offences under the securities law. [70] The inescapable conclusion is that the Federal Court and the High Court below accepted that breaches of Sections 177 and 188, both being prohibited conduct provisions within Part V CMSA that do not use the term “requirement”, are nevertheless amenable to the grant of injunctive and other ancillary relief under Section 360. [71] By parity of reasoning, contraventions of Section 179, which similarly prohibits the use of manipulative and deceptive devices under Part V, must also constitute a breach of a “relevant requirement” under Section 360. It would be wholly illogical and arbitrary for the Court of Appeal in Lai Soon Onn to endorse the invocation of Section 360 for breaches of Sections 177 and 188, but exclude Section 179 from its purview merely because of the draftsman's choice of words. Such a technical and blinkered reading would lead to the absurd result of rendering nugatory the SC's ability to combat a wide range of serious market misconduct that the CMSA was designed to address. [72] The fact that the SC has pleaded sufficient facts alleging the Defendants contravened Section 179 and committed fraud, including specific allegations that the Defendants used devices, schemes or artifices to defraud and engaged in acts, practices or courses of business which operated as a fraud, further reinforces the conclusion that the SC's application against the alleged breach of Section 179 falls squarely within the ambit of Section 360. [73] The fact that the Court of Appeal cited the Federal Court decision in Suruhanjaya Sekuriti v Datuk Ishak bin Ismail in the context of elucidating the SC's powers under Section 360 therefore raises at the very least a strong presumption that contraventions of Part V CMSA, of which Section 179 is a part, are capable of falling within the rubric of “relevant requirement” irrespective of the precise terminology employed. While not conclusive, it militates against the Defendant's assertion that Lai Soon Onn has decisively confined “relevant requirement” only to provisions that explicitly adopt that phrase. Such an artificial distinction finds no basis in the language and purpose of Section 360. [74] I am also fortified in my view by the position adopted by the courts in the United Kingdom, where the statutory scheme governing injunctions and restitution orders closely mirrors our own. Sections 380 and 382 of the Financial Services and Markets Act 2000 (“FSMA”) empower the Financial Conduct Authority to apply for injunctions and restitution orders where there is or is likely to be a contravention of a “relevant requirement”. The definition of “relevant requirement” in Sections 380(6)(a)(i) and 382(9)(a)(i) of the FSMA as “a requirement which is imposed by or under this Act” or “by Part 7 of the Financial Services Act 2012” bears striking resemblance to our Section 360(13)(a)(i) which refers to “a requirement which is imposed by or under this Act or any securities law”. [75] Notably, in Financial Services Authority v Sinaloa Gold plc and others (Barclays Bank plc intervening) [2013] UKSC 11, [2013] 2 AC 28, the UK Supreme Court held that the meaning of “relevant requirement” under Section 380(6)(a) of the FSMA included the requirement under Section 19 of the FSMA to be authorised or exempt before carrying on a regulated activity, even though Section 19 does not contain the word “requirement”. As the court explained at paragraph 10, a “relevant requirement” includes “a requirement which is imposed by or under this Act” and therefore covers the requirement under Section 19. [76] Similarly, in Financial Conduct Authority v Avacade Ltd (in liquidation) (trading as Avacade Investment Options) and others [2020] EWHC 1673 (Ch), the English High Court found that the meaning of “relevant requirement” under Section 382 of the FSMA is a broad one, encompassing contraventions of Sections 19 and 21 of the FSMA (prohibitions against carrying on regulated activities without authorisation and restrictions on financial promotions respectively) as well as Section 89 of the Financial Services Act 2012 which relates to misleading statements. None of those provisions mention “requirement”. At paragraphs 449 and 450, Adam Johnson QC (sitting as a Deputy Judge of the High Court) held: “[449]...In FCA v Capital Alternatives [2018] 3 WLUK 623, HHJ McCahill QC considered the position at [789-796]. As pointed out by the FCA, the Judge cited with apparent approval passages from the Encyclopaedia of Financial Services (loose leaf), to the effect that s.382 is intended to apply to “any breach of the regulatory regime” including prohibitions, whether they amount to criminal offences or regulatory infractions... [450] On that basis, the following matters relied on in this case are all “relevant requirements” for the purpose of s.382: contraventions of s.19 FSMA (the general prohibition against carrying on regulated activities without being authorised or exempt); s.21 FSMA (restrictions on financial promotions); and s.397 FSMA.” [77] These authorities demonstrate unequivocally the inclination of the English courts to construe the term “relevant requirement” in a broad and purposive manner, focusing on the substance rather than the form of the contravened provision. The fact that a provision does not utilise the word “requirement” and is couched in prohibitory language does not preclude it from being a “relevant requirement”, as long as it imposes a legal obligation or prohibition as part of the regulatory framework. Such an approach avoids overly technical distinctions and allows the regulator to take effective action against the mischief of market misconduct and abuse. Given the similarity of our statutory regimes, there is much to commend this pragmatic and purposive construction which I find highly persuasive. [78] Ultimately, the paramount consideration in interpreting the phrase “relevant requirement” in Section 360(13)(a)(i) CMSA must be the plain language of the provision and the statutory purpose undergirding it. Section 360(13)(a)(i) defines “relevant requirement” in broad terms to mean “a requirement which is imposed by or under this Act or any securities law”. Nowhere in this definition is there a prescription that the requirement must be one that is expressly stipulated or positively phrased. The focal point is whether the requirement is imposed under the CMSA or securities law, not the particular linguistic formulation adopted. [79] In this regard, it is salient to note that Section 179 CMSA, while not using the term “requirement”, is clearly a prohibition or legal obligation imposed by the CMSA against the use of manipulative and deceptive devices in connection with dealings in securities. It forms an integral part of the statutory framework to combat market misconduct which the SC is tasked to enforce in the interest of investors. Construing such a prohibition as falling outside the natural meaning of “a requirement imposed by or under the CMSA” would not only be unduly legalistic and restrictive, but also frustrate the legislative purpose of arming the SC with the necessary powers to fulfill its mandate. [80] Given the above analysis, a myopic fixation on the absence of the word “requirement” in Section 179 without regard to its substantive effect in imposing a legal obligation, thereby denuding the SC of its power to take prompt action against egregious conduct, would lead to consequences that are both absurd and repugnant to the purpose and object CMSA. Such an interpretation must be avoided in favour of one that is purposive and commercially sensible. [81] I am also mindful that the powers conferred on the SC under Section 360 are meant to be facilitative of its enforcement function and should therefore be construed generously. This is underscored by Section 360(14) CMSA which provides that: “(14) An application made pursuant to this Section by the Commission or any person referred to in subsection (7) shall not prejudice any other action that may be taken by the Commission or that person, as the case may be, under any securities laws or any other law or rules.” [82] It follows that the scope of “relevant requirement” under Section 360(13) must be interpreted sufficiently wide to enable the SC to discharge its statutory duties, and not be confined to only a narrow class of requirements that are couched in a particular fashion. To hold otherwise would be to ignore the raison d'etre of Section 360 and render it a toothless provision in respect of a substantial portion of the [83] In the circumstances, applying a purposive interpretation that coheres with the SC's statutory role as a regulator to protect investors and preserve market integrity, I am impelled to the conclusion that the definition of “relevant requirement” in Section 360(13)(a)(i) is sufficiently broad to encompass Section 179 notwithstanding its prohibitory language and the absence of the word “requirement”. The substance and effect of the provision in imposing a legal obligation that is integral to the regulatory scheme takes precedence over linguistic technicalities. While Section 179 is drafted as a prohibition, it is indubitably a requirement imposed by the CMSA that is binding on all persons dealing in securities. Non-compliance is a breach of a relevant requirement that attracts the sanctions under Section 360. To hold otherwise would be to undermine the efficacy CMSA and unduly curtail the SC's ability to take expeditious action to restrain a wide range of serious misconduct that the Act was designed to combat. [84] In the circumstances, I am satisfied that the SC has the necessary statutory power under Section 360 CMSA to apply for an injunction against the Defendants for the alleged breach of Section 179. The Defendants' application to set aside the ex parte injunction on this ground is therefore dismissed. Whether the common law requirements for a Mareva injunction are applicable to this application filed pursuant to Section 360(2) CMSA. [85] The SC's position is that the requirements under Order 29 Rule 1(2A) ROC (“ROC”) for ex parte relief and the common law requirements for a Mareva injunction do not apply to this application, which is filed pursuant to the express statutory provision of Section 360(2) CMSA. [86] The SC relies on the High Court decision in Securities Commission v Ishak Bin Ismail, where it was held that an application for a freezing injunction under Section 360(2) CMSA is distinct from a Mareva injunction. As such, the requirements under Order 29 Rule 1(2A) and the common law requirements for a Mareva injunction are not applicable. [87] In Securities Commission v Ishak Bin Ismail (HC), it was further held that to succeed in an application under Section 360(2), the SC need only show there has been a contravention of securities law and the Defendants have made unjustified gains from it. This is in contrast with a Mareva injunction, where the plaintiff must show a real risk of dissipation of assets. [88] The SC contends that it has complied with the requirements of Section 360(1)(D) CMSA by showing that Madam Teh is “reasonably likely to dispose of or otherwise deal with” her assets. [89] The SC argues that it has met the criteria for a Mareva injunction under common law, including demonstrating a good arguable case, a real risk of asset dissipation, a balance of convenience favoring the injunction, and no need for an undertaking as to damages, citing Section 360(5) of the CMSA and relevant case law regarding public authorities enforcing the law. [90] Therefore, the SC maintains that the requirements for ex parte relief under the ROC and for a Mareva injunction do not apply to this application under Section 360(2) CMSA. In any event, those requirements have been met. [91] The Defendants' position is that the requirements under Order 29 Rule 1(2A) ROC for ex parte relief, as well as the general requirements for a Mareva injunction under common law, remain applicable to the SC application filed pursuant to Section 360(2) CMSA. [92] They argue that while Section 360 CMSA empowers the court to grant certain orders, including freezing injunctions, it does not displace or modify the substantive legal principles governing when such orders should be granted. The Defendants contend that Section 360 is an enabling provision that confers locus standi on the SC to apply for such orders, but it does not create a separate, lower threshold for the court to actually grant the orders. [93] The Defendants rely on the Court of Appeal decision in Motor Sports International Ltd (Servants or Agents at Federal Territory of Labuan) & Ors v Delcont (M) Sdn Bhd [1996] 2 MLJ 605, which held that despite the statutory basis provided by Order 29 Rule 2A of the Rules of the High Court 1980, Mareva injunctions must still comply with the settled common law principles governing their grant. They submit that the cases cited by the SC do not stand for the proposition that Section 360 applications are exempt from these basic legal requirements. [94] Furthermore, the Defendants argue that even if Section 360 were to be interpreted as modifying the common law principles, it cannot be construed as abrogating the fundamental requirements for ex parte relief under Order 29 Rule 1(2A) ROC. This Rule, which mandates full and frank disclosure of material facts, is a core tenet of procedural fairness that cannot be simply disregarded, even in statutory applications. [95] The Defendants contend that accepting the SC's argument that it need not comply with Order 29 Rule 1(2A) ROC or establish a real risk of dissipation would effectively render the court's discretion nugatory and compel the grant of freezing injunctions merely because the SC appears to have a case under Section 360(1) CMSA. This, they submit, would be an untenable legal position. [96] In essence, the Defendants' stance is that while Section 360 provides a statutory gateway, the SC must still satisfy the substantive common law requirements and the ROC for the court to properly exercise its discretion in granting the extraordinary relief of a freezing injunction. [97] Having carefully considered the submissions of both parties and the authorities cited, I am persuaded that the SC's application under Section 360(2) CMSA is not subject to the requirements under Order 29 Rule 1(2A) ROC or the common law principles governing Mareva injunctions. [98] The decision of the High Court in Securities Commission v Ishak Bin Ismail [supra] is highly instructive and directly on point. In that case, Abdul Aziz J (as he then was) considered the very issue before me, namely whether an application for a freezing injunction filed by the SC pursuant to Section 360(2) CMSA is subject to the common law requirements for a Mareva injunction. After carefully analysing the statutory language and intent, His Lordship held unequivocally that such applications are distinct from Mareva injunctions and not beholden to the same onerous criteria. [99] His Lorsdship observed that in an application under Section 360(2) CMSA, the plaintiff “has no obligation to show evidence of a real risk of dissipation of assets”, which is one of the essential requirements that an applicant for a Mareva injunction must typically establish under common law. His Lordship reasoned: “In my view, the Plaintiff has no obligation to show evidence of a real risk of dissipation of assets in application under Section 360 The application is not for the purpose of preservation of the assets for personal benefit of the applicant, the Plaintiff. The application was for the preservation the assets that are allegedly obtained in contravention of the provisions of the securities laws and if necessary, for restitution to innocent party.” [100] The decision in Securities Commission v Ishak Bin Ismail makes it abundantly clear that Parliament, in enacting Section 360(2) CMSA, intended to unshackle the SC from the strictures of the common law on Mareva injunctions, so that it can move expeditiously to freeze assets reasonably believed to be proceeds of securities law violations, without having to first prove a real risk of dissipation. I am persuaded by the clear and cogent reasoning of Abdul Aziz J on this issue. Accordingly, I hold that the SC's present application under Section 360(2) is not subject to or defective for non-compliance with any of the ordinary Mareva injunction requirements developed under common law. [101] Furthermore, Section 360(14) CMSA which states that an application made under that Section shall not prevent the SC from taking any other action under securities laws or any other law or rules, expressly preserves the SC's right to take any other action under any other law or rules. [102] The term “law” is defined in Section 3 of the Interpretation Acts 1948 and 1967 as follows: ““Law” includes written law, the common law in so far as it is in operation in the Federation or any part thereof, and any custom or usage having the force of law in the Federation or any part thereof;” [103] This definition is read together with Article 160 of the Federal Constitution, which provides: “law” includes written law, the common law in so far as it is in operation in the Federation or any part thereof, and any custom or usage having the force of law in the Federation or any part thereof.” [104] The combined effect of these provisions is that the term “law” encompasses not just written law but also common law that is applicable in Malaysia. A Mareva injunction, being a creature of common law, would fall within the ambit of “any other law” referred to in Section 360(14) CMSA. [105] By expressly stating that an application under Section 360 “shall not prejudice any other action” that may be taken by the SC under “any other law”, Parliament has made clear its intention to preserve the SC's right to pursue common law remedies like Mareva injunctions alongside the statutory powers conferred by Section 360. The specific language used in Section 360(14) CMSA militates against any interpretation that Section 360 was meant to displace or abrogate the common law remedy of Mareva injunctions. [106] If Parliament had intended for Section 360 to be a comprehensive code that excludes the applicability of Mareva injunctions, it could have easily expressly provided for such an exclusion. The deliberate choice not to do so, and to instead include subsection (14), strongly supports the position that the SC's right to seek a common law Mareva injunction remains intact and is not abrogated by Section 360. [107] For common law to be abrogated, there must be specific terms in the written law that irrevocably alter the common law position. This general principle was upheld by the Federal Court in two recent cases, Chin Jhin Thien & Anor v Chin Huat Yean [2020] 4 MLJ 581 and Tony Pua Kiam Wee v Government of Malaysia [2019] 12 MLJ 1, where the applicability of common law was affirmed unless explicitly abrogated by statute. [108] In Chin Jhin Thien, the Federal Court held: “(1) By virtue of s 3(1) of the Civil Law Act 1956, the courts in Malaysia have applied the common law of England and the rules of equity as administered in England on 7 April 1956. It followed that the concept of secret trusts, which was part of the law of trusts and was governed by the rules of equity and the common law of England, applied in Malaysia unless there was an explicit abrogation, variation, restriction or modification of it by written law. The Malaysian Wills Act 1959 or other Acts of Parliament did not explicitly abrogate the application of secret trusts. In fact, its application was endorsed in the written law.
There was no cogent reason to abrogate secret trusts in Malaysia. The proviso to s 3(1)(a) of the Civil Law Act 1956 did not exclude the applicability of the law on trusts and secret trusts.” [109] Similarly, in Tony Pua Kiam Wee, the Federal Court stated at paragraphs 101-102: “[101] The general principle may be stated thus: a statute abrogates a common law principle where it expressly states an intention to abrogate that principle, or where it implicitly abrogates the principle by adopting a scheme that is wholly incompatible with the continued application of the common law principle. [102] When determining whether statute or written law has abrogated or modified common law, it is implicit that there must be a degree of specificity in abrogating the common law position. For example if the issue relates to the abrogation of a particular cause of action such as breach of promise of marriage in contract, then the question to be asked is which statute expressly or impliedly abrogates this particular cause of action. In other words the written law or statute should specifically encompass the common law position such that the common law cause of action is effectively replaced.” [110] The combined effect of these two Federal Court authorities is that common law principles and remedies continue to apply in Malaysia unless there are express or necessarily implied statutory provisions abrogating them. The abrogation must be specific - it is not enough for the statute to merely cover the same general area of law as the common law principle. Rather, the statutory language must clearly and unequivocally evince Parliament's intention to displace the particular common law rule or remedy in question. [111] In the absence of such clear and specific abrogating language, the common law position remains in force, even if the statute and common law cover the same broad legal domain. Any ambiguity or lack of clear words abrogating common law in the statute must be resolved in favor of preserving the applicability of common law. A court cannot presume that Parliament intended to alter common law unless that intention has been manifested expressly or by necessary implication through the language of the statute. [112] Applying these principles to the present case, for Section 360 CMSA to be interpreted as abrogating the common law Mareva injunction, it must contain specific language to that effect. It is not sufficient for Section 360 to merely cover the same general domain of asset freezing orders. There must be express words or necessarily implied terms in Section 360 that clearly evince Parliament's intention to extinguish the SC's right to apply for Mareva injunctions and replace it exclusively with the statutory regime. Absent such clear and unequivocal language, the correct interpretive approach is to recognise that Mareva injunctions remain available to the SC as a common law remedy notwithstanding the enactment of Section 360. [113] Crucially, Section 360 CMSA does not contain any wording to abrogate the application of common law. The 28 subsections of Section 360 do not feature any language expressing a clear intention to exclude the operation of common law principles and remedies. There is no provision in Section 360 equivalent or similar to Section 347(3) of the Companies Act 2016 in respect of derivative proceedings, which reads: “The right of any person to bring, intervene in, defend or discontinue any proceedings on behalf of a company at common law is abrogated.” [114] This provision demonstrates that when Parliament intends to extinguish common law rights and remedies and replace them with a purely statutory framework, it does so through the use of clear, direct, and unequivocal language. The lack of any such express abrogating language in Section 360 is a strong indication that Parliament did not intend to oust the application of common law principles in the context of the SC actions to freeze assets reasonably believed to be the proceeds of securities law violations. [115] Instead of having to prove the elements of a Mareva injunction, to succeed in an application under Section 360(2) CMSA, the Securities Commission need only establish two key elements, as succinctly stated by Abdul Aziz J in Securities Commission v Ishak Bin Ismail - “that there has been a contravention of the securities law and the person who contravened it ie the Defendant has made unjustified gains from it.” [116] The first element requires the SC to demonstrate a contravention of a specific securities law provision, such as the prohibited conduct under Section 179 CMSA. The second element of “unjustified gains” focuses on whether the defendant has improperly profited from said contravention, rather than the common law Mareva requirement of proving a real risk of dissipation of assets. [117] The decision in Securities Commission v Ishak Bin Ismail (HC) confirms that under Section 360(2) CMSA, once a breach of securities law and unjustified gains flowing from that breach are shown, an interim injunction should ordinarily be granted to preserve the status quo pending trial, without need for the SC to further prove a real risk of asset dissipation. This ensures that public interest is protected and potential proceeds of securities law violations are not put beyond reach before the conclusion of the court proceedings. [118] The Defendants' reliance on the Court of Appeal decision in Motor Sports International Ltd v Delcont [supra] to argue that Mareva injunctions under Section 360(2) of the CMSA must still comply with the settled common law principles governing their grant is misplaced for several reasons. [119] First, a close reading of the judgment in Motor Sports reveals that the Court of Appeal's observations about Mareva injunctions needing to comply with common law principles were made specifically in the context of applications for Mareva relief under the inherent jurisdiction of the court, and not under any statutory provision. At no point did the court examine or make any pronouncement on whether Parliament, through statute, can modify or exclude the application of common law Mareva principles in specific contexts. [120] The Motor Sports case concerned a dispute between defendant over the proceeds from motor truck shows organised by the plaintiff. An issue that arose was whether the ex parte Mareva injunction obtained by the plaintiff against Motor Sports complied with the requirements of Order 29 rule 2A of the Rules of the High Court 1980, and whether the injunction was too broad by not specifying a monetary limit on the frozen bank accounts. The court held that the affidavit supporting the ex parte application did not comply with Order 29 rule 2A, the injunction was oppressively broad by not specifying a monetary limit, and the condition imposed by the judge to deposit RM300,000 improperly gave the plaintiff priority over other creditors contrary to the purpose of a Mareva injunction. The court cited with approval the following passage from the High Court judgment in S & F International Ltd v Trans-Con Engineering Sdn Bhd [1985] 2 CLJ 228: “In PCW (Underwriting Agencies) Ltd. v Dixon & Anor. [1983] 2 All ER 158 which sets out the policy underlying the Mareva jurisdiction, it was held that the sole purpose of a Mareva injunction was to prevent a plaintiff being cheated out of the proceeds of an action, should he be successful, by a defendant transferring his assets abroad or dissipating his assets within the jurisdiction, and that the remedy was not intended to give a plaintiff priority over those assets, or to prevent a defendant from paying his debts as they fell due, or to punish him for his alleged misdeeds, or to enable a plaintiff to exert pressure on him to settle an action.” [121] Crucially, the PCW (Underwriting Agencies) case referred to above was also concerned with an application for a Mareva injunction pursuant to the court's inherent jurisdiction, and not under any statutory provision. Thus, the Court of Appeal's endorsement of the common law Mareva principles in Motor Sports must be understood in the specific context of the court's inherent jurisdiction. It does not, and indeed cannot, address the separate question of whether Parliament can modify or exclude those principles when conferring statutory freezing powers on a regulator like the SC in a specific legislative context. [122] Second, the facts and issues in Motor Sports are far removed from those arising under Section 360 of the CMSA. Motor Sports involved a dispute between private commercial parties and an application for a Mareva injunction pursuant to the inherent jurisdiction of the court. In contrast, the present case involves an application by a public regulator pursuant to a specific statutory provision for the purpose of enforcing securities laws and protecting the investing public. [123] The Court of Appeal in Motor Sports neither considered nor made any ruling on the scope and application of Section 360 of the To mechanistically transplant observations about common law Mareva principles from Motor Sports to this very different context would be to disregard the specificity of Section 360 and to gloss over Parliament's intention in enacting that provision. [124] Third and most fundamentally, the Court of Appeal in Motor Sports did not have the opportunity to consider whether Parliament can, through clear statutory language, modify or exclude the application of common law principles in particular contexts. As such, Motor Sports does not stand as authority for any general proposition that common law Mareva principles invariably apply even to statutory provisions that confer freezing powers on public regulators. [125] The question of whether Section 360 of the CMSA has modified or excluded common law Mareva principles can only be answered by carefully examining the language, scheme and purpose of that specific provision, as the High Court did in Securities Commission v Ishak Bin Ismail. It is not permissible to simply import observations about common law requirements from cases like Motor Sports which were decided in materially different factual and legal contexts. [126] In conclusion, the Motor Sports case, which involved an application for a Mareva injunction under the inherent jurisdiction of the court in a dispute between private parties, has no bearing on the proper interpretation of the SC's statutory powers under Section 360 of the CMSA. The Defendants' attempt to rely on Motor Sports to read common law fetters into Section 360 is misconceived and must be rejected. [127] In interpreting the language and requirements of Section 360 CMSA, I find it significant that Parliament has chosen to depart from the terminology typically associated with Mareva injunctions under common law. Specifically, Section 360(1)(D) uses the phrase “reasonably likely to dispose of or otherwise deal with” assets, which denotes a lower threshold than the “real risk of dissipation” that an applicant for a Mareva injunction must ordinarily prove. [128] This choice of language is a clear indication that Parliament did not intend for the SC to be saddled with the same onerous evidential burden in applications under Section
As long as the SC can show a reasonable likelihood of dissipation or other dealings with the assets in question, the court may grant an order restraining such dealings. There is no need for the SC to go a step further and establish a real risk of dissipation, which has been described in Mareva jurisprudence as a “solid danger” that a judgment would go unsatisfied. [129] Moreover, in a significant departure from ordinary Mareva applications, Section 360(5) CMSA expressly states: “Where an application for an order under subsection (1) is made by the Commission or any person duly authorised by the Commission or a stock exchange, a derivatives exchange or an approved clearing house, the court shall not, as a condition of the grant of the order, require any undertaking as to damages to be given by or on behalf of the Commission, stock exchange, derivatives exchange or an approved clearing house.” [130] This provision removes one of the usual safeguards in place for Mareva injunctions, which is the requirement for the applicant to provide an undertaking to pay damages in the event that the injunction was improperly granted and the defendant suffers loss as a result. The exemption of this requirement for applications by the SC reinforces the view that Parliament intended to unburden the regulator from the strictures of common law Mareva injunctions, so that swift action can be taken to prevent dissipation of assets in securities cases without the SC being hindered by the damages undertaking requirement. [131] While this court is minded to agree with the SC that the requirements under Order 29 Rule 1(2A) ROC for ex parte relief and the requirements for a Mareva injunction are not applicable to this application, I shall proceed to examine whether the SC has satisfied the requirements of the duty of full and frank disclosure, good arguable case, real risk of dissipation of assets and balance of convenience in favor of granting the injunction, lest I be found to have fallen into error in my determination on this issue. Whether there is a good arguable case against the Defendants as the SC has not pleaded that they had knowledge or intent to defraud. [132] The SC's position is that there is a good arguable case against the Defendants, Ricky Wong, Wong SK Holdings and Madam Teh, as the facts and evidence show their knowledge and intent to defraud in the scheme. The threshold for a good arguable case is one that is more than barely capable of serious argument but not necessarily having a better than 50% chance of success. [133] The SC contended that Ricky Wong had personal knowledge of the BPI Corporate Exercises prior to their implementation and was the mastermind of the devices, schemes and artifices to defraud BPI. Wong SK Holdings, controlled by Ricky Wong, acted as his alter ego. The facts show Ricky Wong's intention to defraud, as he caused proceeds to be paid out from BPI to nominee companies on fictitious invoices and then transferred to his own accounts. [134] In respect of Madam Teh, it was contended that she signed 71 cheques and payment vouchers for fictitious transactions totaling over RM56 million from BPI to nominee companies. She is a director, shareholder and bank signatory of Wong SK Holdings which received RM9.3 million in proceeds, and also of Asia Media, a nominee company that received and further channeled proceeds. She is a shareholder of Havana Bayview Sdn Bhd (“Havana Bayview”) which purchased a property with RM3.5 million of proceeds. [135] The SC argues that for all Defendants, knowledge and intent to defraud can be inferred from these primary facts showing their involvement. Further evidence of fraudulent intent can be elicited at trial. Additionally, it was submitted that Madam Teh's participation in approving the fictitious payments shows she dishonestly assisted the fraud. [136] Therefore, the SC submits it has properly pleaded facts establishing a good arguable case of knowledge and intent to defraud against each of the Defendants. [137] Ricky Wong and Wong SK Holdings submit that the SC has failed to establish a good arguable case of fraudulent conduct against them under Section 179(a) and (b) CMSA. They argue that the SC's pleadings do not contain the requisite particulars asserting that they had the knowledge or intent to defraud BPI through the alleged devices, schemes or acts related to the corporate exercises. [138] They contend that for an allegation of fraud or dishonesty under Section 179, the pleadings must go beyond facts consistent with innocence and specifically plead the primary facts demonstrating their dishonest state of mind and intention to defraud. Merely pleading that they were involved in or received proceeds from the corporate exercises is insufficient to make out a proper case of fraudulent conduct under Section 179. [139] Furthermore, Ricky Wong and Wong SK Holdings argue that while dishonesty can sometimes be inferred from circumstances, the SC must first properly plead the primary facts pointing towards their fraudulent intent, which it has failed to do. Without such foundational pleadings of dishonest knowledge or intent, the SC cannot rely on circumstantial evidence alone to establish a good arguable case at this interlocutory stage. [140] Madam Teh submits that the SC's pleadings disclose no good arguable case of fraudulent conduct against her under Section 179 CMSA, as they crucially lack any assertion or particulars that she had knowledge or intention to defraud BPI through her actions as a signatory. [141] She argues that Section 179(a) and (b) require an element of fraud or deceit, which in turn necessitates knowledge or intention on the part of the defendant. However, the SC's claim against Madam Teh is merely that she signed certain cheques and payment vouchers, without any pleading that she did so with fraudulent knowledge or intent to defraud BPI. [142] Madam Teh contends that for an allegation of fraudulent or dishonest conduct under Section 179, the pleadings must particularise her dishonest state of mind and intention to deceive, rather than pleading facts consistent with innocence. She argues the SC cannot point to circumstantial evidence to infer dishonesty, when it has not first properly pleaded the primary facts showing her alleged fraudulent intent. [143] In essence, the Defendants argue the SC has failed to establish a good arguable case against them under Section 179 by not pleading the critical element of their alleged fraudulent knowledge or intention, which is required for the court to grant an interlocutory freezing injunction. [144] Having carefully considered the submissions of both parties and the authorities cited, I find that the SC has established a good arguable case that the Defendants had knowledge of and intention to defraud BPI in the scheme relating to the corporate exercises. [145] The threshold for establishing a good arguable case at the interlocutory stage is not an overly burdensome one. As submitted by the SC and established by case law, the standard is that the case put forward must be more than barely capable of serious argument, but need not show a better than 50% chance of success at trial (Biasamas Sdn Bhd & Ors v Kan Yan Heng & Anor [1998] 4 MLJ 1 (CA); Bright Rims Manufacturing Sdn Bhd v Victor Taichung Machinery Works Co Ltd & Anor [2008] 4 MLJ 380 (CA)). [146] Contrary to the Defendants' contention that the SC failed to plead knowledge or intent to defraud, I note that in the SC's Statement of Claim (Enclosure 38), there are in fact multiple express mentions that the Defendants used devices, schemes or artifices “to defraud BPI” (see paragraphs 113, 157, 245, 252). This is reiterated in the SC's Amended Reply (Enclosure 303) which states that Madam Teh contravened Section 179 by using devices/schemes “to defraud BPI” (paragraph 4) and that she used the BPI corporate exercises and fictitious transactions as a “device, scheme or artifice to defraud” (paragraph 10(iii)(a)). These assertions suggest the SC did plead intent to defraud on the part of the Defendants. [147] In relation to Ricky Wong and Wong SK Holdings, I agree with the SC that the facts and evidence pleaded in the Statement of Claim are sufficient to make out a good arguable case that they had knowledge of and intent to defraud BPI through the devices, schemes and artifices employed in the Rights Issue, Private Placement and ESOS exercises. [148] Specifically, the SC has pleaded in paragraphs 85 and 86 of the Statement of Claim that Ricky Wong “had personal knowledge of the operations of the Rights Issue Exercise even prior to the implementation of the said exercise” as evidenced by email correspondences showing he was copied on key matters relating to the exercise. [149] The SC further pleads in paragraphs 54(i), 54(ii) and 108 of the Statement of Claim that Ricky Wong and Wong SK Holdings were the ultimate beneficiaries and recipients of RM35 million in proceeds siphoned from BPI through the Rights Issue on the basis of fictitious invoices by their nominee companies BTV Cinebus, Transnet and Matrix Angle. Similarly, in respect of the Private Placement and ESOS exercises, the SC pleads in paragraphs 119, 139 – 152, 163 and 220 – 245 that proceeds of RM7.791 million and RM13.018 million respectively were channeled from BPI to Ricky Wong's accounts through their nominee companies on the pretext of fictitious invoices. [150] These facts, evidencing Ricky Wong's personal knowledge, his key role as ultimate beneficiary, and the modus of using nominee companies and false invoices to siphon funds to his own accounts, provide a solid foundation to infer that Ricky Wong and his alter ego Wong SK Holdings had knowledge of and were the masterminds behind the fraudulent scheme perpetrated on BPI. [151] In this regard, I am guided by the principle enunciated by the House of Lords in Three Rivers District Council v Bank of England [2001] 2 All ER 513 that: “...since dishonesty is usually a matter of inference from primary facts, this involves knowing not only that he is alleged to have acted dishonestly, but also the primary facts which will be relied upon at trial to justify the inference.” [152] These primary facts pleaded by the SC, if proven at trial, are capable of establishing Ricky Wong's fraudulent intention. It is not fatal that the SC did not explicitly use the words “knowledge” or “intent to defraud” in respect of Ricky Wong and Wong SK Holdings. The pleadings disclose facts pointing towards their dishonest involvement which rise above mere facts consistent with innocence. [153] I therefore find that the SC has properly pleaded a good arguable case under Section 179(a) and (b) CMSA against Ricky Wong and Wong SK Holdings, by asserting primary facts which disclose their knowledge of and intention to carry out a fraudulent scheme against BPI. [154] In respect of Madam Teh, I am similarly satisfied that the SC has established a good arguable case that she had knowledge of and intention to defraud BPI through her involvement in authorising payments and her roles in the recipient entities. [155] The SC has specifically pleaded in at least 22 paragraphs of the Statement of Claim (paragraphs 17, 85, 86, 90, 91, 103, 104, 137, 140, 141, 144, 145, 148, 149, 184, 187, 191, 195, 223, 226, 230, 234) that Madam Teh signed a total of 71 cheques and payment vouchers to approve fictitious transactions from BPI to various nominee companies, amounting to RM56,074,500. [156] This is a significant number and quantum of fraudulent payments that Madam Teh is alleged to have personally authorised. The sheer volume and value of these fictitious disbursements provides a cogent basis to infer Madam Teh's knowledge that the payments were not genuine transactions, from which her intention to defraud can be inferred. [157] Furthermore, the Statement of Claim pleads Madam Teh's close nexus to several key nominee entities which received these fraudulent payments. Paragraph 19 avers that Madam Teh is a director, shareholder and bank signatory of Wong SK Holdings, which received RM9.3 million in siphoned proceeds. Paragraph 47(ii) pleads that Madam Teh was a director and bank signatory of Asia Media, and signed 23 cheques channeling RM9.035 million of BPI's ESOS proceeds to other nominee companies. Madam Teh is also pleaded to be a director of Transnet and shareholder of Havana Bayview, which collectively received millions in BPI funds. [158] Madam Teh's alleged control over bank accounts and directorships in multiple nominee companies which received and layered misappropriated BPI funds, when viewed together with her role in authorising numerous fictitious BPI payments to those entities, provides a strong prima facie case to infer her dishonest knowledge of and participation in the fraudulent scheme. [159] These primary facts pleaded rise well above assertions of mere innocent involvement, and are sufficient to constitute a good arguable case of Madam Teh's knowledge and fraudulent intent. As held by the Privy Council in Barlow Clowes International Ltd v Eurotrust International Ltd [2005] UKPC 37: “...a person who participated in a transaction 'contrary to normally acceptable standards of honest conduct' would be deemed to have dishonestly assisted the fraudulent transaction. It did not require that he should have had reflections about what those normally acceptable standards were.” [160] Here, the facts pleaded regarding Madam Teh's acts of approving tens of millions in fictitious payments to companies she had interests and roles in are sufficient, if established, to amount to conduct contrary to normally acceptable standards of honesty, from which knowledge and dishonest intent can be inferred. [161] I accept the SC's submission that these primary facts pleaded regarding Madam Teh's roles and involvement are sufficient at this stage to infer dishonest knowledge and intention, rising above mere facts consistent with innocence and showing her participation in the fraudulent scheme. The SC also rightly contends, relying on Pet Eastern (M) Sdn Bhd v Tay Young Huat & Ors [1999] 5 MLJ 558 (HC), that further evidence of Madam Teh's fraudulent intention and state of mind can be elicited at trial through viva voce evidence. The present assessment is only of whether a good arguable case is disclosed. [162] Therefore, in respect of all three Defendants, I am satisfied that the SC has properly pleaded primary facts which constitute a good arguable case that the Defendants had knowledge of and intention to perpetrate the fraudulent scheme against BPI under Section 179(a) and (b) CMSA. The express mentions of intent to defraud in the Statement of Claim and Amended Reply, together with the primary facts pleaded about the Defendants' culpable involvement, provide a clear basis to infer dishonest knowledge and intent at this interlocutory stage, even if dishonest state of mind is not explicitly averred in the pleadings. [163] On this issue I find that a good arguable case of fraudulent knowledge and intent has been established. Whether the common law test for a freezing injunction is not met because there is no evidence the Defendants received any pecuniary gain from the alleged wrongdoings. [164] Regarding Ricky Wong and Wong SK Holdings, the SC submits that the facts and evidence clearly show they obtained pecuniary gain from the alleged fraudulent scheme. The money trail demonstrates that proceeds from the BPI Corporate Exercises were siphoned through nominee companies and eventually paid into the bank accounts of Ricky Wong and Wong SK Holdings. [165] The SC contends that at the injunction stage, it need only establish a good arguable case that the Defendants obtained a pecuniary gain, with the full extent to be proven at trial. The threshold for a good arguable case is one that is more than barely capable of serious argument but not necessarily having a better than 50% chance of success. [166] In respect of Madam Teh, the SC argues there is a good arguable case that she received pecuniary gain as well. The facts show Madam Teh is the only other shareholder of Wong SK Holdings apart from Ricky Wong. Wong SK Holdings received RM9.3 million of proceeds from the nominee companies in the first round of ESOS. Madam Teh is also the only other shareholder of Havana Bayview, which owns the the immovable property at Four Seasons Place (“Four Seasons Property”) that was partially purchased with over RM3.5 million of proceeds from the schemes. [167] The SC submits that Madam Teh's argument that the lifting of seizure orders under AMLATFPUAA means there was no pecuniary gain is misconceived. The lifting of orders was at the discretion of the Public Prosecutor and merely indicates Madam Teh was not charged with a criminal offence under AMLATFPUAA at that point. The elements of an AMLATFPUAA offence are different from Section 179 CMSA and cannot be equated. [168] Therefore, the SC contends that based on the facts presented, it has established a good arguable case that all the Defendants received pecuniary gain from the alleged wrongdoing, meeting the common law test for a freezing injunction if it applies. The precise quantum is to be determined at the full trial. [169] Ricky Wong and Wong SK Holdings submit that the common law test for granting a freezing injunction against them is not satisfied because the SC has failed to provide any evidence that they received pecuniary gains from the alleged wrongdoings related to BPI's corporate exercises. [170] They argue that while the SC's case is that certain proceeds from the corporate exercises were received into Ricky Wong's accounts and Wong SK Holdings' account, this alone does not establish an unlawful pecuniary gain requiring a freezing injunction. They contend that the SC must demonstrate a clear tracing and nexus between those funds and the alleged fraudulent conduct under Section 179 [171] Ricky Wong and Wong SK Holdings further submit that for the SC to obtain final relief under Section 200(2)(a) CMSA in the form of recovering up to three times the pecuniary gain, it is incumbent on the SC to first establish the existence of such unlawful gain linked to the alleged Section 179 breaches. Without this critical evidence of illicit pecuniary gains, a key requirement for granting an interlocutory freezing injunction is fundamentally lacking. [172] Madam Teh argues that the freezing injunction must be discharged against her due to a complete absence of evidence that she personally received any pecuniary gains from the alleged fraudulent schemes related to BPI's corporate exercises. [173] She contends that the SC's own pleaded case demonstrates that the alleged unlawful gains of around RM56 million flowed into the accounts of her son Ricky Wong and Wong SK Holdings, but there are no allegations or evidence whatsoever that even a single cent ended up with her. [174] Madam Teh highlights that initially her accounts were frozen by the SC under the AMLATFPUAA, but subsequently the Public Prosecutor unconditionally released those accounts, signifying no proceeds of unlawful activities were found in her accounts. [175] She submits that without pleading and establishing that she personally derived any pecuniary benefit from the alleged wrongdoings, the SC cannot meet the standard for obtaining an interlocutory freezing injunction against her assets, as it would be obvious that final relief recovering illicit gains would be refused against her. [176] In essence, the Defendants argue the freezing injunctions must be discharged against them as the SC has failed to provide evidence of them receiving any unlawful pecuniary gains from the alleged breaches, which is a core requirement under common law principles for granting such relief. [177] Having carefully considered the submissions of both parties and the authorities cited, I find that the SC has satisfied the common law test for a freezing injunction, if it applies, by establishing a good arguable case that the Defendants received pecuniary gain from the alleged wrongdoings under Section 179 CMSA. [178] In respect of Ricky Wong and Wong SK Holdings, the evidence adduced by the SC, particularly the money trail, shows that proceeds from BPI's Corporate Exercises were transferred through nominee companies and eventually paid into bank accounts belonging to Ricky Wong and Wong SK Holdings. Specifically, the SC has pleaded in paragraph 3 of the Statement of Claim that Ricky Wong and/or Madam Teh made a pecuniary gain of RM46,774,500, while Madam Teh and/or Wong SK Holdings made a pecuniary gain of RM9,300,000. [179] In paragraph 54(iii) of the Statement of Claim it is pleaded: “A portion of the proceeds received by Ricky Wong was used as part payment for the purchase of Immovable Properties. Refer to Section G below;” [180] In paragraph 119 it is pleaded: “The SC's investigation showed that the proceeds raised by BPI from the Private Placement Exercise were paid to three nominee companies, Sierra Broadway, Warisan Serantau and Ikhtiar Syahdu, before eventually being transferred to Ricky Wong. A portion of the proceeds received by Ricky Wong was used as part payment for the purchase of Immovable Properties.” [181] The SC's pleadings and evidence establish a detailed money trail tracing how funds raised by BPI through the Rights Issue, Private Placement and ESOS exercises were siphoned out of BPI to Ricky Wong and Wong SK Holdings via multiple layers of nominee companies controlled by the Defendants. The SC pleaded in the Statement of Claim that a total of RM46,774,500 was transferred to Ricky Wong's personal accounts while RM9,300,000 was transferred to Wong SK Holdings. This illicit transfer of BPI's funds to Ricky Wong and Wong SK Holdings provides compelling evidence of them deriving substantial pecuniary gains from their alleged fraudulent scheme in breach of section 179 of the CMSA. [182] Section 179(a) of the CMSA makes it unlawful for any person to “use any device, scheme or artifice to defraud” while section 179(b) prohibits engaging in “any act, practice or course of business which operates or would operate as a fraud or deceit upon any person”, in connection with dealing in securities. The elaborate money trail evidencing the flow of funds from BPI through the Defendants' nominee companies and into Ricky Wong and Wong SK Holdings’ accounts fits squarely within the type of fraudulent conduct caught by section 179. [183] At this interlocutory stage, the SC does not need to conclusively prove the illegality of the gains, but must show at least a good arguable case. The detailed pleadings specifying the amount of RM46.7 million to Ricky Wong and RM9.3 million to Wong SK Holdings, supported by the money trail evidence, is more than sufficient to constitute a good arguable case that Ricky Wong and Wong SK Holdings derived pecuniary benefits from the alleged breaches of section 179 CMSA. This satisfies a key requirement for granting a freezing injunction. [184] The legal threshold for a good arguable case was correctly stated by the SC, relying on S&F International Ltd v Trans-Con Engineering Sdn Bhd [supra], as being one that is more than barely capable of serious argument but not necessarily having a better than 50% chance of success. The SC argues that at this stage, it need only establish a good arguable case of pecuniary gain, with the precise quantum to be proven at trial. I am satisfied the facts presented by the SC meet this standard in relation to Ricky Wong and Wong SK Holdings. [185] I do not accept Ricky Wong and Wong SK Holdings’ contention that the SC must conclusively establish the existence and precise quantum of unlawful pecuniary gains at this interlocutory stage in order to obtain a freezing injunction. The authorities are clear that the applicant need only show a good arguable case, with the merits to be determined at the full trial. The SC's pleaded case and the evidence of funds flowing into Ricky Wong and Wong SK Holdings’ accounts are sufficient to raise a serious question to be tried regarding receipt of illicit gains. [186] As for Madam Teh, while the evidence of direct receipts is less obvious, the SC has nonetheless shown a good arguable case that she obtained a pecuniary benefit as well. The SC highlighted that Madam Teh is the only other shareholder of Wong SK Holdings apart from her son Ricky Wong, and Wong SK Holdings received RM9.3 million from the nominee companies in the 1st Round of ESOS. [187] Further, Madam Teh is the only other shareholder of Havana Bayview, which owns the Four Seasons Property that was partially purchased with over RM3.5 million of allegedly illicit proceeds. Although not directly received by Madam Teh, these facts are sufficient to establish an arguable case that she benefited as a shareholder and part owner of the property. [188] I agree with the SC that the lifting of seizure orders against Madam Teh under the AMLATFPUAA does not negate an arguable case of receiving pecuniary benefits under Section 179 CMSA. The cessation of seizure orders under section 52A of the AMLATFPUAA is entirely distinct and separate from a civil action by the SC under the CMSA. [189] Under section 52A of the AMLATFPUAA, a seizure order will expire within 12 months if the person is not charged with an offence under that Act. The Public Prosecutor's decision not to charge Madam Teh and the subsequent expiry of the seizure order was made in the context of potential criminal proceedings under AMLATFPUAA. It does not amount to a finding that Madam Teh did not receive any pecuniary gains, especially in the context of a civil action under the [190] The legal elements that the SC must establish in a civil claim under section 200 read with section 179 of the CMSA are substantially different from the criminal elements under AMLATFPUAA. While a prosecution under AMLATFPUAA would require proof beyond reasonable doubt of money laundering offences, a civil claim under CMSA requires only proof on a balance of probabilities that the defendant contravened section 179 and received a pecuniary gain. Further, section 200(1) of the CMSA makes clear that such civil proceedings can be commenced “whether or not that person has been charged with an offence in respect of the contravention, or whether or not a contravention has been proved in a prosecution.” [191] Therefore, the decision not to prosecute Madam Teh under AMLATFPUAA does not preclude a finding of liability in a civil action under CMSA based on different elements and a lower standard of proof. The SC has adduced evidence showing a good arguable case that Madam Teh received pecuniary benefits as a shareholder of companies that received funds originating from BPI. The release of the seizure order does not detract from this. [192] In Lei Lin Thai v Public Prosecutor [2016] 9 MLJ 631 (HC), Nordin Hassan J (as he then was) held that since a prosecution under AMLATFPUAA is exercisable by the public prosecutor whereas a civil action under CMSA is exercisable by the SC, there can be no issue of discrimination or double jeopardy as these are different parties exercising distinct powers under separate statutes. Similarly here, the expiry of seizure orders under one statute does not affect the SC's right to seek civil remedies under the other. [193] In conclusion, based on the evidence presented, I find that the SC has met its burden of establishing a good arguable case that each of the Defendants received pecuniary gains from the alleged wrongdoings, thereby fulfilling this particular common law requirement for granting a freezing injunction, if it applies. The precise amount and nexus of such gains is a matter to be determined at the full trial. The Defendants' submissions to the contrary are rejected. Whether there is risk of dissipation of assets by the Defendants to satisfy the common law requirement for a freezing injunction. [194] Regarding Ricky Wong, the SC submits that his conduct in causing the sudden change in beneficial ownership of Spade Assets Limited (“Spade Assets”) after having knowledge of the Ex Parte Injunction Order obtained by the SC on 8.5.2020 and served on 11.5.2020 is clear evidence of a real risk of dissipation of assets. This attempt to put assets beyond the reach of the injunction had already occurred. [195] The SC further argues that for all Defendants, an inference of risk of dissipation can be drawn from the elaborate and dishonest nature of the alleged fraud itself to siphon RM56 million from BPI. With such large sums at stake, there is a real likelihood the Defendants would try to put assets out of reach to preserve their own interests. [196] In respect of Madam Teh specifically, the SC contends her conduct demonstrates a lack of probity and honesty, and prima facie dishonesty, which case law has established is sufficient to infer a real risk of dissipation. This includes her involvement in signing 71 cheques and payment vouchers totaling over RM56 million for fictitious transactions in her capacity as an authorised signatory of BPI. Furthermore, she holds positions as a director, shareholder, and signatory of Wong SK Holdings and Asia Media, entities that received proceeds from the fraudulent activities. Additionally, Madam Teh is a shareholder of Havana Bayview, which utilised RM3.5 million in proceeds to acquire a property. [197] The SC submits that a real risk of dissipation can be legitimately inferred from such dishonesty if it has a material bearing on the risk. The nature of the fraud and Madam Teh's involvement in the scheme meets this threshold. [198] Therefore, the SC argues that the Defendants' conduct in the alleged fraud is sufficient to establish a real risk of dissipation of assets, satisfying the common law requirement for a freezing injunction against each of them. [199] Ricky Wong and Wong SK Holdings submit that the SC has failed to provide any cogent evidence demonstrating a real risk of them dissipating or improperly dealing with their assets. [200] They argue that mere allegations of dishonest conduct alone cannot establish a risk of dissipation, without specifically connecting that dishonest conduct to a risk that their own assets will be dissipated to frustrate any final judgment. [201] They contend that the SC's pleadings do not disclose any factual basis to infer a risk of dissipation by them. The pleadings merely allege their involvement in receiving proceeds from BPI's corporate exercises, without any assertion that they intended to fraudulently divert or dissipate those funds for their own benefit. [202] Furthermore, Ricky Wong and Wong SK Holdings submit that the SC cannot simply rely on the purported risk of dissipation by Ricky Wong as a basis to also freeze the separate assets of Wong SK Holdings, which is a distinct legal entity. [203] Madam Teh argues that the SC has completely failed to demonstrate any real risk of her dissipating or improperly dealing with her assets. [204] She highlights that after the AMLATFPUAA freezing orders over her accounts were lifted on 1.4.2020, her accounts remained unfrozen for over a month until the ex parte injunction on 8.5.2020. However, during this intervening period when she could freely access and transfer her funds, Madam Teh did not make any attempts to dissipate or dispose of her assets. [205] Madam Teh contends that this conduct clearly negates any suggestion of a risk of dissipation on her part. She submits that if she truly intended to dissipate assets, she would have done so during the period her accounts were temporarily unfrozen rather than leaving the funds untouched. [206] She also argues that the SC's pleaded case itself does not allege any facts from which to infer a risk of dissipation specifically by her. The allegations pertain only to her acting as a signatory for BPI, without any assertion that she did so with fraudulent intent to facilitate dissipation for her own benefit. [207] Additionally, Madam Teh submits that she cannot be held responsible for any purported risk of dissipation by her adult son, Ricky Wong. As a separate individual, she argues freezing her assets cannot be justified by the alleged risk posed by another defendant's actions. [208] In essence, the Defendants contend there is an absence of evidence demonstrating a real risk of them dissipating assets, which is a core requirement for granting a freezing injunction under common law principles. [209] Having carefully considered the submissions of both parties and the authorities cited on the issue of whether there is a real risk of dissipation of assets by the Defendants to justify granting a freezing injunction, I find that the SC has established a real risk of dissipation by Ricky Wong, Wong SK Holdings and Madam Teh on a balance of probabilities. [210] In respect of Ricky Wong, I accept the SC's submission that his conduct in causing a change in the beneficial ownership of Spade Assets shortly after being served the Ex Parte Injunction Order on 11.5.2020 is clear evidence of an attempt to put assets beyond the reach of the injunction. [211] The SC has adduced evidence that Spade Assets is a company incorporated in the British Virgin Islands (BVI) of which Ricky Wong was the sole beneficial owner from the date of incorporation on 12.10.2015 until 16.3.2020. Spade Assets holds a bank account in Luxembourg with a balance of approximately EUR4.8 million as of 18.5.2020. While the Register of Members shows Ricky Wong's sole share in Spade Assets was transferred to his brother David Wong on
16.3.2020, making David Wong the sole shareholder on paper, there are reasons to believe this change in beneficial ownership may have been backdated. [212] Crucially, Spade Assets' BVI registered agent was only made aware of and instructed to change the beneficial ownership to David Wong in June 2020, after the Ex Parte Injunction Order was served on Ricky Wong on 11.5.2020. By letter dated 17.7.2020, the BVI Financial Services Commission confirmed to the SC that the instruction on 15.6.2020 to change the principal contact of Spade Assets to David Wong constituted a request to change the beneficial owner to David Wong. This attempt to put the EUR4.8 million beyond the reach of the injunction, which on the evidence occurred after Ricky Wong had notice of the order, shows a clear willingness on his part to take steps to dissipate his assets and frustrate the SC's recovery efforts. [213] In my view, real risk of dissipation can be established by a defendant taking action after he has become aware of a claim against him to put assets out of reach of execution. Here, the timing of the change in Spade Assets' beneficial ownership immediately after service of the Ex Parte Injunction Order is highly suggestive of an attempt by Ricky Wong to put assets out of the SC's reach once he became aware of the SC's claim. [214] This single fact alone is sufficient to establish a real risk of dissipation of assets by Ricky Wong, as it demonstrates that given the opportunity, he is likely to take active steps to dissipate his assets and stymie enforcement of any judgment the SC may obtain against him. Where, as here, there is evidence of an actual attempt at dissipation upon notice of a claim, the court will readily infer a real risk of further dissipation and grant a freezing injunction to preserve assets. No further evidence of risk is required. [215] Therefore, based on Ricky Wong's conduct in relation to Spade Assets, I find there is a clear real risk of dissipation of assets by him to justify a freezing injunction in the SC's favor over his assets. [216] I also agree with the SC that an inference of risk of dissipation can be drawn against all the Defendants from the elaborate and dishonest nature of the alleged fraud itself to siphon RM56 million from BPI. [217] The fraudulent scheme pleaded by the SC involves the Defendants orchestrating three corporate exercises by BPI - a rights issue, a private placement, and two rounds of the ESOS - to raise a total of RM68.6 million. However, instead of the proceeds being utilised for their stated purposes, RM56 million was diverted through sham transactions to nominee companies controlled by the Defendants before being paid into the Defendants' personal bank accounts. The SC alleges the Defendants used fictitious invoices, purportedly issued by suppliers for goods sold to BPI, to lend a veneer of legitimacy to the sham payments. However, the named suppliers have denied any such transactions with BPI or the nominee companies. [218] If these allegations are proven at trial, the fraud perpetrated on BPI would be exceedingly elaborate, spanning three separate corporate exercises over two years and involving multiple layers of entities to disguise the misappropriation of a substantial sum exceeding RM56 million. Such a complex and sophisticated scheme to defraud BPI and its investors of this magnitude is indubitably dishonest conduct that lacks any probity. The Court of Appeal in Ang Chee Huat v Engelbach Thomas Joseph [1995] 2 MLJ 83 held that conduct “lacking in probity and honesty” can justify a finding of risk of dissipation. In this case, the respondent, a foreigner residing in the US, alleged that the appellant induced him to give RM500,000 by falsely representing it was required by the Malaysian Industrial Development Authority to obtain pioneer status for a company they intended to incorporate jointly, and that the appellant claimed to have used the money as part payment to purchase a piece of land to be jointly owned, but the land was actually registered in the name of a company where the appellant was a shareholder and director. The Court of Appeal dismissed the appeal against a Mareva injunction granted against the appellant, finding that there was a real risk of the appellant dissipating his assets given his conduct "lacking in probity and honesty". Zakaria Yatim JCA (as he then was) held: “Having considered the evidence, I am of the view that the conduct of the appellant in this matter is lacking in probity and honesty. In the circumstances, I conclude that there is a real risk that the assets of the appellant will dissipate should the respondent succeed at the trial.” [219] The alleged BPI fraud would fall squarely within the type of conduct described by the Court of Appeal as “lacking in probity and honesty” from which a risk of dissipation can be inferred. The complexity and scale of the fraud, involving numerous related parties and fabricated documents, is highly suggestive of “underhand” conduct by the Defendants to “secrete” BPI's assets for their own benefit. [220] Given the substantial sum of RM56 million at stake which the Defendants are alleged to have misappropriated, I accept it is reasonable to infer the Defendants would be inclined to further dissipate those assets to preserve their illegitimate gains against the SC's recovery action. The elaborate lengths the Defendants appear to have gone to perpetrate the fraud and conceal their involvement evince an intention to put those funds beyond reach. [221] Hence, I find that the dishonest and highly complex nature of the alleged fraud itself, as pleaded by the SC, supports an inference that the Defendants pose a real risk of dissipating the misappropriated assets, justifying a freezing injunction over those sums. Madam Teh's conduct as pleaded further supports an inference of risk of dissipation on her part individually. [222] The SC has adduced evidence showing Madam Teh's integral involvement in the fraudulent scheme in her capacity as an authorised signatory of BPI. She is alleged to have personally signed 71 BPI cheques and payment vouchers totaling over RM56 million that were paid out to the Defendants' nominee companies based on fictitious transactions. The sheer number and value of these fraudulent payments which Madam Teh approved highlights her central role in siphoning funds out of BPI. [223] In addition, Madam Teh held positions in several of the nominee companies that received the misappropriated funds. She was a director, shareholder and bank signatory of both Wong SK Holdings and Asia Media. The SC has specifically pleaded that Wong SK Holdings received RM9.3 million from the first round of the ESOS, while Asia Media received RM9.035 million. In Asia Media's case, Madam Teh allegedly signed a further 23 cheques that were used to layer RM9.035 million of the ESOS proceeds to other nominee companies. Madam Teh is also said to be a shareholder of Havana Bayview, which used RM3.5 million of the misappropriated monies to purchase a property. [224] Viewed collectively, these acts by Madam Teh in approving numerous fraudulent payments and holding key positions in multiple nominee companies that received and dealt with the proceeds display prima facie dishonest conduct and a glaring lack of probity on her part. Case law has recognised that such dishonest conduct by a defendant raises an inference of real risk of dissipation. [225] In Amixco Asia Pte Ltd v Bank Negara Indonesia 1946 [1991] 2 SLR(R) 713 a dispute arose over the delivery of plywood goods to an Egyptian buyer, where the defendant and a freight forwarder were alleged to have conspired to convert the goods. The Singapore Court of Appeal found there was “overwhelming objective evidence of prima facie dishonest conduct” by the Defendants, such as detaining the plaintiff's equipment without consent and failing to pay over progress payments, which indicated “the probity of the defendant could not be relied on” and “the risk of dissipation was not just a mere possibility, but almost a certainty”. [226] Similarly, in Petowa Jaya Sdn Bhd v Binaan Nasional Sdn Bhd [1988] 2 MLJ 261, a case involving a Mareva injunction sought by the plaintiff, a sub-contractor for certain roadworks, against the defendant main contractor who had terminated their contract and failed to pay the plaintiff its share of progress payments, the High Court held the defendant's undisputed detention of the plaintiff's equipment without consent and 98% of progress payments owed to the plaintiff demonstrated “there was solid evidence that the probity of the defendant could not be relied on”, and hence “the defendant would, far more probably than not, dissipate the agreed retention sum in question without paying it to the plaintiff”. [227] The case of Zarina bt Sharil & Anor v Chiong Chuan Hwa & Ors [2008] MLJU 608 was about the plaintiffs' claim for the return of monies they had invested with the 1st defendant on behalf of numerous persons in a scheme known as a "hedge fund" through a company registered in the Cayman Islands. The High Court found a real danger of dissipation based on “overwhelming objective evidence of prima facie dishonest conduct” by the Defendants, including the illegal nature of their investment scheme flouting the Banking and Financial Institutions Act 1989, as well as their failure to pay dividends and guaranteed principal sums to the plaintiffs under the investment agreements. [228] By parity of reasoning, the prima facie evidence of Madam Teh's pervasive role in the dishonest scheme, through signing 71 fraudulent BPI cheques and payment vouchers for over RM56 million as well as holding positions in multiple nominee companies that received and dealt with RM21.835 million of the misappropriated funds, gives rise to a real inference that she cannot be trusted to preserve her assets to meet any potential judgment against her. Her unprincipled conduct suggests an unscrupulous character who would not hesitate to dissipate her assets to avoid satisfying a judgment debt. [229] Here, the fraudulent BPI payments authorised by Madam Teh and her controlling positions in various nominee companies that dealt with the proceeds constitute strong prima facie evidence of fraud that casts serious doubt on her probity. There is solid evidence that Madam Teh's integrity could not be relied on, as she appears to have been an integral facilitator of the elaborate fraud on BPI. Her role in layering the misappropriated funds through multiple entities also suggests an intention to conceal the true nature of the scheme. [230] In the circumstances, Madam Teh's dishonest conduct and lack of probity in relation to the alleged fraud is sufficient to ground a real inference that she poses a risk of dissipating her assets to avoid liability. As the authorities above establish, evidence of such fraudulent and dishonest dealings by a defendant will generally raise an inference of risk of dissipation. No further proof of Madam Teh's actual intent to dissipate is required. [231] Therefore, based on Madam Teh's prima facie dishonest conduct as pleaded, I find there is a clear basis to infer a real risk of dissipation of assets on her part to justify a freezing injunction against her. [232] The Singapore Court of Appeal's decision in Bouvier, Yves Charles Edgar and another v Accent Delight International Ltd and another and another appeal [2015] 5 SLR 558 provides a helpful framework for analysing when allegations of dishonesty can justify inferring a real risk of dissipation. The court explained that while mere allegations of dishonesty alone are insufficient, a real risk of dissipation can be legitimately inferred if the nature of the alleged dishonesty has a material bearing on that risk. [233] Specifically, the Court of Appeal cited the English High Court decisions in Madoff Securities International Ltd v Stephen Ernest John Raven [2011] EWHC 3102 and Jarvis Field Press Ltd v Chelton [2003] EWHC 2674, although these were distinguished and not followed. Madoff Securities involved a massive Ponzi scheme perpetrated by Bernard Madoff over many years, where he defrauded investors of billions of dollars through his investment advisory business. The English High Court found that the Defendants' alleged conduct of issuing sham invoices to disguise payments over many years “demonstrates in itself a serious risk of dissipation”, as it showed “deliberate wrongdoing” and suggested a propensity to conceal assets. [234] Similarly, in Jarvis Field Press which involved allegations that a director of the claimant company, made numerous unauthorised and unlawful payments totaling over £800,000 from the company's assets between 1999 and 2001, the court granted a freezing order against her assets up to £1.5 million due to the risk of dissipation arising from her alleged dishonest conduct and the impending misfeasance proceedings against her for around £14 million. The English High Court held there was a real risk of dissipation where the defendant had allegedly engaged in a “consistent and determined fraud” by extracting significant sums from the plaintiff company “in a devious and secret way, utilising in effect a secret account, with a total absence of disclosure”. The court found that a defendant guilty of “dishonesty in financial dealings in relation to the use or misuse of assets” presented an appreciable risk of taking steps to put assets out of reach. [235] Applying this reasoning to the facts here, I find that the nature of Madam Teh's alleged dishonesty, as pleaded by the SC, bears a clear and material nexus to the risk of dissipation. The SC's case is that Madam Teh was an integral facilitator of an elaborate scheme to defraud BPI of over RM56 million. She allegedly personally signed 71 BPI cheques and payment vouchers for fraudulent transactions to siphon funds to the Defendants. She then allegedly layered over RM21 million of the misappropriated proceeds through nominee companies in which she held controlling positions as director, shareholder and signatory. [236] This is closely analogous to the facts in Madoff Securities and Jarvis Field Press. As in those cases, Madam Teh's alleged role in authorising numerous fraudulent transfers and funneling proceeds through multiple vehicles evinces a high degree of financial sophistication and a concerted effort to disguise the movement of funds. Her conduct in the alleged fraud itself suggests a propensity to conceal assets and engage in complex machinations to put monies beyond reach. Following the reasoning endorsed by the Court of Appeal in Bouvier, these allegations of dishonest dealings, if true, have a direct and material bearing on the risk that Madam Teh lacks probity and cannot be trusted to preserve her assets to meet any judgment. [237] I do not accept Madam Teh's argument that her failure to dissipate assets during the one month period her accounts were unfrozen from 1.4.2020 to 8.5.2020 negates any risk of dissipation on her part. [238] Madam Teh's accounts were previously frozen by the SC pursuant to an order obtained under the AMLATFPUAA. This order was then revoked by the Public Prosecutor on 1.4.2020, lifting the freeze over the accounts. Madam Teh contends that her failure to transfer funds out of those accounts from then until 8.5.2020, when the SC obtained the present ex parte injunction, shows she had no intention to dissipate her assets and therefore poses no real risk of doing so. [239] However, the mere fact that Madam Teh did not visibly dissipate assets during this brief one month interregnum period cannot displace the clear inference of a real risk of dissipation that arises from the nature and extent of her involvement in the overall fraudulent scheme, as pleaded by the SC. A holistic assessment of Madam Teh's conduct in relation to the misappropriation of BPI funds raises a clear inference of a real likelihood that she would deal with her assets improperly to defeat the SC's claim, notwithstanding what she may or may not have done in that one specific month. [240] Here, Madam Teh's role in authorising over RM56 million in sham payments out of BPI to nominee companies controlled by her and the other Defendants establishes a “reasonable chance” and “real risk” that she would take similar steps to put her own assets beyond the SC's reach, even if she refrained from doing so in the immediate aftermath of the first freezing order being lifted. The elaborate nature of the fraud itself suggests long-term planning to conceal the Defendants' unlawful gains, which would not be consistent with Madam Teh immediately dissipating funds during the narrow window when the SC would be most likely to scrutinise her accounts. [241] There is also nothing to suggest that Madam Teh was aware during the period of 1.4.2020 to 8.5.2020 that the SC intended to seek a further injunction against her under the CMSA. Based on the timing, it is entirely plausible that Madam Teh, knowing the SC was already investigating her for money laundering, would refrain from any overtly suspicious transactions during that brief time to avoid drawing further regulatory attention. She had no way of knowing then that the SC would re-freeze her accounts so quickly after. [242] As such, I find that Madam Teh's lack of apparent dissipation in the one month after the first freezing order was lifted has minimal bearing on the overall assessment of the real risk of dissipation she poses. It does not detract from the broader inference of risk that arises from the extent of her involvement in the scheme to defraud BPI. To hold otherwise would be to place undue weight on her conduct in that narrow timeframe without properly considering the totality of the circumstances. The court is entitled to assess the risk of dissipation holistically, which in this case supports the grant of a freezing injunction over Madam Teh's assets notwithstanding the lack of visible dissipation during that one month period. [243] I also reject the contention by Ricky Wong and Wong SK Holdings that the SC's pleadings fail to establish a risk of dissipation by them. The facts pleaded by the SC clearly particularise how they received and dealt with the proceeds of the fraudulent transactions. In Wong SK Holdings' case, it is specifically pleaded to have received RM9.3 million of the misappropriated BPI funds. These facts support an inference that they intended to divert the funds for their own benefit, which in turn gives rise to a real risk of dissipation. It is not necessary for the SC to plead some further specific assertion of an intent to dissipate. Such an intent can be inferred from the dishonest nature of their dealings with the proceeds. [244] Similarly, there is no merit to Madam Teh's argument that the SC's case fails to plead any facts suggesting a risk of dissipation by her specifically. The facts particularised above regarding her role in authorising fictitious payments as a signatory of BPI, and her positions in the nominee companies that received the proceeds, are sufficient to ground an inference of risk of dissipation on her part. It does not matter that the pleadings do not allege that Madam Teh facilitated the transactions with the specific intention of dissipating the proceeds for her own benefit. The dishonest nature of the transactions she authorised is sufficient to give rise to the necessary inference of risk. [245] Finally, I accept the SC's submission that it is entitled to rely on the risk of dissipation by each defendant individually to support a group-wide freezing injunction against all of them. [246] Ricky Wong, Wong SK Holdings and Madam Teh have argued that the court cannot grant a blanket freezing injunction over the assets of all three defendants based on a purported risk of dissipation by only one or some of them. They contend that as separate legal personalities, the risk posed by each defendant must be assessed individually, and that an injunction can only be granted against those defendants who are specifically shown to present a real risk of dissipation on the available evidence. [247] However, I agree with the SC that the court is not precluded from granting a group-wide injunction over all the Defendants' assets if the circumstances warrant it, notwithstanding their separate legal personalities. Where, as in the present case, the Defendants are alleged to have been knowing participants in a common fraudulent scheme, the court is entitled to assess the risk of dissipation holistically across all of them. [248] Here, the fraud perpetrated on BPI is alleged to have been carried out by the Defendants acting in concert, with each of them playing a crucial role in the overall scheme. Ricky Wong orchestrated the BPI corporate exercises to get the funds paid out to the nominee companies, Wong SK Holdings and other such nominees received those funds, and Madam Teh approved the fraudulent transfers in her capacity as a BPI signatory. If proven, this would mean the Defendants had all the knowledge of the fraud and participated in it as a group. [249] In those circumstances, I accept the SC's argument that the high degree of co-ordination and knowledge sharing between the Defendants supports an inference that the real risk of dissipation posed by any one of them would realistically extend to the rest of the group as well. Given their alleged close co-operation and presumed knowledge of each other's actions, there is a sufficient basis to infer that Ricky Wong, Wong SK Holdings or Madam Teh would leverage their collective resources to dissipate assets and stymie enforcement regardless of which one of them directly undertakes the dissipation. They each have a common interest in preserving the misappropriated BPI funds. [250] As such, the court is fully entitled, and indeed ought to consider the risk of dissipation in respect of the Defendants holistically in determining whether a group-wide injunction is warranted. To hold otherwise and require the risk to be assessed strictly by reference to each defendant as a separate legal person would undermine the court's ability to grant effective relief in cases involving group participation in fraudulent schemes. [251] In the present case, the nature and extent of the three Defendants' alleged knowing involvement in the BPI fraud is sufficient to warrant assessing the risk of dissipation in respect of them as a whole. I therefore find that the real risk of dissipation established in respect of each defendant individually can properly be relied on to support a group-wide injunction over all their assets. [252] For all the above reasons, I am satisfied the SC has established a real risk of dissipation of assets by the Defendants, both collectively and individually, sufficient to warrant the grant of a freezing injunction against each of them under the common law principles governing such orders. Whether the upper limit of RM169 million set for the freezing injunction is excessive and oppressive. [253] Regarding Madam Teh, the SC submits that the upper limit of RM169 million for the freezing injunction against her is neither excessive nor oppressive. The SC argues that its claim against Madam Teh is on a joint and several basis along with the other Defendants. Under the principle of joint and several liability, the SC contends it has the right to pursue the full claimed sum against any one or all of the liable Defendants. Therefore, the quantum of the injunction against Madam Teh should not be measured against her specific shareholding in Wong SK Holdings, but rather the entirety of the SC's claim. [254] The SC further submits that it is entitled to a freezing injunction for the total claimed sum upon satisfying the relevant requirements, notwithstanding Madam Teh's shareholding. This is to avoid the risk of any judgment not being satisfied due to a reduction in the injunction sum. [255] In respect of Ricky Wong and Wong SK Holdings, the SC notes their argument that the injunction against them is oppressive as the sum claimed against them individually is less than RM169 million. However, the SC points out that the court has the discretion to vary or reduce the quantum of the injunction at the inter partes stage if it is persuaded that the sum is excessive. [256] Ricky Wong and Wong SK Holdings submit that the freezing sum of RM169 million against them is oppressive and disproportionate to the SC's own pleaded case. [257] They argue that this sum exceeds the total alleged unlawful gains of around RM56 million that the SC claims flowed into Ricky Wong's accounts and Wong SK Holdings' account from BPI's corporate exercises. [258] They contend that the RM169 million figure appears to include not just the alleged gains, but also a multiplier of three times that amount as well as potential RM1 million civil penalties under Section 200(2) CMSA. However, Ricky Wong and Wong SK Holdings submit that the imposition of such multipliers and penalties is discretionary and lies within the court's purview at the final stage. They argue the SC cannot pre-emptively multiply the alleged gains and claim a freezing order for the inflated sum before the court exercises its discretion on penalties. [259] Furthermore, they contend that freezing injunctions are aimed at preventing dissipation to frustrate a final judgment sum, not securing payment of discretionary penalties imposed separately by the court. [260] As such, they argue the freezing sum against them should be limited to the alleged unlawful gains of RM56 million pending final determination, rather than extending to the discretionary punitive elements. [261] Madam Teh submits that the RM169 million freezing sum against her assets is staggeringly excessive, oppressive and disproportionate. [262] She highlights that based on the SC's own case, the alleged unlawful gains of RM56 million flowed into her son Ricky Wong's accounts and Wong SK Holdings, with no allegation or evidence that even a single sen reached her personally. [263] Madam Teh further points out that her interest in Wong SK Holdings is merely holding 1 share out of 100,000 shares, which she holds on Ricky's behalf. Therefore, her maximum potential unlawful gain based on that 0.001% shareholding would only amount to around RM543. [264] She argues that setting a freezing sum of RM169 million against her, which includes punitive multipliers and discretionary penalties, is blatantly oppressive and cannot be justified when the SC's own case demonstrates her alleged gain is a tiny fraction of that amount. [265] Madam Teh contends that maintaining such a grossly disproportionate freezing sum against her would be an injudicious exercise of the court's discretion. [266] In essence, the Defendants submit that the RM169 million freezing limit is oppressive as it significantly exceeds the alleged unlawful gains based on the SC's pleaded case, and extends improperly to discretionary punitive elements which have no certainty at this interlocutory stage. [267] Having carefully considered the submissions of both parties and the authorities cited, I find that the upper limit of RM169 million set for the freezing injunction against all the Defendants is neither excessive nor oppressive in the circumstances of this case. [268] Paragraph 7 of the Statement of Claim states that the SC is claiming, among other things, payment of three times the gross pecuniary gains received by the Defendants as a result of violating Sections 179(a) and/or 179(b) CMSA, as well as civil penalties, pursuant to Sections 200(2)(a) and 200(2)(b) of the same Act. The SC's claim against the Defendants for this is on a joint and several basis, as clearly pleaded in paragraphs 262(ii) the Statement of Claim. [269] The well-established principle of joint and several liability has been recently affirmed by the Federal Court in Lembaga Kumpulan Wang Simpanan Pekerja v Edwin Cassian a/l Nagappan @ Marie [2021] 5 MLJ 253, where Nallini Pathmanathan FCJ elucidated: “Joint and several liability gives rise to one joint obligation and to as many several obligations as there are joint and several promisors ...the promisor who has discharged the liability may then seek a proportionate share from each of the other debtors. The creditor however is at liberty to go against any one or all of the debtors.” [270] The effect of joint and several liability was further explained by the High Court in Herukh Thakurdas Jethwani & Anor v Bank Simpanan Nasional [2021] 8 MLJ 407, where Ong Chee Kwan JC (as he then was) held: “As a joint obligation, all the obligors are obligated to perform the entirety of the obligation when called upon by the creditor... it will be clear that the Court of Appeal was not setting down general principle that a judgment creditor can only enforce as against each of the joint judgment debtors no more than his or her respective aliquot share of the judgment sum.” [271] Flowing from these authorities, the SC is entitled, upon obtaining judgment, to pursue and enforce the entire judgment sum against any one or more of the jointly and severally liable Defendants, regardless of their individual shareholdings, interests or specific receipt of funds from the impugned transactions. The Defendants' respective portions of liability inter se does not affect or limit the SC's right of recovery against each of them for the whole sum. [272] Therefore, I am in full agreement with the SC's submission that the upper limit of the freezing injunction against each Defendant individually should be referenced to the totality of the SC's claim, and not apportioned based on their specific interests or alleged gains. Support for this approach can be found in the High Court case of Jasa Keramat Sdn Bhd v Monatech (M) Sdn Bhd [1999] 4 MLJ 217, where Jeffrey Tan J held: “The objective of a Mareva injunction is to remove that risk and danger, and that objective would not be achieved if the judgment or award in favour of a plaintiff with a Mareva injunction would yet remain unsatisfied, because of the reduction of the Mareva sum.” [273] Adopting the rationale in Jasa Keramat, fragmenting or reducing the injunction sum against each Defendant based on their specific shareholding or receipt of monies would undermine the very purpose and efficacy of the freezing injunction to preserve assets to meet any eventual judgment for the entire sum. The quantum must therefore be pegged to the totality of the SC's claim on a joint and several basis, to achieve its intended objective and avoid the risk of any part of the judgment remaining unsatisfied due to diminution of the injunction sum. [274] The SC has provided persuasive case law from Singapore, the US and Australia to demonstrate that in determining the quantum of civil penalties, courts in these jurisdictions consider factors such as the severity of the violation, culpability of the Defendants, remorse shown, efforts to repay misappropriated funds, and whether the conduct involved dishonesty. [275] In the Singapore High Court case of Monetary Authority of Singapore v Wang Boon Heng and another [2017] SGHC 268, the court held that in assessing a civil penalty under section 232 of the Securities and Futures Act (Cap 289, 2006 Rev Ed), which allows for a penalty of up to 3 times the amount of the profit gained or loss avoided, the following factors should be considered: “[60] ...The first broad category of factors encompasses those that relate to the severity of the violation in question. The following non-exhaustive factors can be taken into account:
the mechanics and degree of sophistication of the defendant's conduct;
the actual or potential impact of the defendant's conduct on the market; ...
the scale, frequency and duration of the violations;” [61] Next, the court should consider factors relating to the culpability of the defendant. Culpability is the measure of “the degree of relative blameworthiness disclosed by an offender's actions”...These factors are in my view offence-specific and may include:
whether the defendant's conduct is a deliberate or flagrant disregard for the law (as opposed to mere carelessness);
whether there is evidence of dishonesty on the part of the defendant, such as the deliberate concealment of his conduct aimed at avoiding detection, or the destruction of incriminating evidence; [62] ...the court should consider other general aggravating and mitigating factors which are not offence-specific, including, but not limited to, the following:
whether the defendant showed remorse or contrition, evidenced for example by a voluntary admission of wrongdoing, a sincere apology, not contesting proceedings on liability leading to savings of time or cost, or voluntary restitution of losses caused to third parties;” [276] Similarly, in the US, courts have considered factors like the egregiousness and repeated nature of the violations, efforts at concealment, and the defendant's culpability in determining the quantum of civil penalties under the Securities Exchange Act 1934. For example, in SEC v Michael Sargent 329 F 3d 34 (1st Cir, 2003), the court stated: “[14] ...In evaluating whether or not to assess civil penalties, a court may take seven factors into account, such as:
the egregiousness of the violations;
the isolated or repeated nature of the violations;...
whether the defendant concealed his trading...” [277] The Australian courts have also considered similar factors like the nature and extent of the contravention, the circumstances in which it took place, loss or damage suffered, and whether the conduct involved dishonesty, in determining pecuniary penalties under section 1317G of the Corporations Act 2001. This can be seen in the case of ASIC v Adler [2002] NSWSC 483 where the court summarised the relevant principles as follows: “(i) The pecuniary penalty has a punitive character, but it is principally a personal and general deterrent...
Factors leading to the order of a penalty...included: — Defendant was aware of impropriety of actions ... — Cases classed as being serious misconduct” [278] Applying the factors set out in these foreign authorities to the present case, I am of the view that the severity and complexity of the Defendants' misconduct warrants the imposition of the maximum 3 times multiplier under section 200(2)(a) of the CMSA, which provides: “(2) If the court finds that a person has contravened a relevant requirement, the court may, without limiting any other penalty that may be imposed, make an order requiring the person to pay a civil penalty to the Commission, of an amount not exceeding—
in the case of a corporation, three million ringgit; or
in the case of a person other than a corporation, one million ringgit.” [279] Applying these factors to the instant case, I am satisfied that imposing the maximum 3 times multiplier is justified. The severity of the violations is evident from the elaborate scheme allegedly perpetrated by the Defendants, involving the siphoning of over RM56 million through multiple corporate exercises, nominee companies and suppliers. The high degree of culpability of the Defendants can be inferred from the active steps taken to defraud BPI. [280] The SC has adduced cogent evidence of the convoluted money trail in respect of the four impugned transactions by the Defendants, involving the siphoning of over RM56 million from BPI through 13 nominee companies and 7 purported suppliers, and the approval of 71 fictitious payments by Madam Teh. This clearly demonstrates the severity, scale and sophistication of the fraud perpetrated by the Defendants. [281] The dishonest nature of the Defendants' conduct, as opposed to mere negligence or carelessness, is apparent from their systematic misuse of BPI's funds through an intricate web of entities. Far from showing any previous good character, Ricky Wong is a fugitive from justice which is a seriously aggravating factor. [282] Crucially, the SC has highlighted that no remorse or contrition has been shown by the Defendants. On the contrary, Ricky Wong has refused to cooperate with the SC's investigations and remains at large, demonstrating a lack of regard for the authority of the regulator. No efforts have been made to repay the misappropriated funds. [283] Given the egregious nature of the alleged misconduct and the unrepentant stance of the Defendants, I concur with the SC that imposing the maximum multiplier of 3 times the pecuniary gain is necessary and appropriate at this stage to send a strong deterrent message to preserve the integrity of the capital markets and punish wrongdoing of this magnitude. The quantum of the freezing injunction, which is pegged to this statutorily prescribed penalty, is therefore not excessive but proportionate to the Defendants' misconduct. The Defendants' conduct, if proven at trial, strikes at the very heart of public confidence in the proper regulation of the capital markets. This injunction sum is necessary to secure any eventual judgment in the public interest of preventing dissipation of ill-gotten gains. [284] I note Ricky Wong and Wong SK Holdings' argument that the RM169 million sum exceeds the alleged unlawful gains of around RM56 million and includes a multiplier of three times that amount as well as potential RM1 million civil penalties under Section 200(2) CMSA. However, Section 200(2) CMSA expressly empowers the court to order a payment of three times the amount of pecuniary gain as well as a civil penalty of up to RM1 million. The freezing injunction sought is to secure the totality of the SC's claim under this provision. [285] While the imposition of such multipliers and penalties is indeed discretionary, this does not preclude the SC from seeking a freezing order for the full potential sum claimable under the statute at the interlocutory stage, to preserve assets pending the final determination. As held in Larut Consolidated Bhd & Anor v Khoo Ee Bee & Ors [1997] 5 MLJ 77 (HC), the court retains the discretion to vary or reduce the quantum of the injunction at the inter partes stage if persuaded that the sum is excessive. In that case the court reduced the quantum of the injunction at the inter partes stage from the original RM54m to just US$5m, after finding the original sum to be excessively overstated. Therefore, setting the limit at RM169 million at this stage is not oppressive, as there is recourse for the Defendants to seek a variation if justified. [286] The authorities establish that a Mareva injunction will not be considered oppressive or excessive as long as it adheres to certain parameters. Firstly, the injunction must specify a fixed upper limit on the amount that can be frozen. This is to prevent the injunction from operating in an unlimited and overreaching manner. As held by the Court of Appeal in Motor Sports International Ltd (Servants or agents at Federal Territory of Labuan) & Ors v Delcont (M) Sdn Bhd [supra]: “In our judgment, where a plaintiff claims an exact sum, a Mareva injunction that restrains the defendant from dissipating his assets must specify an upper limit: if it does not, then the order is liable to be condemned as being too wide and therefore oppressive.” [287] Secondly, the injunction should make reasonable provision for the defendant's living and legal expenses. Failure to do so would be oppressive to the defendant. This principle was affirmed by the High Court in Larut Consolidated Bhd & Anor v Khoo Ee Bee & Ors: “I accept the fourth defendant's submission that the Mareva injunction as granted is oppressive. I find that the said order failed to make provision for the fourth defendant's living expenses and legal costs and that it also overstated the maximum monetary limit of the injunction's intended coverage. …. It cannot but be sound law that a failure to provide for living expenses and the payment of ordinary debts as they become due, in an order for a Mareva injunction, ought to be valid grounds to discharge that order. … The soundness of a provision for the defendant to employ funds in relation to his legal costs in defending the suit has also been acknowledged in Derby v Weldon (Nos 3 & 4) where Lord Donaldson MR said at p 76: ‘... it is not its [a Mareva injunction's] purpose ... to impede him in any way in defending himself against the claim.’” [1997] 5 MLJ 77 at 100D ...the failure of the order to provide for the defendant's living and other expenses as well as his costs for legal advice and representation would result in real oppression and injustice to the defendant.” [288] Finally, the upper limit specified in the injunction must not be overstated or exceed the reasonable amount required to satisfy any eventual judgment. An injunction that freezes far more than the potential judgment sum would be disproportionate and oppressive. As stated in Larut Consolidated Bhd: “It is my judgment that a fortiori, where a maximum limit is provided for, that maximum limit must as far as possible be accurately stated and in any event certainly not overstated.” [289] Applying these principles to the present case, I find that the Mareva injunction granted against the Defendants is not oppressive. The injunction order clearly specifies a maximum upper limit of RM169 million that can be restrained. There is no open-ended or unlimited freezing of assets. [290] Furthermore, in determining whether this upper limit is overstated, the relevant benchmark is the amount claimed by the SC in this action and not the total value of assets owned by the Defendants. Based on the available evidence of the funds traced to the Defendants, the SC has a good arguable case to claim the full RM169 million as the 3 times multiplier of the Defendants' alleged pecuniary gain. [291] The SC's evidence shows that a total of RM56 million was siphoned out of BPI and channeled to the Defendants through the four impugned transactions. RM35 million of the Rights Issue proceeds, RM7.7 million of the Private Placement proceeds, and RM13.2 million of the ESOS proceeds, were transferred to Ricky Wong's personal bank accounts or the accounts of companies controlled by him and Madam Teh. Applying a 3 times multiple on this RM56 million pecuniary gain by Ricky Wong and Madam Teh as statutorily provided for under section 200(2)(a) of the CMSA, the amount claimed would be RM168 million, which is very close to the RM169 million limit specified in the injunction order. [292] In comparison, the total value of Ricky Wong and Wong SK Holdings’ disclosed assets is only around RM50 million, which is far below the RM140 million and RM28 million sums claimed against them respectively. Therefore, there is no basis to conclude that the upper limit is overstated or that the injunction is restraining far more assets than necessary to satisfy an eventual judgment. The injunction sum is in fact modest and proportionate when assessed against the potential judgment that may be entered against the Defendants. [293] Finally, the terms of the injunction order do provide reasonable carve-outs for the Defendants' living and legal expenses. Paragraph (11) states: "This Order does not prohibit the Defendants from spending RM10,000.00 a month each towards their ordinarily living expenses and a reasonable sum on legal advice and representation." [294] This ensures that the injunction does not operate oppressively to deprive the Defendants of funds for basic necessities and a proper defence. [295] For these reasons, I am satisfied that the present Mareva injunction is not oppressive but in fact reasonable and proportionate in light of the large sums misappropriated by the Defendants and their substantial potential liability in this action. The upper limit is rationally connected to the amount claimed based on the statutory formula and the injunction makes adequate provision for the Defendants' legitimate expenses. There is therefore no reason to set aside or vary the injunction sum at this stage. [296] Madam Teh contends that the upper limit of RM169 million for the freezing injunction is excessive and oppressive against her because she only holds a miniscule shareholding of 1 out of 100,000 shares in Wong SK Holdings, which received RM9.3 million from the proceeds of the impugned transactions. She argues that based on this 0.001% shareholding, her maximum potential unlawful gain would only amount to around RM543. [297] However, this argument fails to appreciate the nature and effect of the SC's claim being on a joint and several basis against all the Defendants. As explained in the preceding analysis, under joint and several liability, the SC is entitled to pursue the entirety of the judgment sum from any one Defendant, irrespective of their individual portion of the liability or gains. Madam Teh's specific shareholding in Wong SK Holdings does not limit or apportion the sum that the SC can claim or enforce against her. The quantum of the freezing injunction must therefore be premised on the totality of the SC's claim, and not fragmented based on Madam Teh's individual interest. [298] Madam Teh further highlights that the SC has not alleged or proven that any part of the RM56 million unlawful gain was received by her personally. Be that as it may, this does not detract from the joint and several basis of the claim and liability. The receipt of funds by co-conspirators, nominee companies or related entities does not absolve Madam Teh from the potential liability to account for the entire judgment sum, by virtue of the joint and several nature of the claim. [299] Moreover, at this interlocutory stage, the SC is only required to establish a good arguable case, which is a relatively low threshold. The SC does not have to conclusively prove the actual receipt of funds by Madam Teh at this juncture. The voluminous evidence exhibited by the SC showing Madam Teh's involvement in the alleged scheme and fraudulent transactions is sufficient to establish a good arguable case. In particular, the SC has shown that Madam Teh signed off on 71 cheques and payment vouchers enabling the siphoning of RM56 million worth of funds from BPI to various nominee companies. She was also a director and shareholder in several key entities that received these funds, including Wong SK Holdings and Asia Media. [300] While her exact knowledge and receipt of the funds is a matter for determination at the trial of this suit, the evidence of Madam Teh's involvement at this stage is sufficient to justify the grant of the freezing injunction for the entire sum claimed on a joint and several basis. The argument that there is no evidence of funds being traced directly to her does not preclude the injunction, as long as a good arguable case is shown. The degree of Madam Teh's involvement and personal receipt of funds will be assessed at the trial based on the full evidence adduced, and does not affect the SC's entitlement to seek an interlocutory freezing injunction for the entire judgment sum that may be enforced against her as a jointly and severally liable defendant. [301] In conclusion, I am satisfied that based on the nature of the SC's claim under Section 200 CMSA and the joint and several liability of the Defendants, the additional evidence of the severity and complexity of the fraud adduced, the factors that justify imposition of the maximum 3x multiplier, and the principles governing when a Mareva injunction is considered oppressive, the upper limit of RM169 million for the freezing injunction is justified and proportionate to preserve assets pending the final determination of the matter. If at the inter partes stage it is shown that the sum is excessive in light of new evidence, the Defendants have recourse to seek a variation of the quantum. However, at this stage, I find no reason to conclude that the sum is oppressive or disproportionate to the SC's statutorily founded claim. The injunction is therefore allowed with the upper limit of RM169 million maintained. Issues specific to Enclosures 39 and 46 (Setting Aside Applications) Whether the SC failed to make full and frank disclosure by not informing the court that prior seizure orders over Madam Teh’s accounts had been lifted before obtaining the ex parte freezing order. [302] The SC contends that there has been no failure to make full and frank disclosure to the court in obtaining the ex parte injunction. [303] The SC submits that it had expressly disclosed the lifting of the seizure orders against Madam Teh on 1.4.2020 in both its affidavit in support and written submissions for the ex parte Injunction Application. The SC further points out that it had also exhibited the Revocation Orders in its affidavit. [304] The SC argues that the material non-disclosure threshold, which looks at whether the undisclosed facts were so severe that the injunction would not have been granted with full disclosure, has not been met. It contends that the release of Madam Teh's accounts does not obviate the risk of dissipation nor the need for an injunction. [305] Moreover, the SC submits that, the duty of full and frank disclosure is no longer relevant at the inter partes stage. The pragmatic approach is to consider the merits of continuing the injunction based on all the evidence now disclosed by both parties. [306] In conclusion, the SC maintains that it made proper disclosure of the release of Madam Teh's accounts prior to obtaining the ex parte injunction, and in any event this issue is no longer material at the inter partes stage in light of the evidence of risk of dissipation. [307] Madam Teh submits that the SC failed to make honest, full and frank disclosure of all relevant material facts to the court during the ex parte hearing on 8.5.2020 to obtain the freezing injunction. [308] She contends that the SC did not disclose the critical fact that the earlier freezing and seizure orders obtained by the SC over her accounts under the AMLATFPUAA had already been lifted and revoked by the Public Prosecutor on 1.4.2020. [309] Madam Teh argues that instead, for the ex parte hearing, the SC inaccurately stated that the seizure orders were due to lapse on 9.5.2020. She submits that the SC further reinforced this inaccurate statement during the oral hearing. [310] She contends that this non-disclosure of the revocation of seizure orders over a month earlier was a material fact that misled the court into granting the ex parte injunction under a mistaken sense of urgency. [311] Madam Teh submits that had this fact been properly disclosed, it would have demonstrated that she had over a month where her accounts were unfrozen, yet she did not make any attempts to dissipate or transfer out her assets during that period. [312] She argues that the SC's failure to disclose this critical fact deprived the court of a significant factor negating any risk of dissipation on her part, which is a key requirement for granting freezing injunctions. [313] Madam Teh contends that the SC, as a public authority, is held to higher standards of candor and its material non-disclosure amounts to a violation of its duty to make full and frank disclosure during ex parte proceedings. [314] In essence, Madam Teh submits that the freezing injunction against her should be set aside due to the SC's non-disclosure of the revocation of seizure orders over her accounts, which misled the court and tainted the entire ex parte proceedings. [315] Having carefully considered the submissions of both parties and the authorities cited, I find that the SC has made full and frank disclosure of all material facts in obtaining the ex parte freezing injunction against Madam Teh on 8.5.2020. [316] The key issue raised by Madam Teh is that the SC had failed to disclose the critical fact that the earlier freezing and seizure orders obtained by the SC over her accounts under the AMLATFPUAA had already been lifted and revoked by the Public Prosecutor on 1.4.2020, more than a month before the ex parte hearing. She contends that this non-disclosure misled the court into granting the ex parte injunction under a mistaken sense of urgency and deprived the court of considering a significant factor negating the risk of dissipation on her part. [317] However, the evidence shows that contrary to Madam Teh's assertion, the SC had in fact expressly disclosed the revocation of the AMLATFPUAA seizure orders in multiple documents, namely: a) Enclosure 18 - the SC's Affidavit in Support of the ex parte Injunction Application affirmed on 12.5.2020 at paragraph 274; b) Enclosure 15 - the SC's Written Submissions dated 8.5.2020 for the ex parte Injunction Application at paragraph 133; and c) Enclosure 24 - the actual Revocation Order dated 1.4.2020 which was exhibited as Exhibit SAB-39, in Enclosure 24 pages 1960 to 1966. [318] However, the evidence shows that contrary to Madam Teh's assertion, the SC had in fact expressly disclosed the revocation of the AMLATFPUAA seizure orders in both its affidavit in support and written submissions for the ex parte application. The relevant paragraphs in both documents clearly state: “Pursuant to a Revocation Order issued by the Public Prosecutor dated 1.4.2020, the thirty-nine
personal bank accounts belonging to Madam Teh which comprised of the total sum of RM41,978,643.81 were released” [319] Furthermore, the SC had exhibited the Revocation Orders themselves in its affidavit. This belies Madam Teh's contention that the SC had misled the court by stating the seizure orders were only due to lapse on 9.5.2020. A plain reading of the excerpts above unequivocally shows that the SC informed the court that the seizure orders had in fact already been revoked and Madam Teh's accounts released as of 1.4.2020. [320] As such, I am satisfied that the SC had made proper and full disclosure of this fact to the court during the ex parte hearing. There was no suppression or misleading of the court as alleged by Madam Teh. The court was not deprived of the opportunity to consider the implications of Madam Teh's accounts being unfrozen for over a month prior to the Injunction Application. [321] I am guided by the Court of Appeal decision in Damayanti
Kantilal Doshi & Anor v Jigarlal Kantilal Doshi [2004] 1 MLJ The case concerned a dispute among family members who were beneficiaries of an estate, regarding the release of funds held by a third party. An issue that arose was the alleged material non-disclosure by the appellants of earlier court orders when applying for the ex parte injunction, which the learned judicial commissioner found to be in breach of Order 29 rule 1(2)(B) of the Rules of the High Court 1980. The court held that material non-disclosure at the ex parte stage should not be taken to such an extent that the justice of granting interim relief at the inter partes stage is overlooked. The Court of Appeal was of the view that the paramount consideration at an inter partes injunction hearing is “whether the justice of the case requires the granting of the interim injunction on the facts presented”. The court stated: “On the issue of material non-disclosure of the earlier orders we are inclined to agree with the contention of learned counsel for the appellants that the paramount consideration is whether the justice of the case requires the granting of the interim injunction on the facts presented in an inter parte hearing despite the making of an ex parte order earlier on.” [322] Applying this test, the issue of non-disclosure by SC, even if made out, is no longer material at this inter partes stage. The court is not constrained to set aside the injunction on this ground alone. What is crucial is to examine the merits and justice of continuing the injunction based on all the evidence now disclosed by both parties. [323] This accords with the pragmatic approach advocated by the High Court in Salcon Engineering Sdn Bhd v PRM Energy Systems (M) Sdn Bhd [1993] 3 MLJ 64. The case concerned an application by the plaintiff for a Mareva injunction against the defendant to prevent dissipation of assets. An issue that arose was whether the plaintiff was guilty of non-disclosure of material facts when applying for the injunction ex parte. The court held that the question of non-disclosure is not relevant at the inter partes hearing and court stated: “The practicality of the Bennett and Broadbent approach is that the court will not, at the inter partes hearing, be encumbered with a forensic study on the question of disclosure. In some cases, such as the present, this is an onerous task involving detailed study of voluminous documents. At the end of this exercise, much time is wasted. I prefer to approach the inter partes hearing on a more pragmatic level by considering the merits of continuing the injunction on the material disclosed by both parties.” [324] Here, even assuming there was non-disclosure by SC in not highlighting more explicitly the release of the AMLATFPUAA seizure orders, I am not convinced that this was so severe that the injunction would not have been granted if there had been full disclosure. The legal threshold in Damayanti is whether the non-disclosure was of such gravity that the court would have rejected the injunction outright if the facts had been fully disclosed. [325] In this case, the lifting of the AMLATFPUAA seizure orders, while a relevant consideration, does not in itself negate the risk of dissipation nor automatically disentitle SC from obtaining a separate freezing injunction under the CMSA. This is because the legal requirements and purpose of asset freezing under the two regimes are separate and distinct. The release of Madam Teh's accounts by the Public Prosecutor under the AMLATFPUAA criminal regime due to insufficient grounds to prosecute a money laundering offence cannot be equated to mean there is no risk of dissipation for the purposes of a civil action by SC under the CMSA for fraudulent securities offences. The court would still have to assess the risk of dissipation based on the strength of SC's case and the evidence of the fraudulent scheme perpetrated by Madam Teh. [326] In this regard, I accept that the compelling evidence adduced by SC of Madam Teh's integral involvement in the elaborate fraud on the company and its investors through the siphoning of funds would justify the grant of the injunction, even if the release of the AMLATFPUAA orders had been explicitly mentioned. The justice of the case requires the injunction to be maintained to preserve the assets pending trial of the CMSA civil action, notwithstanding the Public Prosecutor's decision not to pursue criminal charges under AMLATFPUAA. The Defendants should not be allowed to benefit from or dissipate the proceeds of their fraudulent scheme in the meantime. As such, the non-disclosure does not meet the high threshold in Damayanti to warrant the injunction being set aside. [327] In this regard, I note that the SC has adduced cogent evidence in its affidavits of a real risk of dissipation of assets by Madam Teh, based on her integral role and involvement in the elaborate scheme to defraud BPI as detailed in the cause papers. Her conduct in authorising numerous payments and fund transfers through intermediary companies which were eventually siphoned to the Defendants' accounts clearly shows a propensity to conceal assets through layering and fraudulent means. This in itself provides a strong basis to infer a real risk of Madam Teh dissipating her assets to defeat the enforcement of any judgment against her. [328] In conclusion, I find that the SC had made full and frank disclosure of the revocation of the AMLATFPUAA seizure orders against Madam Teh in multiple documents prior to obtaining the ex parte injunction under the CMSA. There was no suppression of material facts that misled the court. In any event, the issue of non-disclosure is no longer relevant at the inter partes stage, where the evidence clearly establishes a real risk of dissipation that warrants the continuation of the freezing injunction against Madam Teh. For these reasons, Madam Teh's application to set aside the ex parte injunction for material non-disclosure is dismissed with costs. The SC's application for an inter partes injunction is allowed with costs Whether the SC has properly commenced the civil action against the Defendants under Section 200 of CMSA by meeting the “it appears to the SC” threshold for alleging a contravention of Section 179. [329] SC submits that for the purposes of commencing a civil action under Section 200(1) of the CMSA, it is sufficient that it “appears to the SC” that the Defendants had contravened Section 179 of the CMSA. This applies to all the Defendants. [330] SC argues that the phrase “where it appears to the Commission” in Section 200(1) sets a lower standard than having to definitively prove the contravention at the outset. It contends that Parliament intended for the SC to have the power to institute civil proceedings as long as it reasonably appears to the SC that there has been a breach of Section 179, without having to conclusively establish the contravention at that stage. [331] In support of this interpretation, SC relies on the Court of Appeal decision in Tengku Dato' Kamal Ibni Sultan Sir Abu Bakar & Ors v Bursa (M) Securities Bhd and another appeal [2013] 1 MLJ 158, where it was held that the words “it appears to the court” in Section 360(1)(c) of the CMSA connote a lower standard than having to “prove” a contravention. [332] SC submits that based on its investigation and the evidence gathered, it reasonably appears to the SC that all the Defendants, Ricky Wong, Wong SK Holdings and Madam Teh, have contravened Section 179(a) and/or (b) of the CMSA through their respective roles and conduct in the scheme to defraud BPI as detailed in the supporting affidavit. [333] Therefore, SC contends that the threshold of “appears to the SC” has been met to properly commence the civil action against each of the Defendants under Section 200 of the CMSA, without having to definitively prove the contravention at this stage. The merits of the case can then be determined through the trial process. [334] Ricky Wong and Wong SK Holdings submit: a) Section 179 of the CMSA is a penal provision that must be construed strictly. It is not a “requirement” under Section 360 of the CMSA. Section 179 prohibits certain conduct rather than imposing requirements. b) The words “in connection with the subscription, purchase or sale of any securities” in Section 179 must be read strictly. The SC’s complaints relate to events after the subscription, purchase or sale of securities, and therefore fall outside the scope of Section 179. c) As Section 179 is not a relevant requirement under Section 360, the SC cannot rely on it to seek orders under Section 360(1)(D). The phrase “it appears to the court” in Section 360(1) does not lower the threshold for the SC. d) Even if Section 360 applies, the Plaintiff must still meet the common law test for a freezing order, which requires showing a good arguable case and a real risk of dissipation of assets. The phrase “it appears to the court” only relates to establishing a contravention, not the grant of orders under Section 360(1)(A)-(P). [335] Madam Teh argues: a) The SC, as a statutory body, can only exercise powers expressly granted to it in the CMSA. A breach of the prohibition in Section 179 is not a breach of a “relevant requirement” under Section 360(13). b) The Court of Appeal in Lai Soon Onn authoritatively found that provisions like Section 179 which are prohibitions are not “relevant requirements” under Section 360. The English cases cited by the Plaintiff are distinguishable due to differences in the UK legislation. c) Even if Section 360 applies, the common law test for a freezing injunction still requires the SC to show a good arguable case and risk of dissipation. The phrase “it appears to the court” does not remove this requirement. [336] In summary, the Defendants contend that a breach of Section 179, being a prohibition rather than a requirement, does not fall within Section 360. The threshold of “it appears to the court” relates only to establishing a contravention, not the applicable legal test for granting injunctive relief under Section 360(1)(D) CMSA. [337] Having carefully considered the submissions of both parties and the authorities cited, I am of the view that the SC has properly commenced the civil action against all the Defendants under Section 200 CMSA. [338] The crux of the issue turns on the interpretation of the phrase “where it appears to the Commission” in Section 200(1) of the CMSA. I agree with the SC's contention that this phrase sets a lower threshold than definitively proving a contravention of the securities laws at the outset. The natural and ordinary meaning of the words “appears to” denotes a lower standard akin to a reasonable belief based on the information available, rather than conclusive proof. [339] This interpretation is supported by the Court of Appeal's decision in Tengku Dato' Kamal Ibni Sultan Sir Abu Bakar & Ors v Bursa (M) Securities Bhd [supra] which held that similar phrasing in Section 360(1)(c) of the CMSA - “it appears to the court” - connotes a lower standard than having to strictly “prove” a contravention. Although that case dealt with a different provision, the same principle of statutory interpretation should apply. Parliament's choice of the words “appears to” instead of “proves” must be given effect and taken to allow some leeway based on the regulator's reasonable assessment. [340] I do not accept the Defendants' argument that Section 179 of the CMSA is purely a penal provision that falls outside the scope of Section 360. In the earlier part of this judgment I have found that while Section 179 prohibits certain manipulative conduct, compliance with its terms is nonetheless a requirement imposed by the CMSA. The fact that it is phrased in the negative does not alter its status as a requirement. This is clear from Section 360(13)(a)(i) which defines “relevant requirement” broadly to include “a requirement which is imposed by or under this Act”. [341] The Court of Appeal's decision in Lai Soon Onn does not assist the Defendants. That case involved the narrow issue of whether compliance with the Malaysian Code on Take-Overs and Mergers was a “relevant requirement”. The finding was specific to the unique framework for the Take-Over Code and does not lay down a general rule that all prohibitions fall outside Section 360. In contrast, the High Court in Securities Commission v Chan Chui Mei recognised that a breach of Section 179 amounts to a breach of a relevant requirement under Section 360. [342] On the facts, I am satisfied that the SC has shown that it reasonably appears that all three Defendants have contravened Section 179(a) and/or (b) based on the evidence gathered in its investigation to date: a) For Ricky Wong, the evidence indicates he had personal knowledge of the BPI Corporate Exercises and was the mastermind of the devices and schemes to defraud BPI. He provided funding for the subscription of shares and eventually received substantial proceeds through his nominee companies. b) For Wong SK Holdings, the evidence shows it acted as Ricky Wong's alter ego and facilitated the flow of funds. As a major shareholder in BPI, it subscribed for shares in the BPI Corporate Exercises funded by Ricky Wong and eventually received RM9.3 million of the proceeds. c) For Madam Teh, while her involvement may be less than Ricky Wong, the evidence still indicates she participated in the scheme by signing numerous cheques as BPI's bank signatory to approve payments to the nominee companies based on fictitious transactions. She was also a shareholder and director in various nominee companies that received proceeds. [343] Although the Defendants argue the alleged conduct occurred after the subscription or sale of securities, this does not take the case outside Section 179. The phrase “in connection with” is to be interpreted flexibly and covers acts that have a nexus with the securities transactions, even if subsequent. Here, the Defendants' alleged conduct of diverting BPI's fundraising proceeds through sham transactions is clearly connected with the sale of securities under the BPI Corporate Exercises. [344] Therefore, I find that the SC has sufficiently met the threshold of establishing that it reasonably appears to the SC that there have been breaches of Section 179 by the Defendants to invoke the SC's power to commence a civil action under Section 200. The merits of the case can then be ventilated and determined through a full trial. The Defendants' arguments on the applicable legal test for granting an injunction and risk of dissipation are a separate enquiry from the threshold for commencing an action. [345] In conclusion, the Defendants have not shown any reason to set aside the ex parte injunction on the basis that the action is not properly commenced. The SC has demonstrated a good arguable case at this interlocutory stage that all three Defendants have contravened Section 179, which amounts to a breach of a relevant requirement under Section 360. The statutory language of “appears to” in Section 200(1) allows the action to be brought based on the SC's reasonable belief without definitively proving the breach at the outset. Whether the SC is required to provide an undertaking as to damages under Section 360(5) CMSA. [346] The SC submits that it is not required to provide an undertaking as to damages in seeking an injunction under Section 360 CMSA for two key reasons. [347] Firstly, the SC points out that Section 360(5) CMSA expressly provides that when an application for an injunction under Section 360(1) is made by the SC, the court shall not require any undertaking as to damages to be given by or on behalf of the SC as a condition of granting the order. [348] Secondly, the SC contends that as a regulatory body commencing this action in the public interest to enforce securities laws, it should not be compelled to provide an undertaking as to damages. [349] The SC argues that a public authority seeking to enforce the law in the interest of the public, in pursuance of a public duty and with limited resources allocated by the state, should not be deterred from doing so by fear of claims for damages arising from a cross-undertaking. [350] Therefore, the SC submits that it is not obligated to provide an undertaking as to damages to obtain an injunction under Section 360 CMSA, both by the clear wording of the statute itself and based on established case law principles regarding public authorities enforcing the law. [351] Having carefully considered the submissions and the authorities cited, I find that the SC is not required to provide an undertaking as to damages to obtain an injunction under Section 360 CMSA. [352] On the specific issue of whether the SC is required to provide an undertaking as to damages when seeking an injunction under Section 360 CMSA, I am persuaded by the SC's arguments. [353] Firstly, the plain wording of Section 360(5) CMSA clearly states that where an application for an order under Section 360(1) is made by the SC, the court “shall not, as a condition of the grant of the order, require any undertaking as to damages to be given by or on behalf of the Commission”. This unambiguously exempts the SC from having to provide an undertaking as to damages when applying for injunctions under the said provision. The court is expressly precluded from imposing such a requirement on the SC. [354] Secondly, I am guided by the principle, well-established in the authorities from other jurisdictions involving similar statutory bodies, that a public authority acting pursuant to a public duty to enforce the law in the public interest should not be fettered or deterred from carrying out its functions by having to give undertakings as to damages. [355] The SC has cited three persuasive cases on this point. In Financial Services Authority v Sinaloa Gold plc and others [2013] 2 All ER 339, the UK Supreme Court held that a public authority seeking to enforce the law in the interests of the public generally ought not to be deterred from doing so by the fear of cross-claims arising from a cross-undertaking, especially given its limited allocated state resources. [356] Similarly, in Securities and Investments Board v Lloyd-Wright and another [1993] 4 All ER 210, the UK Chancery Division found that no undertaking as to damages was required from the Securities and Investments Board seeking injunctive relief to restrain contraventions of the Financial Services Act 1986, as the remedy was sought for the benefit of the public at large as a matter of law enforcement. [357] The Ontario Court of Justice in Ontario (Securities Commission) v von Anhalt, [2005] O.J. No. 247 also arrived at the same position, ruling that the Ontario Securities Commission, as a public authority, was not required to provide undertakings as to damages where it was attempting to enforce the securities law of the land. [358] I am of the considered view that this principle is applicable to the SC's application here. The SC is a statutory body established under the SCMA to regulate the Malaysian capital market. It is empowered under Sections 200 and 360 CMSA to commence civil actions to restrain breaches of securities laws and protect the investing public. In doing so, the SC is discharging its public duty and acting in the interest of the public at large. [359] Requiring the SC to provide an undertaking as to damages would have a chilling effect on the exercise of its statutory enforcement powers, as it would constantly have to weigh the potential of incurring liability to alleged wrongdoers before taking action to curb securities misconduct. This would hamper the SC in acting effectively, expeditiously and fearlessly to protect the public and the integrity of the capital market, especially with the limited financial resources it has as a public authority. [360] I do not think that Parliament could have intended to curtail the SC's ability to carry out its enforcement functions in such a manner, by exposing it to the risk of cross-undertakings. If that were the case, Section 360(5) CMSA would not have been worded to explicitly state that the court shall not require undertakings as to damages from the SC when granting injunctions under Section 360. [361] The scope and terms of such an order remain at the discretion of the court to determine as appropriate based on the facts. Concerns about the proportionality and effect of the injunction therefore go towards the court's exercise of discretion in deciding whether injunctive relief should be granted at all, and if so on what terms, rather than whether an undertaking must be furnished. [362] In conclusion, I am satisfied that the SC is not required to provide an undertaking as to damages in support of its application for a freezing injunction under Section 360 CMSA. This is based on the clear exclusion of such an undertaking in Section 360(5) CMSA, as well as the established principle that public authorities acting in the discharge of their public duty to enforce the law should not be made to provide cross-undertakings in damages. Whether the SC has acted in bad faith and abused the process of the court by commencing this civil suit after having earlier pursued action against them under AMLATFPUAA. [363] Ricky Wong and Wong SK Holdings submit that the SC has acted in bad faith and abused the process of the court by commencing this civil suit after having earlier pursued action against them under the AMLATFPUAA. [364] They argue that the SC had initially frozen and seized their accounts under AMLATFPUAA by alleging that the funds therein were proceeds from unlawful activities related to the alleged securities offences. [365] However, they contend that after conducting investigations under the criminal AMLATFPUAA proceedings, the SC failed to obtain consent from the Public Prosecutor to continue under the criminal jurisdiction or continue freezing the accounts under AMLATFPUAA. [366] Ricky Wong and Wong SK Holdings submit that instead of accepting this outcome under the criminal proceedings, the SC has now initiated a separate civil suit under lower evidentiary standards in an attempt to freeze the same accounts and assets. [367] They argue that this amounts to the SC “changing tack” and resorting to civil proceedings merely because it could not meet the higher burden under criminal law against them. [368] Ricky Wong and Wong SK Holdings contend that this contradictory approach by the SC contravenes principles of fairness, finality and constitutes an abuse of process and a collateral attempt to circumvent the criminal law findings. [369] Madam Teh submits that the SC has acted in bad faith by re-freezing her personal accounts through this civil suit after the very same accounts were unconditionally released by the Public Prosecutor in the earlier AMLATFPUAA proceedings. [370] She argues that after originally freezing her accounts under AMLATFPUAA allegations, the Public Prosecutor concluded there was no basis to continue freezing them and issued revocation orders to release the accounts unconditionally on 1.4.2020. [371] However, Madam Teh contends that the SC has now re-frozen those very accounts through the ex parte freezing injunction obtained on 8.5.2020 in this civil suit, without providing any justification for disregarding the earlier findings. [372] She submits that the SC has failed to explain why it is entitled to effectively extend the earlier freezing orders through this civil suit after her accounts were cleared in the AMLATFPUAA criminal proceedings. [373] Madam Teh argues that this conduct by the SC is tantamount to mala fides, as it is either ignoring or seeking to nullify the conclusions reached by the Public Prosecutor, who is the guardian of public interest in criminal prosecutions. [374] She contends that allowing the re-freezing without justification would permit the SC to arbitrarily disregard prior legal determinations and riders by other lawful authorities like the Public Prosecutor. [375] In essence, the Defendants collectively accuse the SC of acting in bad faith and abuse of process by pursuing this civil suit as a means to circumvent or nullify the outcomes of the earlier criminal AMLATFPUAA proceedings against them. [376] The SC submits that there is no bad faith or abuse of process in commencing this civil suit after taking action under AMLATFPUAA. The SC contends that investigation or action under AMLATFPUAA does not preclude it from filing a civil suit under the CMSA for several reasons. Firstly, criminal proceedings under the AMLATFPUAA are initiated at the discretion of the Public Prosecutor, not the SC. Secondly, the objectives of a civil action under the CMSA and a criminal action under the AMLATFPUAA differ significantly - the former aims at compensating victims, while the latter focuses on imposing criminal penalties. Thirdly, Section 360(14) of the CMSA explicitly states that an application under this provision should not undermine any other legal action by the SC under any law. Lastly, Section 200(1) of the CMSA empowers the SC to initiate civil proceedings irrespective of whether the defendant has faced criminal charges for the violation. [377] Moreover, the SC highlights that it has obtained written consent from the Public Prosecutor to initiate this civil suit, belying any allegations of bad faith. [378] The SC argues there is no bad faith in obtaining an injunction over Madam Teh's accounts that were previously released by prosecutors under the AMLATFPUAA. [379] The SC points out that the present injunction under CMSA is a worldwide freezing order covering all of Madam Teh's assets up to the value of the claim. The purpose is to preserve assets pending determination of this civil suit, which is distinct from the earlier AMLATFPUAA orders which aimed to preserve assets pending investigations into criminal offences. [380] The SC contends there is nothing precluding it from seeking an injunction over these accounts under CMSA despite their earlier release under AMLATFPUAA, as the two regimes serve different purposes. The release was at the Prosecutor's discretion and did not bind the SC in commencing this action. [381] Furthermore, the SC submits that the risk of asset dissipation and need for an injunction persist regardless of the accounts' previous status under AMLATFPUAA. [382] Therefore, the SC maintains it has acted properly and without bad faith in respect of both Madam Teh and Ricky Wong and Wong SK Holdings. [383] Having carefully considered the submissions of both parties and the authorities cited, I find that the SC has not acted in bad faith or abused the court process by commencing this civil suit after pursuing action against the Defendants under the AMLATFPUAA. [384] Ricky Wong and Wong SK Holdings' contention that the SC has “changed tack” and resorted to civil proceedings merely because it could not meet the higher burden under criminal law is untenable and without merit. This argument fundamentally misunderstands the distinct roles of the Public Prosecutor and the SC in criminal and civil enforcement under Malaysian securities laws. [385] As rightly pointed out by the SC, criminal proceedings under the AMLATFPUAA are instituted at the sole discretion of the Public Prosecutor, not the SC. This is made plain by the High Court decision of Datuk Ishak bin Ismail lwn Pendakwa Raya [2016] MLJU 1334, where Nordin Hassan J held: “[27] undang-undang adalah jelas seperti yang telah dinyatakan, bahawa kuasa untuk mendakwa adalah terletak pada Pendakwaraya dan tidak pada pihak SC, apa juga niat pihak SC tidak pada bila-bila masa menjejaskan hak Pendakwaraya untuk membuat pertuduhan jenayah terhadap Pemohon jika mendapati keterangan yang ada adalah mencukupi.” (Translation: [27] the law is clear as stated, that the power to prosecute lies with the Public Prosecutor and not with the SC, whatever the SC's intentions do not at any time affect the Public Prosecutor's right to proffer criminal charges against the Applicant if he finds that the available evidence is sufficient.) [386] Therefore, the mere fact that consent to consent from the Public Prosecutor to continue under the criminal jurisdiction was not obtained from the Public Prosecutor under the earlier AMLATFPUAA proceedings does not in any way preclude or prevent the SC from commencing a separate civil action under the CMSA. The SC's right to pursue civil remedies exists independently from the Public Prosecutor's discretion in respect of criminal prosecution. One cannot extrapolate from the absence of criminal charges that the SC is barred from seeking relief through the civil courts. To hold otherwise would unduly conflate the distinct powers of the Public Prosecutor and SC. [387] This is further reinforced by the express provisions in the CMSA itself. Section 360(14) of the CMSA unequivocally states that: “An application made under this section shall not prejudice any other action that may be taken by the Commission under securities laws or any other law or rules.” [388] The language used is clear and unambiguous. Parliament expressly intended that action taken by the SC under section 360, which provides for wide-ranging civil remedies, shall not affect its ability to take any other action under any law, which necessarily includes criminal proceedings under AMLATFPUAA. This puts paid to any argument that the SC's commencement of this suit somehow contradicts or undermines the earlier criminal law outcome. [389] Furthermore, section 200(1) of the CMSA provides as follows: “Where it appears to the Commission that any person has contravened section 175, 176, 177, 178, 179 or 181 [market misconduct provisions], the Commission may institute civil proceedings in the court against that person, whether or not that person has been charged with an offence in respect of the contravention, or whether or not a contravention has been proved in a prosecution.” [390] This provision categorically allows the SC to institute civil proceedings for market misconduct regardless of whether the defendant has been charged with an offence for the contravention. In other words, even if criminal charges are not pressed under AMLATFPUAA or any other law, the SC is statutorily empowered to separately pursue defendants via the civil courts as long as the ingredients of the market misconduct provisions are made out. The Act draws a clear distinction between the criminal and civil liability regimes, such that action or inaction on one front does not necessarily impact the other. [391] In this regard, to characterise the SC's commencement of this suit as “changing tack” or attempting to circumvent the criminal law outcome is to ignore the clear words of the statute and the express Parliamentary intention to facilitate parallel criminal and civil proceedings. The CMSA provisions are specifically designed to empower the SC to seek civil remedies to protect investors and market integrity, independently of the status of criminal investigations or prosecutions. As such, the SC's actions here are entirely proper and in line with its statutory mandate. [392] Crucially, the SC has obtained written consent from the Public Prosecutor under Section 54(3) AMLATFPUAA to initiate the present civil suit, as evidenced by an email dated 26.4.2020 from Muhammad Saifuddin Hashim on behalf of the Public Prosecutor to the SC’s Deputy Director for Prosecution & Civil Enforcement Department, Puan Ros Mawar Rozain (now Judicial Commissioner). Section 54(3) AMLATFPUAA reads: “(3) For so long as a seizure of any property under this Act remains in force, no action, suit or other proceedings of a civil nature shall be instituted, or if it is pending immediately before such seizure, be maintained or continued in any court or before any other authority in respect of the property which has been so seized, and no attachment, execution or other similar process shall be commenced, or if any such process is pending immediately before such seizure, be maintained or continued, in respect of such property on account of any claim, judgement or decree, regardless whether such claim was made, or such judgement or decree was given, before or after such seizure was effected, except at the instance of the Federal Government or the Government of a State, or at the instance of a local authority or other statutory authority, or except with the prior consent in writing of the Public Prosecutor.” [393] This fact wholly undermines Ricky Wong and Wong SK Holdings' allegations of bad faith or collateral attempt to circumvent earlier criminal law findings. The Public Prosecutor's express consent to the SC commencing this civil action demonstrates that the guardian of public interest in criminal prosecutions does not view the SC's current suit as contradicting any prior determinations made in the criminal sphere. [394] It must be emphasised that the Public Prosecutor is vested with the sole discretion to institute, conduct or discontinue any criminal proceedings under Article 145(3) of the Federal Constitution (see Government of Malaysia v Lim Kit Siang [1988] 2 MLJ 12 (SC)). [395] Therefore, the Public Prosecutor's informed decision to consent to the SC's present civil proceedings, after having sight of the earlier criminal investigations and outcomes, carries immense weight. It constitutes a recognition by the ultimate prosecutorial authority that there is no inconsistency between the prior criminal action and the current civil suit. The Public Prosecutor's approval signals that this civil action is a legitimate exercise of the SC's statutory powers that does not constitute an abuse of process. [396] Moreover, it is trite that criminal liability is distinct from civil liability. The two regimes serve different purposes and entail different considerations. Discontinuing an earlier criminal action does not preclude a subsequent civil suit on the same facts, and vice versa (see Subramaniam a/l Muniandy v Letchumi a/p Thasan & Ors [2021] MLJU 281 (CA)). [397] Here, the purposes of civil action under the CMSA and criminal action under AMLATFPUAA are substantially different. While the former focuses on victim compensation through restitutionary remedies like disgorgement of ill-gotten gains, the latter revolves around criminal punishment and deterrence of the perpetrator. Given their distinct objectives, there is nothing amiss in pursuing both concurrently or consecutively, as long as the requirements under each regime are independently satisfied based on the applicable burdens and standards of proof. The existence of prior criminal proceedings does not give rise to an estoppel against the instant civil action. [398] The contention is supported by the unequivocal terms of the CMSA itself. Section 360(14) stipulates that an application made under this section shall not prejudice any other action that may be taken by the SC, a stock exchange, a derivatives exchange, or an approved clearing house under any securities laws or any other law or rules. [399] Furthermore, as per section 200(1), where it appears to SC that sections 175, 176, 177, 178, 179, or 181 has been contravened, the SC may institute civil proceedings in court against that person, irrespective of whether he has been charged with an offence related to the contravention or whether the contravention has been proven in a prosecution. [400] These express statutory provisions put it beyond doubt that the SC is empowered to commence civil proceedings under the CMSA, notwithstanding any prior criminal action under AMLATFPUAA or any other law. Ricky Wong and Wong SK Holdings have not shown that the requirements for invoking sections 360 and 200 of the CMSA are unsatisfied in the present case. [401] In respect of Madam Teh's contentions, I find that the SC has not acted in bad faith by obtaining an injunction over accounts that were previously released by prosecutors under the AMLATFPUAA. It is important to note that the present injunction under Section 360 CMSA is a worldwide Mareva freezing order which covers all of Madam Teh's assets up to the value of the claim. This is distinct in purpose and scope from the earlier AMLATFPUAA orders which aimed to preserve specific accounts pending investigations into criminal offences. [402] While the release of the accounts by the Public Prosecutor ended the earlier freeze under AMLATFPUAA, there is nothing precluding the SC from seeking a fresh injunction over those same accounts under the CMSA, as the two regimes serve different purposes. As the SC rightly submits, the risk of asset dissipation and need for an injunction persist regardless of the accounts' previous status under AMLATFPUAA. The SC has a legitimate basis to ensure that sufficient assets are preserved to meet any potential judgment in this civil suit, separate from the question of criminal liability. [403] In any event, the lifting of the AMLATFPUAA freeze was at the Public Prosecutor's discretion and did not bind the SC in commencing this action. Contrary to Madam Teh's assertions, the release did not amount to a finding that there was no basis to freeze the accounts, but merely reflected the Public Prosecutor's decision at that juncture. It cannot be interpreted as precluding action under different legislation by other lawful authorities like the SC. To hold otherwise would unduly fetter the SC's ability to pursue statutory remedies under the CMSA. [404] On the facts, I am satisfied that the SC has sufficiently justified the worldwide Mareva injunction over Madam Teh's assets to preserve the subject matter of this suit, notwithstanding the earlier release of her accounts under AMLATFPUAA. The extensive evidence of her involvement in the scheme, including signing off on numerous fraudulent transactions, amply demonstrates a real risk of dissipation that warrants the injunction, regardless of the AMLATFPUAA position. [405] For the above reasons, I find that the SC has not acted in bad faith or abused the court's process in respect of both the Ricky Wong and Wong SK Holdings as well as Madam Teh. The Defendants have not shown any basis to conclude that the SC is acting improperly or seeking to usurp the prior findings of the Public Prosecutor. Whether there is delay by the SC in commencing this suit. [406] Ricky Wong and Wong SK Holdings submit that the SC has been guilty of inordinate and prejudicial delay in filing this civil suit against them. [407] They contend that based on the SC's own case, the alleged wrongdoings relating to the corporate exercises at BPI took place between 2013 to 2015. However, the SC only commenced investigations into these matters in 2017. [408] They argue that even after completing its investigations in 2017, the SC further delayed filing this suit until May 2020 - a delay of around 3 years from when it first began probing the alleged issues. [409] Ricky Wong and Wong SK Holdings submit that the SC has provided no cogent explanation justifying this inordinate delay in initiating legal proceedings despite having its investigation findings from 2017 itself. [410] They contend that this lengthy delay is prejudicial as it has allowed the SC to continue freezing their accounts and assets for an extended period without actual legal proceedings on foot. [411] Furthermore, they argue that the delay appears even more inordinate when coupled with the fact that the SC had already taken separate action by freezing and seizing accounts under the AMLATFPUAA proceedings around 2019 itself. [412] Madam Teh echoes the submissions made by Ricky Wong and Wong SK Holdings regarding the SC's delay of around 3 years in filing this suit from when it first commenced investigations in 2017. [413] Additionally, she submits that the SC's delay is particularly prejudicial against her, as her personal accounts remained frozen for nearly a year from May 2019 to April 2020 under the AMLATFPUAA proceedings, before being re-frozen in this suit from May 2020 onwards. [414] Madam Teh argues that by delaying the filing of this suit, the SC has been able to keep her funds frozen for an inordinately long period despite having completed its investigations, while simultaneously depriving her of the full benefit of the revocation orders issued in her favor in the AMLATFPUAA proceedings. [415] She contends that the SC has failed to provide any reasonable justification for this prejudicial delay which has impacted her financial affairs and transactions over an extended period based on mere allegations at this stage. [416] In summary, the Defendants collectively accuse the SC of inordinate delay in initiating this suit many years after becoming aware of the alleged issues, with no reasonable justification provided, causing continuing prejudice by keeping their assets frozen for a prolonged period. [417] Regarding the issue of delay in commencing this suit, the SC submits that there has been no undue delay and in any event, the action was brought within the statutory limitation period. [418] In respect of all Defendants, the SC contends that the suit was filed within the 12-year limitation period prescribed under Section 200(6) CMSA. [419] It is not disputed by any of the parties that the alleged wrongdoings relating to the BPI Corporate Exercises took place between 2013 to 2015. It is also common ground that the SC only commenced its investigations into these irregularities in 2017. [420] However, having considered the submissions of the SC, I am satisfied that the gap between the occurrence of the impugned transactions and the commencement of investigations is justified and does not constitute undue delay in the circumstances. The SC has explained, and this has not been controverted by the Defendants, that the manipulative scheme employed by the Defendants was highly complex in nature, involving numerous related entities and parties, including foreign elements in the Republic of Korea. [421] In order to get to the bottom of this elaborate scheme and establish the trail of funds, it was necessary for the SC to conduct a thorough and extensive investigation, which understandably took a substantial period of time. The SC's investigating powers are set out in the SCMA, which under Section 15 mandates the SC to take all reasonable measures to monitor and safeguard the integrity of the capital market. Section 16 further provides that “The Commission shall have all such powers as may be necessary for or in connection with, or reasonably incidental to, the performance of its functions under the securities laws.” [422] Gathering evidence from multiple entities, unravelling the corporate relationships, following the money trail and seeking information from foreign authorities in the Republic of Korea would inevitably lengthen the time required to complete the investigation. I accept the SC's submission that it would have been impractical, if not impossible, to properly investigate such a complex web of transactions spanning several years in a short time frame. [423] The SC had to be thorough and comprehensive in its investigations, as a premature suit based on insufficient evidence would have been prejudicial to its case and contrary to public interest. I am therefore not persuaded that the SC had been tardy or had unduly delayed investigations. The mere passage of time between the events and the commencement of investigations, in the absence of any evidence of deliberate tardiness or prejudice, is insufficient to constitute undue delay. The time span of around 2 years for the SC to commence investigations was, in my view, fair and reasonable in light of the complex, multi-layered and cross-border nature of the transactions requiring investigation. [424] Furthermore, the SC submits that the investigation was prolonged due to the lack of cooperation by multiple parties, including Ricky Wong, whose whereabouts remain unknown and a warrant of arrest has been issued against him. Other key individuals like Ken Ong and Amirruddin bin Nin were similarly uncooperative, leading to charges being filed against them for failing to appear before the investigating officer. [425] The SC contends that despite these challenges, it has acted diligently in pursuing its investigation and commencing the suit once sufficient evidence was gathered. [426] Regarding Madam Teh, the SC argues that she has not substantiated any specific prejudice suffered by her as a result of the alleged delay. [427] In conclusion, the SC maintains that it has not caused any undue delay in filing this suit against all the Defendants, taking into account the complexity of the case, challenges faced in the investigation, and the statutory limitation period. The SC submits that the Defendants have not shown any prejudice or basis to deny the orders sought on the ground of delay. [428] Having carefully considered the submissions of both parties and the authorities cited, I find that there is no undue or inordinate delay on the part of the SC in commencing this suit against the Defendants that would warrant setting aside the Ex Parte Injunction Order granted on 8.5.2020. [429] It is not disputed by any of the parties that the alleged wrongdoings relating to the BPI Corporate Exercises took place between 2013 to 2015. It is also common ground that the SC only commenced its investigations into these irregularities in 2017. [430] However, having considered the submissions of the SC, I am satisfied that the gap between the occurrence of the impugned transactions and the commencement of investigations is justified and does not constitute undue delay in the circumstances. The SC has explained, and this has not been controverted by the Defendants, that the manipulative scheme employed by the Defendants was highly complex in nature, involving numerous related entities and parties, including foreign elements in the Republic of Korea. [431] In order to get to the bottom of this elaborate scheme and establish the trail of funds, it was necessary for the SC to conduct a thorough and extensive investigation, which understandably took a substantial period of time. The SC's investigating powers are set out in the SCMA, which under Section 15 mandates the SC to take all reasonable measures to monitor and safeguard the integrity of the capital market. Section 16 further provides that “The Commission shall have all such powers as may be necessary for or in connection with, or reasonably incidental to, the performance of its functions under the securities laws.” [432] Gathering evidence from multiple entities, unravelling the corporate relationships, following the money trail and seeking information from foreign authorities in the Republic of Korea would inevitably lengthen the time required to complete the investigation. I accept the SC's submission that it would have been impractical, if not impossible, to properly investigate such a complex web of transactions spanning several years in a short time frame. [433] The SC had to be thorough and comprehensive in its investigations, as a premature suit based on insufficient evidence would have been prejudicial to its case and contrary to public interest. I am therefore not persuaded that the SC had been tardy or had unduly delayed investigations. The mere passage of time between the events and the commencement of investigations, in the absence of any evidence of deliberate tardiness or prejudice, is insufficient to constitute undue delay. The time span of around 2 years for the SC to commence investigations was, in my view, fair and reasonable in light of the complex, multi-layered and cross-border nature of the transactions requiring investigation. [434] I also note the SC's submission, which has not been contradicted by the Defendants, that its investigation was prolonged due to lack of cooperation by multiple key parties involved in the impugned transactions. [435] The SC has highlighted that Ricky Wong, who was the alleged mastermind of the scheme, has failed to cooperate with the investigations from the outset. Ricky Wong's whereabouts remain unknown up to now. The SC's difficulty in locating Ricky Wong is evident from the fact that it had to initiate a warrant of arrest against him, as well as enlist the assistance of Interpol to trace his whereabouts. All these steps demonstrate the SC's diligence but also the obstacles faced in investigating Ricky Wong's involvement. [436] The SC has also named two other individuals, Ken Ong and Amirruddin bin Nin, who failed to appear before the investigating officer to have their statements recorded, despite being issued notices under Section 32(8)(a) AMLATFPUAA. This necessitated the SC to file criminal charges against them in 2020. The charging Ken Ong and Amirruddin bin Nin for failure to complay with the notices lends credence to the SC's contention that these key persons had obstructed investigations. [437] Viewed in that light, I accept the SC's submission that Ricky Wong, Ken Ong and Amirruddin's active non-cooperation and evasion stymied the progress of investigations. The SC cannot be faulted for the delay occasioned by circumstances outside its control. It would be unreasonable to expect an investigation to be concluded expeditiously when suspects and witnesses abscond or refuse to cooperate. [438] That said, the SC did not simply abandon investigations but took concrete steps to compel the appearance of the uncooperative individuals, including obtaining a warrant of arrest and instituting criminal charges. This reflects a diligent and resolute approach to the investigations. [439] Despite the challenges posed by Ricky Wong and others, I find that the SC had diligently pursued investigations to the best of its abilities in the circumstances. Once sufficient evidence was garnered, it promptly initiated this civil action. The SC's diligence and persistence in the face of the challenges fortifies my view that the delay in commencement of proceedings was not undue or inordinate. [440] In light of these challenges and the complexity of the scheme being investigated, I accept that the SC has acted diligently in pursuing its investigation and commencing the suit once it had gathered sufficient evidence to do so. There is no basis to suggest that the SC had unduly delayed in initiating this action. [441] Furthermore, it is pertinent to note that the SC had commenced this suit well within the prescribed limitation period under CMSA. The fact that the action was brought within the statutory time limit is a strong factor militating against a finding of inordinate delay. [442] Section 200(6) of the CMSA provides as follows: “Civil proceedings under subsection (2) or 199(1) may be commenced at any time within twelve years from—
the date on which the cause of action accrued; or
the date on which the Commission or the person who instituted the proceedings, as the case may be, discovered the contravention.” [443] In the present case, the alleged wrongdoings took place between 2013 to 2015. The SC discovered the breaches in 2017 when it commenced investigations. The SC filed this suit on 5.5.2020. Counting from either the date of the alleged contraventions (2013-2015) or from the date of discovery by the SC (2017), the commencement of this action on 5.5.2020 is well within the 12-year statutory limitation period prescribed under Section 200(6) of the [444] The generous limitation period of 12 years for actions of this nature reflects a legislative recognition that securities fraud may take time to unravel, investigate and build a case on. It also evinces a statutory bias in favour of bringing suited parties to account over protecting defendants from stale claims. [445] While Madam Teh strenuously argues that the delay by the SC in commencing this suit has been particularly prejudicial to her, I am unable to accept her contention. [446] Madam Teh's main grouse is that her accounts remained frozen under the AMLATFPUAA proceedings from May 2019 until they were finally released in April 2020, only to be frozen again shortly after in May 2020 when the SC filed the present suit. She contends that this had severely impacted her financial affairs over an extended period, and that the SC had failed to provide reasonable justification for subjecting her to such prejudice based on what she characterises as “mere allegations.” [447] With respect, I am unable to agree with Madam Teh that the freezing of her accounts under the AMLATFPUAA amounts to undue prejudice attributable to delay on the SC's part in initiating the present proceedings. It is important to note that the earlier freezing of Madam Teh's accounts from 2019 to 2020 was pursuant to separate proceedings under the AMLATFPUAA. The SC is statutorily empowered to take such action under the AMLATFPUAA, independent of any potential action under the CMSA. This is clear from the scheme of the AMLATFPUAA, which sets out the SC's responsibilities and powers when it has reasons to believe a financial institution has been used for money laundering. [448] Section 44(1) of AMLATFPUAA empowers an enforcement agency including the SC to issue an order to freeze any property of any person for up to 90 days if an investigation into an unlawful activity has commenced against that person. Section 50(1) AMLATFPUAA allows the Public Prosecutor to seize movable property that is proceeds of an unlawful activity in the possession, custody or control of a financial institution until it is varied or revoked by the Public Prosecutor. These provisions enable the SC to promptly prevent dissipation of assets suspected to be involved in money laundering, even as it continues investigations. [449] The fact that the SC had invoked these powers under the AMLATFPUAA and frozen Madam Teh's accounts while investigations were ongoing cannot, without more, amount to prejudice flowing from a delay in commencing the present suit under the CMSA. The AMLATFPUAA proceedings were a separate matter from the current civil recovery action. [450] As such, any delay in commencing the present suit under the CMSA cannot be conflated with the separate action of freezing Madam Teh's accounts under the AMLATFPUAA. If Madam Teh's complaint is that her accounts were wrongfully frozen under the AMLATFPUAA, her remedy lies in challenging those proceedings, not by attacking the current suit on grounds of delay. [451] In any event, I note that Madam Teh's accounts were indeed released in April 2020, albeit only for a brief one-month period before the current suit was filed. The fact that there was some gap, however brief, between the release of the AMLATFPUAA freeze order and the current injunction fortifies my view that the two actions are separate and distinct. The mere brevity of the intervening period does not, in itself, render the alleged delay in the present proceedings inordinate or unduly prejudicial. [452] Significantly, the SC has also pointed out that despite her complaints about prejudice and impact on her financial affairs, Madam Teh has not substantiated any specific prejudice suffered by her as a result of the alleged delay. She has not particularised any transactions that were thwarted or opportunities that were lost in that one-month period when her accounts were unfrozen. Unsubstantiated allegations of prejudice without tangible evidence do not assist Madam Teh. [453] Accordingly, Madam Teh's unsubstantiated assertions of prejudice are insufficient to warrant a finding that the SC's delay was inordinate. Any prejudice claimed by her as a result of her accounts being frozen has to be considered in the context of the two distinct proceedings and measured against the statutory powers conferred on the SC under each legislation. When viewed through that lens, I am satisfied that there has been no undue delay on the SC's part in commencing the present proceedings that has unduly prejudiced Madam Teh. [454] Accordingly, I find that the SC has provided reasonable justification for the time taken to commence this action against all the Defendants. Proceedings were initiated within the generous statutory limitation period. The nature and complexity of the impugned scheme, the challenges faced by the SC in its investigation including non-cooperation of key individuals, and the absence of any specific prejudice to the Defendants, lead me to conclude that the delay was not undue or inordinate so as to warrant any relief to the Defendants on this ground. I therefore dismiss the Defendant's contention that the ex parte injunction should be set aside for delay in initiating the suit. Whether the ex parte injunction order ought to be set aside as the SC relied on unaffirmed affidavit for ex parte injunction. [455] The SC submits that there is no basis to set aside the ex parte injunction order on the ground that it relied on an unaffirmed affidavit. [456] The SC contends that in the ex parte hearing, this court had properly exercised its discretion under Order 41 Rule 9(2) ROC to accept the unaffirmed affidavit, taking into account the uncertainty in the resumption of business operations and various challenges arising from the COVID-19 pandemic at that time and the urgency of the Injunction Application. [457] The SC points out that it had filed the Injunction Application with a certificate of urgency and provided an express undertaking on two occasions to file the affirmed affidavit in the cover letter filed with the ex parte application and orally during the ex parte hearing, where Counsel for the SC undertook to file the affirmed affidavit by the next working day. [458] The SC submits that this court, while noting the affidavit was not affirmed, exercised its discretion to accept Counsel's undertaking and allowed the affidavit to be relied upon for the ex parte hearing. Subsequently, in compliance with the undertaking, the SC filed the affirmed affidavit with the same contents on the next working day. [459] The SC argues this discretion to allow reliance on an unaffirmed affidavit based on counsel's undertaking to refile is supported by the High Court decision in SS Precast Sdn Bhd v Serba Dinamik Group Bhd & Ors [2020] MLJU 400. [460] Moreover, the SC contends the Defendants have not established any prejudice suffered by them due to the initial use of an unaffirmed affidavit, which was promptly remedied. [461] In conclusion, the SC maintains that the ex parte injunction order should not be set aside on this basis as the court had properly exercised its discretion to allow the unaffirmed affidavit and the SC had duly complied with its undertaking to refile. [462] Ricky Wong and Wong SK Holdings submit that the ex parte freezing injunction obtained by the SC should be set aside as the SC improperly relied on an unsigned and unaffirmed affidavit during the ex parte hearing before the court. [463] They contend that under Order 41 Rule 1(7) ROC, it is a mandatory requirement that every affidavit must be signed by the deponent and the jurat must be signed by the person before whom it is sworn. [464] Ricky Wong and Wong SK Holdings argue that the affidavit relied upon by the SC during the ex parte hearing on
8.5.2020 was not only unaffirmed by the deponent, but was completely unsigned and bare of any signature or jurat at that stage. [465] They submit that such an unsigned and unaffirmed affidavit is rendered invalid and inadmissible under the ROC, and the court should not have placed any reliance on its contents when granting the ex parte injunction. [466] Furthermore, they contend that the SC's delayed attempt to rectify the affidavit by getting it affirmed on 12.5.2020, after obtaining the injunction order, amounts to an impermissible attempt to cure a fatal defect through an afterthought. [467] Madam Teh aligns with and echoes the submissions made by Ricky Wong and Wong SK Holdings on this issue. [468] She further submits that the SC's reliance on an unsigned and unaffirmed affidavit during the ex parte hearing deprived the court of any valid evidence to substantiate the SC's application and amounted to a serious violation of procedural propriety. [469] Madam Teh argues that in failing to place a validly sworn affidavit before the court at the ex parte stage, the SC effectively obtained the injunction order without tendering any evidence whatsoever to justify its case. [470] She contends that this defect goes to the root of the matter and cannot be remedied retrospectively, as it renders the entire ex parte proceedings improperly constituted and a nullity from the outset. [471] In essence, the Defendants collectively submit that the ex parte injunction order was fatally flawed and obtained without any valid evidence, as the SC improperly relied on an unsigned and unaffirmed affidavit in contravention of mandatory rules of procedure. They argue this defect cannot be cured retrospectively. [472] Having carefully considered the submissions of both parties and the authorities cited, I find that there is no basis to set aside the ex parte injunction order on the ground that the SC had relied on an unaffirmed affidavit in obtaining the order. [473] It is not disputed that the affidavit relied upon by the SC during the ex parte hearing on 8.5.2020 was not affirmed by the deponent at that juncture. However, I am satisfied that in the circumstances, it was an appropriate exercise of this court's discretion under Order 41 Rule 9(2) ROC to accept the unaffirmed affidavit for the limited purpose of the ex parte hearing. [474] The SC has provided an explaination why the ex parte injunction should not be set aside on this basis. The SC argues that the Injunction Application was filed urgently amidst the uncertainty and challenges arising from the COVID-19 pandemic, which had disrupted normal business operations. Cognizant of the procedural irregularity, the SC had filed a certificate of urgency and provided express undertakings, both in writing and orally before me during the ex parte hearing, that an affirmed affidavit would be filed promptly. [475] Specifically, in the cover letter to the ex parte application, the SC's solicitors had undertaken to file the affirmed affidavit. Subsequently, during the ex parte hearing itself, Counsel for the SC reiterated this undertaking and committed to filing the affirmed affidavit by the next working day. After noting that the affidavit was not affirmed, the court exercised its discretion to accept Counsel's undertaking and allowed the unaffirmed affidavit to be relied upon for the ex parte hearing in the interest of justice and in view of the urgency of the matter. [476] True to its word, the SC filed an affirmed affidavit with the same contents on 12.5.2020, the next working day after the ex parte hearing on 8.5.2020, thereby complying with the undertaking given to the court. I find that the SC had acted with due diligence to remedy the irregularity at the earliest opportunity. [477] I am fortified in this approach by the recent High Court decision in SS Precast Sdn Bhd v Serba Dinamik Group Bhd & Ors [supra], where Wong Kian Kheong J (as he then was) allowed unaffirmed affidavits to be relied upon based on counsel's undertaking to refile them, pursuant to the court's powers under Order 1A, Order 2 Rule 1(2) and Order 41 Rule 9(2) ROC. His Lordship emphasised that this was done in the wider interest of justice. [478] I am unable to agree with the Defendants' contention that the initial reliance on an unaffirmed affidavit rendered the ex parte proceedings a nullity from the outset. The procedural rules must be interpreted purposively to promote justice and efficiency, not to stifle proceedings through a rigid and inflexible adherence to form over substance. The overarching consideration is whether the justice of the case warranted the exercise of discretion to accept the unaffirmed affidavit provisionally, subject to the SC's undertaking to reaffirm - which was duly fulfilled. [479] The Defendants have not shown any prejudice suffered by them arising from the short delay in affirming the affidavit, which was in any event confined to the ex parte stage. By the time the inter partes hearing of the Injunction Application and setting aside application came around, there was a duly affirmed affidavit before the court. The contents of the affidavit remained unchanged from the version used at the ex parte hearing. [480] Therefore, I find that the SC had provided a satisfactory explanation for the exigency of the circumstances, duly undertook to rectify the irregularity, and complied with its undertaking promptly. This court had exercised its discretion judiciously to accept the unaffirmed affidavit provisionally in the wider interest of justice. No prejudice was occasioned to the Defendants, who had ample opportunity to scrutinise the affirmed affidavit and make full submissions at the inter partes stage. Conclusion [481] In conclusion, having carefully considered the materials before the court, submissions of the parties and the applicable legal principles, I am satisfied that the SC has made out a good arguable case for contravening Section 179 CMSA against the Defendants for perpetrating a fraudulent scheme in relation to the BPI Corporate Exercises. The evidence adduced by the SC demonstrates the Defendants' integral role in and knowledge of the elaborate scheme to siphon RM56 million from BPI through sham transactions and nominee companies. I find that this fraudulent conduct by the Defendants amounts to a breach of a relevant requirement under Section 360 CMSA, empowering this court to grant an injunction to preserve assets pending the outcome of the trial. Accordingly, Enclosure 4, being the SC’s application for a worldwide Mareva injunction to restrain the Defendants from disposing of assets up to RM169,223,500.00, is allowed with costs. [482] The Defendants have not shown any basis for setting aside the Ex Parte Injunction Order granted earlier on 8.5.2020. I am not convinced by the Defendants' arguments that the SC had failed to make full and frank disclosure, acted in bad faith or caused inordinate delay in commencing the action. I further find no merit in the contention that reliance on an unaffirmed affidavit during the ex parte hearing was fatal to the entire proceedings. In the circumstances, Enclosures 39 and 46, being the applications by the Madam Teh, and Ricky Wong and Wong SK Holdings respectively to set aside the ex parte injunction order, are dismissed with costs. [483] The court orders costs of RM60,000 to be paid by Ricky Wong and Wong SK Holdings to the SC in respect of Enclosures 4 and 46 and costs of RM60,000 to be paid by Madam Teh to the SC in respect of Enclosures 4 and 39. 8 April 2024 ATAN MUSTAFFA YUSSOF AHMAD Judge Kuala Lumpur High Court (Commercial Division) Counsel: For the Plaintiff: Dato' Lim Chee Wee, Kwan Will Sen, Joyce Lim Hwee Yin, Annabel Tan Sher May, Esther Hong Hui Jun, Cheryl Yee Jia Le (Pupil in Chambers), Nurul Rafeeza Hamdan and Keith Loo Kit Ming (Messrs Lim Chee Wee Partnership) For the 1st and 3rd Defendants: Robert Low, Ivanpal Singh Grewal, Karen Yong, Chong Lip Yi and Khong Mei Yan (Messrs. A.J. Ariffin, Yeo & Harpal) For the 2nd Defendant: Gopal Sreenevasan, Saw Wei Siang, Elizabeth Lau, Michelle Teoh and Mahdev Singh Sachdev (Pupil in Chambers) (Messrs. Nethi & Saw)

And

WONG SHEE KAI

(nric No.: 811212-14-5957)

TEH SEW WAN

(nric No.: 500127-10-5696)

WONG SK HOLDINGS SDN. BHD. (COMPANY NO.: 729123-K) ... DEFENDANTS JUDGMENT INTRODUCTION [1] This judgment concerns an application by the Plaintiff Securities Commission Malaysia (“the SC”) for an inter partes injunction order to restrain the Defendants from disposing of assets up to RM169,223,500 pending the determination of the main suit, as well as applications by the Defendants to set aside an earlier ex parte injunction order granted on 8.5.2020. The SC alleges that the Defendants had orchestrated three corporate exercises carried out by Bright Packaging Industry Berhad (“BPI”) between 2013 and 2015, causing substantial portions of the proceeds raised, amounting to RM56,074,500.00, to be paid out to various nominee companies controlled by the Defendants before being transferred to the Defendants themselves. The SC claims this amounts to a scheme to defraud BPI and a contravention of Sections 179(a) and/or 179(b) of the Capital Markets and Services Act 2007 (“CMSA”), resulting in a loss of RM56,074,500.00 to BPI. The key issues before the court are whether the SC has the statutory power to obtain the injunctions, whether the SC has made out a good arguable case of fraud against the Defendants, whether there is a real risk of asset dissipation by the Defendants to justify the grant of an injunction, and whether the earlier ex parte injunction order should be set aside. This judgment will examine the facts, the applicable legal principles and the merits of the applications before arriving at a decision. BACKGROUND FACTS [2] On 5.5.2020, the SC filed a civil suit against the Defendants Wong Shee Kai (“Ricky Wong”), Teh Sew Wan (“Madam Teh”) and Wong SK Holdings Sdn Bhd (“Wong SK Holdings”) in this instant suit. [3] The SC's claim relates to three corporate exercises carried out by BPI between 2013 and 2015: a) A Rights Issue Exercise, which was announced on Bursa Malaysia on 14.10.2013 and completed on 23.1.2014, raising a total of RM47,613,390.00. b) A Private Placement Exercise, which was announced on Bursa Malaysia on 4.6.2014 and completed on 30.7.2014, raising a total of RM7,791,000.00. c) An Employee Share Option Scheme (“ESOS”) which was announced on Bursa Malaysia on 18.4.2014. The 1st round of ESOS was completed on 24.2.2015, raising RM9,300,000.00. The 2nd round was completed on 24.4.2015, raising RM3,983,500.00. (together referred to as (“BPI Corporate Exercises”) [4] BPI is a public company listed on the Main Market of Bursa Malaysia Securities Berhad. Its business involves manufacturing aluminium foil packaging materials and investment holding. At the material time, the directors of BPI included Datuk Seri Syed Ali Bin Tan Sri Abbas Alhabshee, Nik Mustapha bin Muhamad, Yap Kok Eng, Yeong Siew Lee, Lye Jun Fei and Tee Wee Keat. [5] The 1st Defendant Ricky Wong is the son of the 2nd Defendant Madam Teh. They are the only two directors and shareholders of the 3rd Defendant Wong SK Holdings, which emerged as a substantial shareholder of BPI on 10.10.2013 and is currently BPI's largest shareholder with a 32.94% stake. [6] Ken Ong, who was previously the Group Accountant of Asia Media Group where he reported to Ricky Wong, was at all material times the Project Accountant of BPI and played an active role in the affairs of BPI, including the corporate exercises. He was appointed by the BPI Board as BPI's representative in the Rights Issue Exercise and as the authorised signatory for documents relating to the Private Placement Exercise. [7] The proceeds raised from the three corporate exercises were expected to be utilised for various business purposes of BPI, such as purchasing additional production lines, upgrading existing production lines, an Enterprise Resources Planning (ERP) system and working capital. [8] However, the SC alleges that substantial portions of the proceeds raised, amounting to RM56,074,500.00 in total, were paid out by BPI to various nominee companies of the Defendants based on fictitious transactions, before being eventually transferred to the bank accounts of Ricky Wong and Wong SK Holdings. The nominee companies involved include Asia Media Sdn Bhd (“Asia Media”), BTV Cinebus Sdn Bhd (“BTV Cinebus”), Transnet (JB) Sdn Bhd (“Transnet”), Matrix Angle Sdn Bhd (“Matrix Angle”), Sierra Broadway Sdn Bhd (“Sierra Broadway”), Warisan Serantau Sdn Bhd (“Warisan Serantau”) and several others. The directors of some of these nominee companies included Amirruddin bin Nin. [9] The SC claims that the Defendants had orchestrated the corporate exercises and caused the proceeds to be paid out in this manner as part of manipulative devices, schemes and artifices to defraud BPI, thereby contravening Sections 179(a) and/or 179(b) CMSA. As a result, BPI is alleged to have suffered a loss of RM56,074,500.00. [10] Prior to filing the suit, the SC had taken steps around May to August 2019 to freeze and seize bank accounts belonging to the Defendants under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (“AMLATFPUAA”). However, on 1.4.2020, the Public Prosecutor issued revocation orders to release unconditionally all of Madam Teh's personal bank accounts that were seized earlier. [11] On 19.2.2020, Ken Ong and Amirruddin bin Nin were charged by the SC under Section 32(8)(a) of the AMLATFPUAA for failing to comply with notices issued by the SC's Investigating Officer in 2017 and 2018 requiring them to attend before the said officer to have their statements recorded pertaining to this matter. [12] On 6.5.2020, the SC filed an application in Enclosure 4 (“Injunction Application”) for an interim worldwide Mareva injunction to restrain the Defendants from disposing assets up to RM171,223,500.00, relying on Sections 360(2), 360(1)(D), 360(1)(N) and/or 360(1)(P) CMSA. The SC also sought disclosure of the Defendants' assets. This ex parte Injunction Application was granted by this court on 8.5.2020 via an ex parte Injunction Order in Enclosure 17 (“Ex Parte Injunction Order”). [13] Between 5.6.2020 and 9.6.2020, the Defendants filed applications under Enclosures 39 and 46 to set aside the Ex Parte Injunction

Order

para

(together, “Setting Aside Applications”). The inter partes hearing of the SC's Injunction Application and the Defendants' Setting Aside Applications was fixed on 15.7.2020. THE SC'S PLEADED CASE [14] The SC's pleaded case against the Ricky Wong, Madam Teh and Wong SK Holdings is sumamrised as below. [15] The SC claims that Ricky Wong, Madam Teh and Wong SK Holdings have contravened sections 179(a) and/or 179(b) CMSA by using devices, schemes or artifices to defraud BPI and/or engaging in acts, practices or courses of business which operated as a fraud upon BPI. [16] This relates to the BPI Corporate Exercises carried out by BPI - a Rights Issue Exercise, a Private Placement Exercise and ESOS. The SC alleges that the Defendants caused the proceeds raised by BPI from these corporate exercises to be paid out by BPI to purported suppliers of BPI (which were actually nominee companies of the Defendants) based on fictitious transactions. The monies were then channeled to the defendants. [17] In particular, for the Rights Issue, RM35 million out of the RM47.6 million raised was siphoned to Ricky Wong this way. For the Private Placement, the entire RM7.8 million raised was siphoned to Ricky Wong. For the ESOS, RM9.3 million was channeled to Wong SK Holdings while another RM4 million went to Ricky Wong. [18] The SC contends that as a result of these fraudulent schemes, Ricky Wong and/or Madam Teh made an unlawful gain of RM46.8 million while Madam Teh and/or Wong SK Holdings made an unlawful gain of RM9.3 million. BPI had suffered a total loss of RM56 million. [19] The SC is seeking the following key reliefs: a) A declaration that the defendants contravened the CMSA; b) An order for the defendants to pay the SC 3 times the amount of unlawful gains made by them; c) Civil penalties of RM1 million each against the defendants; d) An order to restrain the defendants from dealing with their assets up to up to RM169,223,500 (referred to as “RM169 million” for convenience); and e) An order to bar Ricky Wong and Madam Teh from being directors of public companies. THE APPLICATIONS [20] In the SC's Injunction Application (Enclosure 4) it is seeking an interim worldwide Mareva injunction to restrain the Defendants from disposing of or dealing with their assets up to RM169 million pending determination of the main suit. The SC also seeks for an order for disclosure of the Defendants' assets. [21] The SC's grounds are: a) It appears the Defendants have contravened s.179(a) and/or CMSA by engaging in manipulative and deceptive devices/schemes to defraud BPI in its corporate exercises. b) The Defendants made unlawful pecuniary gains of at least RM56 million from the fraud. c) It is desirable for the court to grant the interim injunction under Section 360(2) CMSA pending the suit to preserve assets and mitigate dissipation risk. d) The trite requirements for a Mareva injunction are met: good arguable case, real risk of dissipation, balance of convenience. [22] In Ricky Wong and Wong SK Holdings' Setting Aside Application (Enclosure 46) they are seeking to set aside the Ex Parte Injunction Order dated 8.5.2020. [23] Their grounds are: a) There is no cause of action under s.179 CMSA as its elements are absent. b) There is bad faith and abuse of process by the SC in commencing this suit after its action under anti-money laundering laws. c) There is delay by the SC in commencing this suit. d) The SC relied on an unaffirmed affidavit for an ex parte injunction. [24] In Madam Teh's Setting Aside Application (Enclosure 39), she is seeking to set aside the Ex Parte Injunction Order dated 8.5.2020. [25] Her grounds are: a) Her personal accounts released by prosecutors were re-frozen, showing bad faith by the SC. b) There is material non-disclosure by the SC in obtaining the ex parte injunction. c) There is no risk of asset dissipation and there is delay by the SC. d) The SC relied on a defective unaffirmed affidavit. EX PARTE INJUNCTION ORDER [26] The Ex Parte Injunction Order is a worldwide Mareva injunction to freeze the Defendants' assets up to RM169 million coupled with disclosure orders, pending the full inter partes hearing of the SC's Injunction Application. It was obtained ex parte by the SC based on its investigations into the Defendants' alleged fraud and breaches of securities laws pertaining to BPI's corporate exercises. [27] The key terms of the Ex Parte Injunction Order are: a) The Defendants are restrained from disposing of or dealing with their assets in and outside Malaysia up to the value of RM169,223,500. This covers monies in specified bank accounts and shares held by Wong SK Holdings in BPI. b) The Defendants must disclose to the SC within 10 days full accounts of the sums collectively received from certain companies pertaining to BPI's Rights Issue (RM35 million), Private Placement (RM7.791 million) and ESOS (RM13,283,500); details of all their assets in and outside Malaysia and discovery of documents evidencing the information. c) The order takes effect pending an inter partes hearing. d) The SC is exempted from the requirement to give an undertaking as to damages for the ex parte order, pursuant to s.360(5) CMSA. SUBMISSIONS The SC’s submissions [28] The SC's submissions in respect of Enclosures 4, 39 and 46 are summarised as follows: a) Enclosure 4, the SC's application for a worldwide Mareva injunction against the Defendants, should be allowed as the statutory requirements under Section 360 CMSA have been met and alternatively, the common law requirements for a Mareva injunction have been satisfied. b) Enclosures 39 and 46, the Defendants’ applications to set aside the ex parte injunction order should be dismissed as: (a) There was no material non-disclosure by the SC in obtaining the ex parte order;

the SC had provided an undertaking to file an affirmed affidavit which was accepted by the court;

There was no delay or bad faith by the SC in commencing the action; (d) The injunction is not undermined by the SC's earlier action under anti-money laundering laws; and (e) In respect of Enclosure 39, release of Madam Teh's accounts under AMLATFPUAA does not preclude a fresh injunction under CMSA. c) The SC has pleaded a good arguable case against each defendant for contravening Section 179 CMSA enabling the SC to seek a freezing injunction. d) Knowledge and intent to defraud can be inferred from each defendant's role in the scheme, with further evidence to be adduced at trial. e) Based on each defendant's conduct and the nature of the scheme itself, there is a real risk of dissipation of assets to frustrate any judgment. f) In respect of Enclosure 4, an undertaking as to damages is not required from the SC under Section 360(5) CMSA and established principles for public authorities enforcing the law. g) In respect of Enclosures 46 and 39, the quantum of the worldwide injunction is justified and not oppressive given the nature of the SC's joint and several claim against all Defendants. Ricky Wong and Wong SK Holdings' submissions [29] Ricky Wong and Wong SK Holdings' submissions in respect of Enclosures 4 and 46 are summarised as follows: a) The SC lacks the statutory power under Section 360 CMSA to obtain freezing injunctions against alleged breaches of Section 179, as Section 179 is a prohibition and not a “relevant requirement” under Section 360(13). b) The SC has failed to establish a good arguable case that they contravened Section 179(a) and (b) CMSA, as the SC's pleadings do not assert they had the requisite knowledge or intent to defraud in relation to the BPI corporate exercises. c) There is an absence of evidence that they derived any unlawful pecuniary gains from the alleged fraudulent schemes related to BP Corporate Exercises. d) The SC has not demonstrated a real risk of them dissipating or improperly dealing with their assets to frustrate any final judgment. e) The freezing limit of RM169 million is oppressive and disproportionate as it exceeds the alleged unlawful gains based on the SC's pleaded case and extends improperly to discretionary penalty elements. [30] Their submissions specific to the setting aside application (Enclosure 46) are: a) The SC failed to make full and frank disclosure by not informing the court that seizure orders over their accounts had already been revoked before obtaining the ex parte injunction. b) The SC acted in bad faith and abused the process by commencing this civil suit after failing to obtain consent from the Public Prosecutor to continue the earlier AMLATFPUAA criminal proceedings against them. c) There was inordinate delay by the SC in filing this suit around 3 years after commencing investigations, causing prejudice by keeping their assets frozen for a prolonged period. d) The Ex Parte Injunction Order should be set aside as the SC improperly relied on an unaffirmed and unsigned affidavit which rendered the proceedings fatally flawed. Madam Teh's submissions [31] Madam Teh's submissions in respect of Enclosures 4 and 39 are summarised as follows: a) The SC lacks statutory power under Section 360 CMSA to obtain a freezing injunction against her for an alleged breach of Section 179, as Section 179 is a prohibition, not a “relevant requirement” covered under Section 360(13) CMSA. b) Even if Section 360 applied, the SC has failed to establish a good arguable case against her under Section 179, as its pleadings do not assert she had knowledge or intent to defraud in relation to her conduct as a signatory for BPI. c) There is a complete absence of evidence that she personally received any pecuniary gains from the alleged fraudulent schemes related to BP Corporate Exercises. d) Her conduct of not transferring funds when her accounts were temporarily unfrozen negates any real risk of her dissipating assets. e) The freezing sum of RM169 million against her is staggeringly excessive and oppressive, as her potential unlawful gain based on her tiny 0.001% shareholding would only amount to around RM543 at most. [32] Her submissions specific to the setting aside application (Enclosure 39) are: a) The SC failed to make full and frank disclosure by not informing the court that seizure orders over her accounts had already been lifted by the Public Prosecutor before obtaining the ex parte injunction. b) The SC acted in bad faith by re-freezing her accounts through this civil suit after they were unconditionally released in the prior AMLATFPUAA criminal proceedings against her. c) The prejudicial delay by the SC in filing this suit years after investigations resulted in her funds remaining frozen for an inordinately long period. d) The Ex Parte Injunction Order should be discharged as the SC improperly relied on an unaffirmed affidavit, rendering the proceedings fatally flawed from the outset. SALIENT STATUTORY PROVISIONS [33] The CMSA is the primary legislation governing Malaysia's capital markets. It provides a comprehensive regulatory framework to promote market integrity and protect investors. Among its key provisions are those that prohibit fraudulent and manipulative conduct in relation to securities, and those that empower the SC to institute civil proceedings against persons who contravene these provisions. [34] Section 179 CMSA is a crucial provision that prohibits the use of manipulative and deceptive devices in connection with the subscription, purchase or sale of securities. It states: “It shall be unlawful for any person, directly or indirectly in connection with the subscription, purchase or sale of any securities-

to use any device, scheme or artifice to defraud;

to engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person; or

to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements, made in the light of the circumstances under which they were made, not misleading.” [35] This wide-reaching anti-fraud provision aims to maintain fair and honest practices in the securities industry by prohibiting conduct that deceives or misleads investors. [36] To enforce Section 179 and other key provisions, the CMSA grants the SC the power under Section 200 to institute civil proceedings against any person who has contravened Part VI of the Act, which includes Section 179. Section 200(1) provides: “Where it appears to the Commission that any person has contravened Section 175, 176, 177, 178, 179 or 181, the Commission may institute civil proceedings in the court against that person, whether or not that person has been charged with an offence in respect of the contravention, or whether or not a contravention has been proved in a prosecution.” [37] Significantly, the SC can commence civil proceedings regardless of whether criminal charges have been instituted or proven against the contravening person. This allows the SC to enforce the securities laws through either criminal prosecution, civil action, or both. [38] When the SC files a civil suit under Section 200, the court is empowered under Section 360 CMSA to make various orders if it appears to the court that a person has contravened a “relevant requirement” under the securities laws. Section 360(1) states the circumstances under which the court may make such orders. It reads: “360 Power of court to make certain orders

Where-

on an application by the Commission, it appears to the court that-

there is reasonable likelihood that any person will contravene a relevant requirement;

(ii) any person has contravened a relevant requirement; or

III

(iii) any person has contravened a relevant requirement and that there are steps which could be taken to remedy the contravention or to mitigate the effect of such contravention, including making restitution to any other person aggrieved by such contravention whether or not that person has been charged with an offence in respect of the contravention or whether or not a contravention has been proved in a prosecution; the court may, without prejudice to any order it would be entitled to make otherwise than pursuant to this Section, make one or more of the following orders...” [39] The types of orders the court can grant are extensive, including under Section 360(1)(D) “an order restraining the person from acquiring, disposing of or otherwise dealing with, assets which the court is satisfied such person is reasonably likely to dispose of or otherwise deal with”. [40] Importantly, Section 360(2) CMSA allows the court to grant an interim order of the kind applied for under Section 360(1) pending the final determination of the SC's application. This permits the court to act preemptively to preserve assets and prevent dissipation while the merits of the SC's case are being determined. Section 360(2) reads: “If an application is made to a court for an order under subsection (1), the court may, if in its opinion it is desirable to do so, before considering the application, make an interim order of the kind applied for and such order shall be expressed to have effect pending the determination of the application.” [41] Collectively, sections 179, 200 and 360 CMSA form a framework for the SC to pursue civil enforcement against securities fraud and to secure court orders to restrain such misconduct and preserve assets. ANALYSIS AND FINDINGS OF THE COURT Issues applicable to Enclosures 4, 39 and 46 Whether the SC has power under Section 360 CMSA to apply for a freezing injunction against the Defendants for an alleged breach of Section 179 CMSA. [42] A pivotal issue is whether the SC has the statutory power to apply for injunctive relief under Section 360 CMSA for an alleged breach of Section 179, which prohibits the use of manipulative and deceptive devices in connection with the subscription, purchase or sale of securities. [43] Madam Teh's position is that the SC lacks the statutory power under Section 360 CMSA to apply for a freezing injunction against her and the other defendants for an alleged breach of Section 179 CMSA. This is because Section 179, which the SC's claim is premised upon, is a prohibition on certain conduct rather than a “relevant requirement” as defined under Section 360(13) CMSA. A “relevant requirement” under 360(13) refers to requirements imposed by the CMSA itself, securities laws, licensing conditions, stock exchange rules, or other laws where the SC has prosecutorial powers. However, Section 179 does not impose any requirement but merely prohibits fraudulent devices, acts or statements in securities transactions. [44] Madam the relies on the Court of Appeal decision in Lai Soon Oon v Chew Fei Meng & Others Appeals [2018] 10 CLJ 48 which has interpreted what constitutes a “relevant requirement” under Section 360, thereby excluding prohibitions like Section 179 from its ambit. Madam Teh argues that a penal provision such as Section 179 must be construed strictly and cannot be stretched through an expansive interpretation of “relevant requirement”. [45] Ricky Wong and Wong SK Holdings aligns with Madam Teh's position that Section 360 cannot be invoked by the SC based on an alleged breach of Section 179. They contend that the SC, as a creature of statute, cannot exercise powers beyond what is conferred by the CMSA and the Securities Commission Malaysia Act 1993 (“SCMA”). [46] They argue that the SC's reliance on Section 179 as a “relevant requirement” triggering Section 360 is seriously misconceived, as Section 179 is clearly a penal provision prescribing offences rather than imposing requirements. Ricky Wong and Wong SK Holdings emphasise that Section 179 relates to prohibitions “in connection with subscription, purchase or sale of securities”, which does not cover the SC's complaints about subsequent events involving BPI's corporate exercise proceeds. Like Madam Teh, they cite the Lai Soon Onn decision to assert that Section 360 cannot be expansively interpreted to encompass Section 179 breaches. [47] Wong SK Holdings particularly stresses that Section 179 is housed under the “Prohibited Conduct” part CMSA and explicitly attracts criminal penalties under Section 182. As such, it cannot be construed as a “relevant requirement” under the civil Section 360 proceedings. It argues that the court must adopt a strict interpretation of Section 179 as a penal provision, rather than accepting the SC's liberal interpretation of “relevant requirement” under Section 360(13). It reiterates that the Court of Appeal's guidance in Lai Soon Onn on the scope of “relevant requirement” is binding and does not extend to Section 179. [48] The SC's position is that Section 179 CMSA is a “relevant requirement” under Section 360 CMSA, even though it does not contain the word “requirement” and is prohibitory in nature. This is supported by: a) Malaysian court decisions like Yii Chee Ming v Yu Chee Hoe & Ors [2018] 8 MLJ 680 (HC) which held that the phrase “relevant requirement” should be given its ordinary meaning as a requirement imposed by or under the CMSA, including Section 179. b) UK court cases interpreting similar provisions in the Financial Services Markets Act 2000, where prohibitory provisions without the word “requirement” were considered “relevant requirements”. c) Malaysian and UK cases showing a contravention of a “relevant requirement” can include a breach of a prohibited conduct. d) Distinguishing the Lai Soon Onn case relied on by the Defendants, as that dealt with the specific context of the Takeover Code and a private plaintiff's right of action. [49] The SC has pleaded sufficient facts alleging the Defendants contravened Section 179 CMSA and committed fraud, including specific allegations that the Defendants used devices, schemes or artifices to defraud and engaged in acts, practices or courses of business which operated as a fraud. [50] The SC argues the elements of Section 179(a) and/or (b) CMSA are met based on the facts, and cautions against wholesale adoption of elements from U.S. cases without proper context. [51] The declaratory order sought by the SC is sustainable as it relates to a civil claim under Section 179, not a criminal offence under Section 182. [52] Therefore, the SC submits it has the power under Section 360 to apply for a freezing injunction against the Defendants for the alleged breach of Section 179. [53] Upon careful consideration of the authorities cited and submissions by both parties, I am persuaded that the SC's contention is correct in law. The Defendants' heavy reliance on Lai Soon Onn v Chew Fei Meng & other appeals [supra] is misplaced, as that case is clearly distinguishable from the present. [54] Firstly, the Court of Appeal in Lai Soon Onn was considering a specific private action to enforce the Malaysian Code on Take-Overs and Mergers under the CMSA, not an action brought by the SC itself. This is evident from paragraph 10 of the judgment where the court noted that: “The plaintiff in his statement of claim sought for, inter alia, declaratory as well as other reliefs that:

D1-D4 were persons acting in concert to obtain control of D5; (b) D1-D4 had contravened s. 218(2) of the CMSA and s. 9(1) of the Take-Over Code upon their failure to undertake an MGO for the shares in D5; (c) Damages for the losses suffered by the plaintiff as a result of the alleged breach of statutory duties by D1-D4; and (d) An order to compel D1-D4 to undertake an MGO.” [55] The policy considerations in restricting a private individual's recourse differ from those applicable when the SC acts in its regulatory capacity. [56] Secondly, the legal issue in Lai Soon Onn pertained to whether non-compliance with the Take-Over Code amounted to a breach of a “relevant requirement”. At paragraph 52, the Court of Appeal framed the question as “whether compliance with the Take-Over Code is a “relevant requirement” under the CMSA.” The court's observations on the interpretation of “relevant requirement” must therefore be understood in that specific factual matrix, which involved the intersection between Sections 217 to 220 and Section 360 of the CMSA. These provisions and their interplay do not arise for consideration here. [57] Thirdly, the Court of Appeal's ultimate decision rested on avoiding conflicts between the SC's role under the Take-Over Code regime and court orders under Section 360, as well as preserving the SC's discretion under Section 219 to grant exemptions. The court held at paragraphs 58-59: “[58] We agree with the submission of counsel for D3, that if the phrase “relevant requirement” in s. 360 of the CMSA applies to division 2 part VI of the CMSA (in which s. 220 is part therein), then it would render s. 220 superfluous as it would result in overlapping with s. 360(1)(a) of the CMSA. To interpret and construe such that the SC has the right of recourse against non-compliance with the Take-Over Code pursuant to s. 220 and 360 of the CMSA is not harmonious but absurd. [59] In addition, s. 219 of the CMSA confers on the SC the statutory right to grant exemption in writing to any person from the provisions of division 2, the Take-Over Code and any ruling made under s. 217(4) of the same. Parliament would be acting in vain in enacting s. 219 of the CMSA if the courts are conferred with the power to take away the statutory right accorded to the SC under s. 360 of the same.” [58] Such concerns do not apply in the instant case, where the SC is invoking Section 360 in relation to breaches of provisions under Part V of the CMSA concerning market misconduct. [59] Fourthly, as observed in Yii Chee Ming v Yu Chee Hoe & Ors [supra], the Court of Appeal in Lai Soon Onn did not have occasion to examine Section 360 from the perspective of SC actions. The High Court in Yii Chee Ming (affirmed by the Court of Appeal) rightly noted that a restrictive reading of “relevant requirement” based on the presence of that term would mean “even the SC would not be able to rely on s 360(1) of the CMSA for reliefs pertaining to the contravention or breach of s 317 of the CMSA as the word 'requirement' is absent in that provision.” The limited ratio decidendi of Lai Soon Onn should not be extended to constrain the SC's statutory powers to address securities law violations and protect investors. Such an outcome would be contrary to the CMSA's purposes. [60] The upshot of this is that Lai Soon Onn was principally concerned with avoiding inconsistency between Sections 220 and 360 in relation to the Take-Over Code, and preserving the SC's exclusive authority to regulate take-overs and grant exemptions. This is far removed from the present case where the SC itself is invoking Section 360 to restrain a breach of Section 179, a prohibited conduct under

Part

Part V CMSA on market misconduct. The Court of Appeal in

Content

Lai Soon Onn did not deal with the SC enforcing Section

179

There is no question of usurping the SC's powers here. [61] Furthermore, a closer reading of Lai Soon Onn reveals that the Court of Appeal did not go so far as to suggest that all provisions under the CMSA which do not contain the word “requirement” are automatically excluded from the ambit of Section 360. Rather, at paragraph 57, the court cited with apparent approval the Federal Court case of Suruhanjaya Sekuriti v Datuk Ishak bin Ismail [2016] 1 MLJ 733 as an illustration that “Section 360 CMSA provides a recourse for the SC to obtain certain orders from the courts if there is a contravention of a “relevant requirement”.” The court's focus was more on interpreting whether compliance with the Take-Over Code constituted a “relevant requirement” under Section 360(13)(c), rather than making a blanket exclusion of all CMSA provisions that omit the word “requirement”. Crucially, that case involved prohibited conduct under Part V CMSA (specifically Sections 177 and 188) for which ex parte interim orders were granted to the SC pursuant to Section 360, even though those sections do not use the word “requirement”. This strongly suggests that the Court of Appeal in Lai Soon Onn recognised, at least implicitly, that a breach of provisions under Part V on market misconduct could amount to a contravention of a “relevant requirement”, irrespective of the terminology. [62] As such, I find that Lai Soon Onn does not assist the Defendants' case and can be distinguished on multiple fronts. It does not preclude the SC from seeking injunctive relief against a breach of Section 179 under the broad rubric of Section 360 CMSA. [63] Crucially, there is ample judicial authority that supports a broad reading of “relevant requirement” under Section 360 CMSA to include a breach of prohibited conduct, even if the provision does not employ the term “requirement”. [64] This is most clearly exemplified in Securities Commission v Chan Chui Mei [2019] 12 MLJ 817, a case directly on point as it involved Section 179 CMSA. There, the High Court dealt with an interlocutory injunction application by the SC under Section 360(2) premised on a breach of Section 179. In granting the injunction, Has Zanah Mehat J (as she then was) held that the SC had shown a good arguable case against the defendant under Section 179, and that “a contravention of Section 179 CMSA is a relevant requirement for purposes of Section 360 CMSA.” Subsequently, in allowing the SC's claim on the merits, Mohamed Zaini Mazlan J (as he then was), in Securities Commission v Chan Chui Mei [2019] MLJU 1539, found the defendant liable for defrauding a listed company under Section 179, prohibited conduct of a director under Section 317A, and abetting provision under Section 370. The court then proceeded to grant wide-ranging orders under Section 360 including a bar on being a director and restitution. The clear implication is that a breach of the market misconduct provisions in Part V CMSA, including Section 179, constitutes a contravention of a “relevant requirement” that enlivens the court's powers under Section 360. [65] This approach of treating breaches of prohibited conduct without any mention of “requirement” as falling within Section 360 is also discernible in Securities Commission v Ishak bin Ismail [2010] MLJU 1194. The High Court granted an ex parte interim injunction and order for disclosure of assets under Section 360(2) in respect of contraventions of Section 177 (false or misleading statements) and Section 188 (insider trading) CMSA, even though neither provision uses the word “requirement”. [66] Securities Commission v Lee Kee Sien, Albert & Ors [2009] 8 CLJ 70 is to similar effect, where an interim injunction was granted under the former Section 100 of the Securities Industry Act 1983 (the precursor to Section 360) for breaches of Sections 14 and 15A which relates to prohibited conduct in making misleading statements inducing securities transactions. [67] Likewise, in APFT Berhad v Dato Faruk Othman [2018] 1 LNS 1589, the High Court held that a breach of Paragraph 16.3 of the Bursa Malaysia Main Market Listing Requirements, which provides for a prohibited conduct, amounted to a contravention of a relevant requirement within the meaning of Section 360(13)(c)(iii) CMSA even though Paragraph 16.3 does not contain the word “requirement”. An injunction was granted to restrain the defendant from dealing with his shares. [68] Viewed in totality, this line of authorities evinces our courts' willingness to adopt an expansive reading of “relevant requirement” that does not hinge on the presence of that precise term, but focuses instead on whether the impugned conduct is proscribed under securities laws administered by the SC. Such judicial approach is consonant with the objectives of market regulation and allows the SC to take prompt action to protect investors and market integrity against a broad range of prohibited conduct. It would be wholly incongruous if contraventions as egregious as fraud, manipulation, false trading and insider dealing under Part V CMSA are to fall outside the purview of Section 360 merely because of infelicitous language. The mischief and purpose of the statute must prevail over an overly restrictive literal interpretation. [69] It is pertinent to note that the Federal Court case of Suruhanjaya Sekuriti v Datuk Ishak Ismail [2016] 3 CLJ 19 involved prohibited conduct under Part V CMSA, specifically false or misleading statements under Section 177 and insider trading under Section 188. Neither of those provisions mention the word “requirement”. Yet, at paragraph 4 of the Federal Court's judgment, it was noted without any disapproval that the High Court had earlier granted an ex parte interim order under Section 360 of the CMSA to restrain the respondent from dissipating funds believed to be proceeds of offences under the securities law. [70] The inescapable conclusion is that the Federal Court and the High Court below accepted that breaches of Sections 177 and 188, both being prohibited conduct provisions within Part V CMSA that do not use the term “requirement”, are nevertheless amenable to the grant of injunctive and other ancillary relief under Section 360. [71] By parity of reasoning, contraventions of Section 179, which similarly prohibits the use of manipulative and deceptive devices under Part V, must also constitute a breach of a “relevant requirement” under Section 360. It would be wholly illogical and arbitrary for the Court of Appeal in Lai Soon Onn to endorse the invocation of Section 360 for breaches of Sections 177 and 188, but exclude Section 179 from its purview merely because of the draftsman's choice of words. Such a technical and blinkered reading would lead to the absurd result of rendering nugatory the SC's ability to combat a wide range of serious market misconduct that the CMSA was designed to address. [72] The fact that the SC has pleaded sufficient facts alleging the Defendants contravened Section 179 and committed fraud, including specific allegations that the Defendants used devices, schemes or artifices to defraud and engaged in acts, practices or courses of business which operated as a fraud, further reinforces the conclusion that the SC's application against the alleged breach of Section 179 falls squarely within the ambit of Section 360. [73] The fact that the Court of Appeal cited the Federal Court decision in Suruhanjaya Sekuriti v Datuk Ishak bin Ismail in the context of elucidating the SC's powers under Section 360 therefore raises at the very least a strong presumption that contraventions of Part V CMSA, of which Section 179 is a part, are capable of falling within the rubric of “relevant requirement” irrespective of the precise terminology employed. While not conclusive, it militates against the Defendant's assertion that Lai Soon Onn has decisively confined “relevant requirement” only to provisions that explicitly adopt that phrase. Such an artificial distinction finds no basis in the language and purpose of Section 360. [74] I am also fortified in my view by the position adopted by the courts in the United Kingdom, where the statutory scheme governing injunctions and restitution orders closely mirrors our own. Sections 380 and 382 of the Financial Services and Markets Act 2000 (“FSMA”) empower the Financial Conduct Authority to apply for injunctions and restitution orders where there is or is likely to be a contravention of a “relevant requirement”. The definition of “relevant requirement” in Sections 380(6)(a)(i) and 382(9)(a)(i) of the FSMA as “a requirement which is imposed by or under this Act” or “by Part 7 of the Financial Services Act 2012” bears striking resemblance to our Section 360(13)(a)(i) which refers to “a requirement which is imposed by or under this Act or any securities law”. [75] Notably, in Financial Services Authority v Sinaloa Gold plc and others (Barclays Bank plc intervening) [2013] UKSC 11, [2013] 2 AC 28, the UK Supreme Court held that the meaning of “relevant requirement” under Section 380(6)(a) of the FSMA included the requirement under Section 19 of the FSMA to be authorised or exempt before carrying on a regulated activity, even though Section 19 does not contain the word “requirement”. As the court explained at paragraph 10, a “relevant requirement” includes “a requirement which is imposed by or under this Act” and therefore covers the requirement under Section 19. [76] Similarly, in Financial Conduct Authority v Avacade Ltd (in liquidation) (trading as Avacade Investment Options) and others [2020] EWHC 1673 (Ch), the English High Court found that the meaning of “relevant requirement” under Section 382 of the FSMA is a broad one, encompassing contraventions of Sections 19 and 21 of the FSMA (prohibitions against carrying on regulated activities without authorisation and restrictions on financial promotions respectively) as well as Section 89 of the Financial Services Act 2012 which relates to misleading statements. None of those provisions mention “requirement”. At paragraphs 449 and 450, Adam Johnson QC (sitting as a Deputy Judge of the High Court) held: “[449]...In FCA v Capital Alternatives [2018] 3 WLUK 623, HHJ McCahill QC considered the position at [789-796]. As pointed out by the FCA, the Judge cited with apparent approval passages from the Encyclopaedia of Financial Services (loose leaf), to the effect that s.382 is intended to apply to “any breach of the regulatory regime” including prohibitions, whether they amount to criminal offences or regulatory infractions... [450] On that basis, the following matters relied on in this case are all “relevant requirements” for the purpose of s.382: contraventions of s.19 FSMA (the general prohibition against carrying on regulated activities without being authorised or exempt); s.21 FSMA (restrictions on financial promotions); and s.397 FSMA.” [77] These authorities demonstrate unequivocally the inclination of the English courts to construe the term “relevant requirement” in a broad and purposive manner, focusing on the substance rather than the form of the contravened provision. The fact that a provision does not utilise the word “requirement” and is couched in prohibitory language does not preclude it from being a “relevant requirement”, as long as it imposes a legal obligation or prohibition as part of the regulatory framework. Such an approach avoids overly technical distinctions and allows the regulator to take effective action against the mischief of market misconduct and abuse. Given the similarity of our statutory regimes, there is much to commend this pragmatic and purposive construction which I find highly persuasive. [78] Ultimately, the paramount consideration in interpreting the phrase “relevant requirement” in Section 360(13)(a)(i) CMSA must be the plain language of the provision and the statutory purpose undergirding it. Section 360(13)(a)(i) defines “relevant requirement” in broad terms to mean “a requirement which is imposed by or under this Act or any securities law”. Nowhere in this definition is there a prescription that the requirement must be one that is expressly stipulated or positively phrased. The focal point is whether the requirement is imposed under the CMSA or securities law, not the particular linguistic formulation adopted. [79] In this regard, it is salient to note that Section 179 CMSA, while not using the term “requirement”, is clearly a prohibition or legal obligation imposed by the CMSA against the use of manipulative and deceptive devices in connection with dealings in securities. It forms an integral part of the statutory framework to combat market misconduct which the SC is tasked to enforce in the interest of investors. Construing such a prohibition as falling outside the natural meaning of “a requirement imposed by or under the CMSA” would not only be unduly legalistic and restrictive, but also frustrate the legislative purpose of arming the SC with the necessary powers to fulfill its mandate. [80] Given the above analysis, a myopic fixation on the absence of the word “requirement” in Section 179 without regard to its substantive effect in imposing a legal obligation, thereby denuding the SC of its power to take prompt action against egregious conduct, would lead to consequences that are both absurd and repugnant to the purpose and object CMSA. Such an interpretation must be avoided in favour of one that is purposive and commercially sensible. [81] I am also mindful that the powers conferred on the SC under Section 360 are meant to be facilitative of its enforcement function and should therefore be construed generously. This is underscored by Section 360(14) CMSA which provides that: “(14) An application made pursuant to this Section by the Commission or any person referred to in subsection (7) shall not prejudice any other action that may be taken by the Commission or that person, as the case may be, under any securities laws or any other law or rules.” [82] It follows that the scope of “relevant requirement” under Section 360(13) must be interpreted sufficiently wide to enable the SC to discharge its statutory duties, and not be confined to only a narrow class of requirements that are couched in a particular fashion. To hold otherwise would be to ignore the raison d'etre of Section 360 and render it a toothless provision in respect of a substantial portion of the [83] In the circumstances, applying a purposive interpretation that coheres with the SC's statutory role as a regulator to protect investors and preserve market integrity, I am impelled to the conclusion that the definition of “relevant requirement” in Section 360(13)(a)(i) is sufficiently broad to encompass Section 179 notwithstanding its prohibitory language and the absence of the word “requirement”. The substance and effect of the provision in imposing a legal obligation that is integral to the regulatory scheme takes precedence over linguistic technicalities. While Section 179 is drafted as a prohibition, it is indubitably a requirement imposed by the CMSA that is binding on all persons dealing in securities. Non-compliance is a breach of a relevant requirement that attracts the sanctions under Section 360. To hold otherwise would be to undermine the efficacy CMSA and unduly curtail the SC's ability to take expeditious action to restrain a wide range of serious misconduct that the Act was designed to combat. [84] In the circumstances, I am satisfied that the SC has the necessary statutory power under Section 360 CMSA to apply for an injunction against the Defendants for the alleged breach of Section 179. The Defendants' application to set aside the ex parte injunction on this ground is therefore dismissed. Whether the common law requirements for a Mareva injunction are applicable to this application filed pursuant to Section 360(2) CMSA. [85] The SC's position is that the requirements under Order 29 Rule 1(2A) ROC (“ROC”) for ex parte relief and the common law requirements for a Mareva injunction do not apply to this application, which is filed pursuant to the express statutory provision of Section 360(2) CMSA. [86] The SC relies on the High Court decision in Securities Commission v Ishak Bin Ismail, where it was held that an application for a freezing injunction under Section 360(2) CMSA is distinct from a Mareva injunction. As such, the requirements under Order 29 Rule 1(2A) and the common law requirements for a Mareva injunction are not applicable. [87] In Securities Commission v Ishak Bin Ismail (HC), it was further held that to succeed in an application under Section 360(2), the SC need only show there has been a contravention of securities law and the Defendants have made unjustified gains from it. This is in contrast with a Mareva injunction, where the plaintiff must show a real risk of dissipation of assets. [88] The SC contends that it has complied with the requirements of Section 360(1)(D) CMSA by showing that Madam Teh is “reasonably likely to dispose of or otherwise deal with” her assets. [89] The SC argues that it has met the criteria for a Mareva injunction under common law, including demonstrating a good arguable case, a real risk of asset dissipation, a balance of convenience favoring the injunction, and no need for an undertaking as to damages, citing Section 360(5) of the CMSA and relevant case law regarding public authorities enforcing the law. [90] Therefore, the SC maintains that the requirements for ex parte relief under the ROC and for a Mareva injunction do not apply to this application under Section 360(2) CMSA. In any event, those requirements have been met. [91] The Defendants' position is that the requirements under Order 29 Rule 1(2A) ROC for ex parte relief, as well as the general requirements for a Mareva injunction under common law, remain applicable to the SC application filed pursuant to Section 360(2) CMSA. [92] They argue that while Section 360 CMSA empowers the court to grant certain orders, including freezing injunctions, it does not displace or modify the substantive legal principles governing when such orders should be granted. The Defendants contend that Section 360 is an enabling provision that confers locus standi on the SC to apply for such orders, but it does not create a separate, lower threshold for the court to actually grant the orders. [93] The Defendants rely on the Court of Appeal decision in Motor Sports International Ltd (Servants or Agents at Federal Territory of Labuan) & Ors v Delcont (M) Sdn Bhd [1996] 2 MLJ 605, which held that despite the statutory basis provided by Order 29 Rule 2A of the Rules of the High Court 1980, Mareva injunctions must still comply with the settled common law principles governing their grant. They submit that the cases cited by the SC do not stand for the proposition that Section 360 applications are exempt from these basic legal requirements. [94] Furthermore, the Defendants argue that even if Section 360 were to be interpreted as modifying the common law principles, it cannot be construed as abrogating the fundamental requirements for ex parte relief under Order 29 Rule 1(2A) ROC. This Rule, which mandates full and frank disclosure of material facts, is a core tenet of procedural fairness that cannot be simply disregarded, even in statutory applications. [95] The Defendants contend that accepting the SC's argument that it need not comply with Order 29 Rule 1(2A) ROC or establish a real risk of dissipation would effectively render the court's discretion nugatory and compel the grant of freezing injunctions merely because the SC appears to have a case under Section 360(1) CMSA. This, they submit, would be an untenable legal position. [96] In essence, the Defendants' stance is that while Section 360 provides a statutory gateway, the SC must still satisfy the substantive common law requirements and the ROC for the court to properly exercise its discretion in granting the extraordinary relief of a freezing injunction. [97] Having carefully considered the submissions of both parties and the authorities cited, I am persuaded that the SC's application under Section 360(2) CMSA is not subject to the requirements under Order 29 Rule 1(2A) ROC or the common law principles governing Mareva injunctions. [98] The decision of the High Court in Securities Commission v Ishak Bin Ismail [supra] is highly instructive and directly on point. In that case, Abdul Aziz J (as he then was) considered the very issue before me, namely whether an application for a freezing injunction filed by the SC pursuant to Section 360(2) CMSA is subject to the common law requirements for a Mareva injunction. After carefully analysing the statutory language and intent, His Lordship held unequivocally that such applications are distinct from Mareva injunctions and not beholden to the same onerous criteria. [99] His Lorsdship observed that in an application under Section 360(2) CMSA, the plaintiff “has no obligation to show evidence of a real risk of dissipation of assets”, which is one of the essential requirements that an applicant for a Mareva injunction must typically establish under common law. His Lordship reasoned: “In my view, the Plaintiff has no obligation to show evidence of a real risk of dissipation of assets in application under Section 360 The application is not for the purpose of preservation of the assets for personal benefit of the applicant, the Plaintiff. The application was for the preservation the assets that are allegedly obtained in contravention of the provisions of the securities laws and if necessary, for restitution to innocent party.” [100] The decision in Securities Commission v Ishak Bin Ismail makes it abundantly clear that Parliament, in enacting Section 360(2) CMSA, intended to unshackle the SC from the strictures of the common law on Mareva injunctions, so that it can move expeditiously to freeze assets reasonably believed to be proceeds of securities law violations, without having to first prove a real risk of dissipation. I am persuaded by the clear and cogent reasoning of Abdul Aziz J on this issue. Accordingly, I hold that the SC's present application under Section 360(2) is not subject to or defective for non-compliance with any of the ordinary Mareva injunction requirements developed under common law. [101] Furthermore, Section 360(14) CMSA which states that an application made under that Section shall not prevent the SC from taking any other action under securities laws or any other law or rules, expressly preserves the SC's right to take any other action under any other law or rules. [102] The term “law” is defined in Section 3 of the Interpretation Acts 1948 and 1967 as follows: ““Law” includes written law, the common law in so far as it is in operation in the Federation or any part thereof, and any custom or usage having the force of law in the Federation or any part thereof;” [103] This definition is read together with Article 160 of the Federal Constitution, which provides: “law” includes written law, the common law in so far as it is in operation in the Federation or any part thereof, and any custom or usage having the force of law in the Federation or any part thereof.” [104] The combined effect of these provisions is that the term “law” encompasses not just written law but also common law that is applicable in Malaysia. A Mareva injunction, being a creature of common law, would fall within the ambit of “any other law” referred to in Section 360(14) CMSA. [105] By expressly stating that an application under Section 360 “shall not prejudice any other action” that may be taken by the SC under “any other law”, Parliament has made clear its intention to preserve the SC's right to pursue common law remedies like Mareva injunctions alongside the statutory powers conferred by Section 360. The specific language used in Section 360(14) CMSA militates against any interpretation that Section 360 was meant to displace or abrogate the common law remedy of Mareva injunctions. [106] If Parliament had intended for Section 360 to be a comprehensive code that excludes the applicability of Mareva injunctions, it could have easily expressly provided for such an exclusion. The deliberate choice not to do so, and to instead include subsection (14), strongly supports the position that the SC's right to seek a common law Mareva injunction remains intact and is not abrogated by Section 360. [107] For common law to be abrogated, there must be specific terms in the written law that irrevocably alter the common law position. This general principle was upheld by the Federal Court in two recent cases, Chin Jhin Thien & Anor v Chin Huat Yean [2020] 4 MLJ 581 and Tony Pua Kiam Wee v Government of Malaysia [2019] 12 MLJ 1, where the applicability of common law was affirmed unless explicitly abrogated by statute. [108] In Chin Jhin Thien, the Federal Court held: “(1) By virtue of s 3(1) of the Civil Law Act 1956, the courts in Malaysia have applied the common law of England and the rules of equity as administered in England on 7 April 1956. It followed that the concept of secret trusts, which was part of the law of trusts and was governed by the rules of equity and the common law of England, applied in Malaysia unless there was an explicit abrogation, variation, restriction or modification of it by written law. The Malaysian Wills Act 1959 or other Acts of Parliament did not explicitly abrogate the application of secret trusts. In fact, its application was endorsed in the written law.

There was no cogent reason to abrogate secret trusts in Malaysia. The proviso to s 3(1)(a) of the Civil Law Act 1956 did not exclude the applicability of the law on trusts and secret trusts.” [109] Similarly, in Tony Pua Kiam Wee, the Federal Court stated at paragraphs 101-102: “[101] The general principle may be stated thus: a statute abrogates a common law principle where it expressly states an intention to abrogate that principle, or where it implicitly abrogates the principle by adopting a scheme that is wholly incompatible with the continued application of the common law principle. [102] When determining whether statute or written law has abrogated or modified common law, it is implicit that there must be a degree of specificity in abrogating the common law position. For example if the issue relates to the abrogation of a particular cause of action such as breach of promise of marriage in contract, then the question to be asked is which statute expressly or impliedly abrogates this particular cause of action. In other words the written law or statute should specifically encompass the common law position such that the common law cause of action is effectively replaced.” [110] The combined effect of these two Federal Court authorities is that common law principles and remedies continue to apply in Malaysia unless there are express or necessarily implied statutory provisions abrogating them. The abrogation must be specific - it is not enough for the statute to merely cover the same general area of law as the common law principle. Rather, the statutory language must clearly and unequivocally evince Parliament's intention to displace the particular common law rule or remedy in question. [111] In the absence of such clear and specific abrogating language, the common law position remains in force, even if the statute and common law cover the same broad legal domain. Any ambiguity or lack of clear words abrogating common law in the statute must be resolved in favor of preserving the applicability of common law. A court cannot presume that Parliament intended to alter common law unless that intention has been manifested expressly or by necessary implication through the language of the statute. [112] Applying these principles to the present case, for Section 360 CMSA to be interpreted as abrogating the common law Mareva injunction, it must contain specific language to that effect. It is not sufficient for Section 360 to merely cover the same general domain of asset freezing orders. There must be express words or necessarily implied terms in Section 360 that clearly evince Parliament's intention to extinguish the SC's right to apply for Mareva injunctions and replace it exclusively with the statutory regime. Absent such clear and unequivocal language, the correct interpretive approach is to recognise that Mareva injunctions remain available to the SC as a common law remedy notwithstanding the enactment of Section 360. [113] Crucially, Section 360 CMSA does not contain any wording to abrogate the application of common law. The 28 subsections of Section 360 do not feature any language expressing a clear intention to exclude the operation of common law principles and remedies. There is no provision in Section 360 equivalent or similar to Section 347(3) of the Companies Act 2016 in respect of derivative proceedings, which reads: “The right of any person to bring, intervene in, defend or discontinue any proceedings on behalf of a company at common law is abrogated.” [114] This provision demonstrates that when Parliament intends to extinguish common law rights and remedies and replace them with a purely statutory framework, it does so through the use of clear, direct, and unequivocal language. The lack of any such express abrogating language in Section 360 is a strong indication that Parliament did not intend to oust the application of common law principles in the context of the SC actions to freeze assets reasonably believed to be the proceeds of securities law violations. [115] Instead of having to prove the elements of a Mareva injunction, to succeed in an application under Section 360(2) CMSA, the Securities Commission need only establish two key elements, as succinctly stated by Abdul Aziz J in Securities Commission v Ishak Bin Ismail - “that there has been a contravention of the securities law and the person who contravened it ie the Defendant has made unjustified gains from it.” [116] The first element requires the SC to demonstrate a contravention of a specific securities law provision, such as the prohibited conduct under Section 179 CMSA. The second element of “unjustified gains” focuses on whether the defendant has improperly profited from said contravention, rather than the common law Mareva requirement of proving a real risk of dissipation of assets. [117] The decision in Securities Commission v Ishak Bin Ismail (HC) confirms that under Section 360(2) CMSA, once a breach of securities law and unjustified gains flowing from that breach are shown, an interim injunction should ordinarily be granted to preserve the status quo pending trial, without need for the SC to further prove a real risk of asset dissipation. This ensures that public interest is protected and potential proceeds of securities law violations are not put beyond reach before the conclusion of the court proceedings. [118] The Defendants' reliance on the Court of Appeal decision in Motor Sports International Ltd v Delcont [supra] to argue that Mareva injunctions under Section 360(2) of the CMSA must still comply with the settled common law principles governing their grant is misplaced for several reasons. [119] First, a close reading of the judgment in Motor Sports reveals that the Court of Appeal's observations about Mareva injunctions needing to comply with common law principles were made specifically in the context of applications for Mareva relief under the inherent jurisdiction of the court, and not under any statutory provision. At no point did the court examine or make any pronouncement on whether Parliament, through statute, can modify or exclude the application of common law Mareva principles in specific contexts. [120] The Motor Sports case concerned a dispute between defendant over the proceeds from motor truck shows organised by the plaintiff. An issue that arose was whether the ex parte Mareva injunction obtained by the plaintiff against Motor Sports complied with the requirements of Order 29 rule 2A of the Rules of the High Court 1980, and whether the injunction was too broad by not specifying a monetary limit on the frozen bank accounts. The court held that the affidavit supporting the ex parte application did not comply with Order 29 rule 2A, the injunction was oppressively broad by not specifying a monetary limit, and the condition imposed by the judge to deposit RM300,000 improperly gave the plaintiff priority over other creditors contrary to the purpose of a Mareva injunction. The court cited with approval the following passage from the High Court judgment in S & F International Ltd v Trans-Con Engineering Sdn Bhd [1985] 2 CLJ 228: “In PCW (Underwriting Agencies) Ltd. v Dixon & Anor. [1983] 2 All ER 158 which sets out the policy underlying the Mareva jurisdiction, it was held that the sole purpose of a Mareva injunction was to prevent a plaintiff being cheated out of the proceeds of an action, should he be successful, by a defendant transferring his assets abroad or dissipating his assets within the jurisdiction, and that the remedy was not intended to give a plaintiff priority over those assets, or to prevent a defendant from paying his debts as they fell due, or to punish him for his alleged misdeeds, or to enable a plaintiff to exert pressure on him to settle an action.” [121] Crucially, the PCW (Underwriting Agencies) case referred to above was also concerned with an application for a Mareva injunction pursuant to the court's inherent jurisdiction, and not under any statutory provision. Thus, the Court of Appeal's endorsement of the common law Mareva principles in Motor Sports must be understood in the specific context of the court's inherent jurisdiction. It does not, and indeed cannot, address the separate question of whether Parliament can modify or exclude those principles when conferring statutory freezing powers on a regulator like the SC in a specific legislative context. [122] Second, the facts and issues in Motor Sports are far removed from those arising under Section 360 of the CMSA. Motor Sports involved a dispute between private commercial parties and an application for a Mareva injunction pursuant to the inherent jurisdiction of the court. In contrast, the present case involves an application by a public regulator pursuant to a specific statutory provision for the purpose of enforcing securities laws and protecting the investing public. [123] The Court of Appeal in Motor Sports neither considered nor made any ruling on the scope and application of Section 360 of the To mechanistically transplant observations about common law Mareva principles from Motor Sports to this very different context would be to disregard the specificity of Section 360 and to gloss over Parliament's intention in enacting that provision. [124] Third and most fundamentally, the Court of Appeal in Motor Sports did not have the opportunity to consider whether Parliament can, through clear statutory language, modify or exclude the application of common law principles in particular contexts. As such, Motor Sports does not stand as authority for any general proposition that common law Mareva principles invariably apply even to statutory provisions that confer freezing powers on public regulators. [125] The question of whether Section 360 of the CMSA has modified or excluded common law Mareva principles can only be answered by carefully examining the language, scheme and purpose of that specific provision, as the High Court did in Securities Commission v Ishak Bin Ismail. It is not permissible to simply import observations about common law requirements from cases like Motor Sports which were decided in materially different factual and legal contexts. [126] In conclusion, the Motor Sports case, which involved an application for a Mareva injunction under the inherent jurisdiction of the court in a dispute between private parties, has no bearing on the proper interpretation of the SC's statutory powers under Section 360 of the CMSA. The Defendants' attempt to rely on Motor Sports to read common law fetters into Section 360 is misconceived and must be rejected. [127] In interpreting the language and requirements of Section 360 CMSA, I find it significant that Parliament has chosen to depart from the terminology typically associated with Mareva injunctions under common law. Specifically, Section 360(1)(D) uses the phrase “reasonably likely to dispose of or otherwise deal with” assets, which denotes a lower threshold than the “real risk of dissipation” that an applicant for a Mareva injunction must ordinarily prove. [128] This choice of language is a clear indication that Parliament did not intend for the SC to be saddled with the same onerous evidential burden in applications under Section

360

As long as the SC can show a reasonable likelihood of dissipation or other dealings with the assets in question, the court may grant an order restraining such dealings. There is no need for the SC to go a step further and establish a real risk of dissipation, which has been described in Mareva jurisprudence as a “solid danger” that a judgment would go unsatisfied. [129] Moreover, in a significant departure from ordinary Mareva applications, Section 360(5) CMSA expressly states: “Where an application for an order under subsection (1) is made by the Commission or any person duly authorised by the Commission or a stock exchange, a derivatives exchange or an approved clearing house, the court shall not, as a condition of the grant of the order, require any undertaking as to damages to be given by or on behalf of the Commission, stock exchange, derivatives exchange or an approved clearing house.” [130] This provision removes one of the usual safeguards in place for Mareva injunctions, which is the requirement for the applicant to provide an undertaking to pay damages in the event that the injunction was improperly granted and the defendant suffers loss as a result. The exemption of this requirement for applications by the SC reinforces the view that Parliament intended to unburden the regulator from the strictures of common law Mareva injunctions, so that swift action can be taken to prevent dissipation of assets in securities cases without the SC being hindered by the damages undertaking requirement. [131] While this court is minded to agree with the SC that the requirements under Order 29 Rule 1(2A) ROC for ex parte relief and the requirements for a Mareva injunction are not applicable to this application, I shall proceed to examine whether the SC has satisfied the requirements of the duty of full and frank disclosure, good arguable case, real risk of dissipation of assets and balance of convenience in favor of granting the injunction, lest I be found to have fallen into error in my determination on this issue. Whether there is a good arguable case against the Defendants as the SC has not pleaded that they had knowledge or intent to defraud. [132] The SC's position is that there is a good arguable case against the Defendants, Ricky Wong, Wong SK Holdings and Madam Teh, as the facts and evidence show their knowledge and intent to defraud in the scheme. The threshold for a good arguable case is one that is more than barely capable of serious argument but not necessarily having a better than 50% chance of success. [133] The SC contended that Ricky Wong had personal knowledge of the BPI Corporate Exercises prior to their implementation and was the mastermind of the devices, schemes and artifices to defraud BPI. Wong SK Holdings, controlled by Ricky Wong, acted as his alter ego. The facts show Ricky Wong's intention to defraud, as he caused proceeds to be paid out from BPI to nominee companies on fictitious invoices and then transferred to his own accounts. [134] In respect of Madam Teh, it was contended that she signed 71 cheques and payment vouchers for fictitious transactions totaling over RM56 million from BPI to nominee companies. She is a director, shareholder and bank signatory of Wong SK Holdings which received RM9.3 million in proceeds, and also of Asia Media, a nominee company that received and further channeled proceeds. She is a shareholder of Havana Bayview Sdn Bhd (“Havana Bayview”) which purchased a property with RM3.5 million of proceeds. [135] The SC argues that for all Defendants, knowledge and intent to defraud can be inferred from these primary facts showing their involvement. Further evidence of fraudulent intent can be elicited at trial. Additionally, it was submitted that Madam Teh's participation in approving the fictitious payments shows she dishonestly assisted the fraud. [136] Therefore, the SC submits it has properly pleaded facts establishing a good arguable case of knowledge and intent to defraud against each of the Defendants. [137] Ricky Wong and Wong SK Holdings submit that the SC has failed to establish a good arguable case of fraudulent conduct against them under Section 179(a) and (b) CMSA. They argue that the SC's pleadings do not contain the requisite particulars asserting that they had the knowledge or intent to defraud BPI through the alleged devices, schemes or acts related to the corporate exercises. [138] They contend that for an allegation of fraud or dishonesty under Section 179, the pleadings must go beyond facts consistent with innocence and specifically plead the primary facts demonstrating their dishonest state of mind and intention to defraud. Merely pleading that they were involved in or received proceeds from the corporate exercises is insufficient to make out a proper case of fraudulent conduct under Section 179. [139] Furthermore, Ricky Wong and Wong SK Holdings argue that while dishonesty can sometimes be inferred from circumstances, the SC must first properly plead the primary facts pointing towards their fraudulent intent, which it has failed to do. Without such foundational pleadings of dishonest knowledge or intent, the SC cannot rely on circumstantial evidence alone to establish a good arguable case at this interlocutory stage. [140] Madam Teh submits that the SC's pleadings disclose no good arguable case of fraudulent conduct against her under Section 179 CMSA, as they crucially lack any assertion or particulars that she had knowledge or intention to defraud BPI through her actions as a signatory. [141] She argues that Section 179(a) and (b) require an element of fraud or deceit, which in turn necessitates knowledge or intention on the part of the defendant. However, the SC's claim against Madam Teh is merely that she signed certain cheques and payment vouchers, without any pleading that she did so with fraudulent knowledge or intent to defraud BPI. [142] Madam Teh contends that for an allegation of fraudulent or dishonest conduct under Section 179, the pleadings must particularise her dishonest state of mind and intention to deceive, rather than pleading facts consistent with innocence. She argues the SC cannot point to circumstantial evidence to infer dishonesty, when it has not first properly pleaded the primary facts showing her alleged fraudulent intent. [143] In essence, the Defendants argue the SC has failed to establish a good arguable case against them under Section 179 by not pleading the critical element of their alleged fraudulent knowledge or intention, which is required for the court to grant an interlocutory freezing injunction. [144] Having carefully considered the submissions of both parties and the authorities cited, I find that the SC has established a good arguable case that the Defendants had knowledge of and intention to defraud BPI in the scheme relating to the corporate exercises. [145] The threshold for establishing a good arguable case at the interlocutory stage is not an overly burdensome one. As submitted by the SC and established by case law, the standard is that the case put forward must be more than barely capable of serious argument, but need not show a better than 50% chance of success at trial (Biasamas Sdn Bhd & Ors v Kan Yan Heng & Anor [1998] 4 MLJ 1 (CA); Bright Rims Manufacturing Sdn Bhd v Victor Taichung Machinery Works Co Ltd & Anor [2008] 4 MLJ 380 (CA)). [146] Contrary to the Defendants' contention that the SC failed to plead knowledge or intent to defraud, I note that in the SC's Statement of Claim (Enclosure 38), there are in fact multiple express mentions that the Defendants used devices, schemes or artifices “to defraud BPI” (see paragraphs 113, 157, 245, 252). This is reiterated in the SC's Amended Reply (Enclosure 303) which states that Madam Teh contravened Section 179 by using devices/schemes “to defraud BPI” (paragraph 4) and that she used the BPI corporate exercises and fictitious transactions as a “device, scheme or artifice to defraud” (paragraph 10(iii)(a)). These assertions suggest the SC did plead intent to defraud on the part of the Defendants. [147] In relation to Ricky Wong and Wong SK Holdings, I agree with the SC that the facts and evidence pleaded in the Statement of Claim are sufficient to make out a good arguable case that they had knowledge of and intent to defraud BPI through the devices, schemes and artifices employed in the Rights Issue, Private Placement and ESOS exercises. [148] Specifically, the SC has pleaded in paragraphs 85 and 86 of the Statement of Claim that Ricky Wong “had personal knowledge of the operations of the Rights Issue Exercise even prior to the implementation of the said exercise” as evidenced by email correspondences showing he was copied on key matters relating to the exercise. [149] The SC further pleads in paragraphs 54(i), 54(ii) and 108 of the Statement of Claim that Ricky Wong and Wong SK Holdings were the ultimate beneficiaries and recipients of RM35 million in proceeds siphoned from BPI through the Rights Issue on the basis of fictitious invoices by their nominee companies BTV Cinebus, Transnet and Matrix Angle. Similarly, in respect of the Private Placement and ESOS exercises, the SC pleads in paragraphs 119, 139 – 152, 163 and 220 – 245 that proceeds of RM7.791 million and RM13.018 million respectively were channeled from BPI to Ricky Wong's accounts through their nominee companies on the pretext of fictitious invoices. [150] These facts, evidencing Ricky Wong's personal knowledge, his key role as ultimate beneficiary, and the modus of using nominee companies and false invoices to siphon funds to his own accounts, provide a solid foundation to infer that Ricky Wong and his alter ego Wong SK Holdings had knowledge of and were the masterminds behind the fraudulent scheme perpetrated on BPI. [151] In this regard, I am guided by the principle enunciated by the House of Lords in Three Rivers District Council v Bank of England [2001] 2 All ER 513 that: “...since dishonesty is usually a matter of inference from primary facts, this involves knowing not only that he is alleged to have acted dishonestly, but also the primary facts which will be relied upon at trial to justify the inference.” [152] These primary facts pleaded by the SC, if proven at trial, are capable of establishing Ricky Wong's fraudulent intention. It is not fatal that the SC did not explicitly use the words “knowledge” or “intent to defraud” in respect of Ricky Wong and Wong SK Holdings. The pleadings disclose facts pointing towards their dishonest involvement which rise above mere facts consistent with innocence. [153] I therefore find that the SC has properly pleaded a good arguable case under Section 179(a) and (b) CMSA against Ricky Wong and Wong SK Holdings, by asserting primary facts which disclose their knowledge of and intention to carry out a fraudulent scheme against BPI. [154] In respect of Madam Teh, I am similarly satisfied that the SC has established a good arguable case that she had knowledge of and intention to defraud BPI through her involvement in authorising payments and her roles in the recipient entities. [155] The SC has specifically pleaded in at least 22 paragraphs of the Statement of Claim (paragraphs 17, 85, 86, 90, 91, 103, 104, 137, 140, 141, 144, 145, 148, 149, 184, 187, 191, 195, 223, 226, 230, 234) that Madam Teh signed a total of 71 cheques and payment vouchers to approve fictitious transactions from BPI to various nominee companies, amounting to RM56,074,500. [156] This is a significant number and quantum of fraudulent payments that Madam Teh is alleged to have personally authorised. The sheer volume and value of these fictitious disbursements provides a cogent basis to infer Madam Teh's knowledge that the payments were not genuine transactions, from which her intention to defraud can be inferred. [157] Furthermore, the Statement of Claim pleads Madam Teh's close nexus to several key nominee entities which received these fraudulent payments. Paragraph 19 avers that Madam Teh is a director, shareholder and bank signatory of Wong SK Holdings, which received RM9.3 million in siphoned proceeds. Paragraph 47(ii) pleads that Madam Teh was a director and bank signatory of Asia Media, and signed 23 cheques channeling RM9.035 million of BPI's ESOS proceeds to other nominee companies. Madam Teh is also pleaded to be a director of Transnet and shareholder of Havana Bayview, which collectively received millions in BPI funds. [158] Madam Teh's alleged control over bank accounts and directorships in multiple nominee companies which received and layered misappropriated BPI funds, when viewed together with her role in authorising numerous fictitious BPI payments to those entities, provides a strong prima facie case to infer her dishonest knowledge of and participation in the fraudulent scheme. [159] These primary facts pleaded rise well above assertions of mere innocent involvement, and are sufficient to constitute a good arguable case of Madam Teh's knowledge and fraudulent intent. As held by the Privy Council in Barlow Clowes International Ltd v Eurotrust International Ltd [2005] UKPC 37: “...a person who participated in a transaction 'contrary to normally acceptable standards of honest conduct' would be deemed to have dishonestly assisted the fraudulent transaction. It did not require that he should have had reflections about what those normally acceptable standards were.” [160] Here, the facts pleaded regarding Madam Teh's acts of approving tens of millions in fictitious payments to companies she had interests and roles in are sufficient, if established, to amount to conduct contrary to normally acceptable standards of honesty, from which knowledge and dishonest intent can be inferred. [161] I accept the SC's submission that these primary facts pleaded regarding Madam Teh's roles and involvement are sufficient at this stage to infer dishonest knowledge and intention, rising above mere facts consistent with innocence and showing her participation in the fraudulent scheme. The SC also rightly contends, relying on Pet Eastern (M) Sdn Bhd v Tay Young Huat & Ors [1999] 5 MLJ 558 (HC), that further evidence of Madam Teh's fraudulent intention and state of mind can be elicited at trial through viva voce evidence. The present assessment is only of whether a good arguable case is disclosed. [162] Therefore, in respect of all three Defendants, I am satisfied that the SC has properly pleaded primary facts which constitute a good arguable case that the Defendants had knowledge of and intention to perpetrate the fraudulent scheme against BPI under Section 179(a) and (b) CMSA. The express mentions of intent to defraud in the Statement of Claim and Amended Reply, together with the primary facts pleaded about the Defendants' culpable involvement, provide a clear basis to infer dishonest knowledge and intent at this interlocutory stage, even if dishonest state of mind is not explicitly averred in the pleadings. [163] On this issue I find that a good arguable case of fraudulent knowledge and intent has been established. Whether the common law test for a freezing injunction is not met because there is no evidence the Defendants received any pecuniary gain from the alleged wrongdoings. [164] Regarding Ricky Wong and Wong SK Holdings, the SC submits that the facts and evidence clearly show they obtained pecuniary gain from the alleged fraudulent scheme. The money trail demonstrates that proceeds from the BPI Corporate Exercises were siphoned through nominee companies and eventually paid into the bank accounts of Ricky Wong and Wong SK Holdings. [165] The SC contends that at the injunction stage, it need only establish a good arguable case that the Defendants obtained a pecuniary gain, with the full extent to be proven at trial. The threshold for a good arguable case is one that is more than barely capable of serious argument but not necessarily having a better than 50% chance of success. [166] In respect of Madam Teh, the SC argues there is a good arguable case that she received pecuniary gain as well. The facts show Madam Teh is the only other shareholder of Wong SK Holdings apart from Ricky Wong. Wong SK Holdings received RM9.3 million of proceeds from the nominee companies in the first round of ESOS. Madam Teh is also the only other shareholder of Havana Bayview, which owns the the immovable property at Four Seasons Place (“Four Seasons Property”) that was partially purchased with over RM3.5 million of proceeds from the schemes. [167] The SC submits that Madam Teh's argument that the lifting of seizure orders under AMLATFPUAA means there was no pecuniary gain is misconceived. The lifting of orders was at the discretion of the Public Prosecutor and merely indicates Madam Teh was not charged with a criminal offence under AMLATFPUAA at that point. The elements of an AMLATFPUAA offence are different from Section 179 CMSA and cannot be equated. [168] Therefore, the SC contends that based on the facts presented, it has established a good arguable case that all the Defendants received pecuniary gain from the alleged wrongdoing, meeting the common law test for a freezing injunction if it applies. The precise quantum is to be determined at the full trial. [169] Ricky Wong and Wong SK Holdings submit that the common law test for granting a freezing injunction against them is not satisfied because the SC has failed to provide any evidence that they received pecuniary gains from the alleged wrongdoings related to BPI's corporate exercises. [170] They argue that while the SC's case is that certain proceeds from the corporate exercises were received into Ricky Wong's accounts and Wong SK Holdings' account, this alone does not establish an unlawful pecuniary gain requiring a freezing injunction. They contend that the SC must demonstrate a clear tracing and nexus between those funds and the alleged fraudulent conduct under Section 179 [171] Ricky Wong and Wong SK Holdings further submit that for the SC to obtain final relief under Section 200(2)(a) CMSA in the form of recovering up to three times the pecuniary gain, it is incumbent on the SC to first establish the existence of such unlawful gain linked to the alleged Section 179 breaches. Without this critical evidence of illicit pecuniary gains, a key requirement for granting an interlocutory freezing injunction is fundamentally lacking. [172] Madam Teh argues that the freezing injunction must be discharged against her due to a complete absence of evidence that she personally received any pecuniary gains from the alleged fraudulent schemes related to BPI's corporate exercises. [173] She contends that the SC's own pleaded case demonstrates that the alleged unlawful gains of around RM56 million flowed into the accounts of her son Ricky Wong and Wong SK Holdings, but there are no allegations or evidence whatsoever that even a single cent ended up with her. [174] Madam Teh highlights that initially her accounts were frozen by the SC under the AMLATFPUAA, but subsequently the Public Prosecutor unconditionally released those accounts, signifying no proceeds of unlawful activities were found in her accounts. [175] She submits that without pleading and establishing that she personally derived any pecuniary benefit from the alleged wrongdoings, the SC cannot meet the standard for obtaining an interlocutory freezing injunction against her assets, as it would be obvious that final relief recovering illicit gains would be refused against her. [176] In essence, the Defendants argue the freezing injunctions must be discharged against them as the SC has failed to provide evidence of them receiving any unlawful pecuniary gains from the alleged breaches, which is a core requirement under common law principles for granting such relief. [177] Having carefully considered the submissions of both parties and the authorities cited, I find that the SC has satisfied the common law test for a freezing injunction, if it applies, by establishing a good arguable case that the Defendants received pecuniary gain from the alleged wrongdoings under Section 179 CMSA. [178] In respect of Ricky Wong and Wong SK Holdings, the evidence adduced by the SC, particularly the money trail, shows that proceeds from BPI's Corporate Exercises were transferred through nominee companies and eventually paid into bank accounts belonging to Ricky Wong and Wong SK Holdings. Specifically, the SC has pleaded in paragraph 3 of the Statement of Claim that Ricky Wong and/or Madam Teh made a pecuniary gain of RM46,774,500, while Madam Teh and/or Wong SK Holdings made a pecuniary gain of RM9,300,000. [179] In paragraph 54(iii) of the Statement of Claim it is pleaded: “A portion of the proceeds received by Ricky Wong was used as part payment for the purchase of Immovable Properties. Refer to Section G below;” [180] In paragraph 119 it is pleaded: “The SC's investigation showed that the proceeds raised by BPI from the Private Placement Exercise were paid to three nominee companies, Sierra Broadway, Warisan Serantau and Ikhtiar Syahdu, before eventually being transferred to Ricky Wong. A portion of the proceeds received by Ricky Wong was used as part payment for the purchase of Immovable Properties.” [181] The SC's pleadings and evidence establish a detailed money trail tracing how funds raised by BPI through the Rights Issue, Private Placement and ESOS exercises were siphoned out of BPI to Ricky Wong and Wong SK Holdings via multiple layers of nominee companies controlled by the Defendants. The SC pleaded in the Statement of Claim that a total of RM46,774,500 was transferred to Ricky Wong's personal accounts while RM9,300,000 was transferred to Wong SK Holdings. This illicit transfer of BPI's funds to Ricky Wong and Wong SK Holdings provides compelling evidence of them deriving substantial pecuniary gains from their alleged fraudulent scheme in breach of section 179 of the CMSA. [182] Section 179(a) of the CMSA makes it unlawful for any person to “use any device, scheme or artifice to defraud” while section 179(b) prohibits engaging in “any act, practice or course of business which operates or would operate as a fraud or deceit upon any person”, in connection with dealing in securities. The elaborate money trail evidencing the flow of funds from BPI through the Defendants' nominee companies and into Ricky Wong and Wong SK Holdings’ accounts fits squarely within the type of fraudulent conduct caught by section 179. [183] At this interlocutory stage, the SC does not need to conclusively prove the illegality of the gains, but must show at least a good arguable case. The detailed pleadings specifying the amount of RM46.7 million to Ricky Wong and RM9.3 million to Wong SK Holdings, supported by the money trail evidence, is more than sufficient to constitute a good arguable case that Ricky Wong and Wong SK Holdings derived pecuniary benefits from the alleged breaches of section 179 CMSA. This satisfies a key requirement for granting a freezing injunction. [184] The legal threshold for a good arguable case was correctly stated by the SC, relying on S&F International Ltd v Trans-Con Engineering Sdn Bhd [supra], as being one that is more than barely capable of serious argument but not necessarily having a better than 50% chance of success. The SC argues that at this stage, it need only establish a good arguable case of pecuniary gain, with the precise quantum to be proven at trial. I am satisfied the facts presented by the SC meet this standard in relation to Ricky Wong and Wong SK Holdings. [185] I do not accept Ricky Wong and Wong SK Holdings’ contention that the SC must conclusively establish the existence and precise quantum of unlawful pecuniary gains at this interlocutory stage in order to obtain a freezing injunction. The authorities are clear that the applicant need only show a good arguable case, with the merits to be determined at the full trial. The SC's pleaded case and the evidence of funds flowing into Ricky Wong and Wong SK Holdings’ accounts are sufficient to raise a serious question to be tried regarding receipt of illicit gains. [186] As for Madam Teh, while the evidence of direct receipts is less obvious, the SC has nonetheless shown a good arguable case that she obtained a pecuniary benefit as well. The SC highlighted that Madam Teh is the only other shareholder of Wong SK Holdings apart from her son Ricky Wong, and Wong SK Holdings received RM9.3 million from the nominee companies in the 1st Round of ESOS. [187] Further, Madam Teh is the only other shareholder of Havana Bayview, which owns the Four Seasons Property that was partially purchased with over RM3.5 million of allegedly illicit proceeds. Although not directly received by Madam Teh, these facts are sufficient to establish an arguable case that she benefited as a shareholder and part owner of the property. [188] I agree with the SC that the lifting of seizure orders against Madam Teh under the AMLATFPUAA does not negate an arguable case of receiving pecuniary benefits under Section 179 CMSA. The cessation of seizure orders under section 52A of the AMLATFPUAA is entirely distinct and separate from a civil action by the SC under the CMSA. [189] Under section 52A of the AMLATFPUAA, a seizure order will expire within 12 months if the person is not charged with an offence under that Act. The Public Prosecutor's decision not to charge Madam Teh and the subsequent expiry of the seizure order was made in the context of potential criminal proceedings under AMLATFPUAA. It does not amount to a finding that Madam Teh did not receive any pecuniary gains, especially in the context of a civil action under the [190] The legal elements that the SC must establish in a civil claim under section 200 read with section 179 of the CMSA are substantially different from the criminal elements under AMLATFPUAA. While a prosecution under AMLATFPUAA would require proof beyond reasonable doubt of money laundering offences, a civil claim under CMSA requires only proof on a balance of probabilities that the defendant contravened section 179 and received a pecuniary gain. Further, section 200(1) of the CMSA makes clear that such civil proceedings can be commenced “whether or not that person has been charged with an offence in respect of the contravention, or whether or not a contravention has been proved in a prosecution.” [191] Therefore, the decision not to prosecute Madam Teh under AMLATFPUAA does not preclude a finding of liability in a civil action under CMSA based on different elements and a lower standard of proof. The SC has adduced evidence showing a good arguable case that Madam Teh received pecuniary benefits as a shareholder of companies that received funds originating from BPI. The release of the seizure order does not detract from this. [192] In Lei Lin Thai v Public Prosecutor [2016] 9 MLJ 631 (HC), Nordin Hassan J (as he then was) held that since a prosecution under AMLATFPUAA is exercisable by the public prosecutor whereas a civil action under CMSA is exercisable by the SC, there can be no issue of discrimination or double jeopardy as these are different parties exercising distinct powers under separate statutes. Similarly here, the expiry of seizure orders under one statute does not affect the SC's right to seek civil remedies under the other. [193] In conclusion, based on the evidence presented, I find that the SC has met its burden of establishing a good arguable case that each of the Defendants received pecuniary gains from the alleged wrongdoings, thereby fulfilling this particular common law requirement for granting a freezing injunction, if it applies. The precise amount and nexus of such gains is a matter to be determined at the full trial. The Defendants' submissions to the contrary are rejected. Whether there is risk of dissipation of assets by the Defendants to satisfy the common law requirement for a freezing injunction. [194] Regarding Ricky Wong, the SC submits that his conduct in causing the sudden change in beneficial ownership of Spade Assets Limited (“Spade Assets”) after having knowledge of the Ex Parte Injunction Order obtained by the SC on 8.5.2020 and served on 11.5.2020 is clear evidence of a real risk of dissipation of assets. This attempt to put assets beyond the reach of the injunction had already occurred. [195] The SC further argues that for all Defendants, an inference of risk of dissipation can be drawn from the elaborate and dishonest nature of the alleged fraud itself to siphon RM56 million from BPI. With such large sums at stake, there is a real likelihood the Defendants would try to put assets out of reach to preserve their own interests. [196] In respect of Madam Teh specifically, the SC contends her conduct demonstrates a lack of probity and honesty, and prima facie dishonesty, which case law has established is sufficient to infer a real risk of dissipation. This includes her involvement in signing 71 cheques and payment vouchers totaling over RM56 million for fictitious transactions in her capacity as an authorised signatory of BPI. Furthermore, she holds positions as a director, shareholder, and signatory of Wong SK Holdings and Asia Media, entities that received proceeds from the fraudulent activities. Additionally, Madam Teh is a shareholder of Havana Bayview, which utilised RM3.5 million in proceeds to acquire a property. [197] The SC submits that a real risk of dissipation can be legitimately inferred from such dishonesty if it has a material bearing on the risk. The nature of the fraud and Madam Teh's involvement in the scheme meets this threshold. [198] Therefore, the SC argues that the Defendants' conduct in the alleged fraud is sufficient to establish a real risk of dissipation of assets, satisfying the common law requirement for a freezing injunction against each of them. [199] Ricky Wong and Wong SK Holdings submit that the SC has failed to provide any cogent evidence demonstrating a real risk of them dissipating or improperly dealing with their assets. [200] They argue that mere allegations of dishonest conduct alone cannot establish a risk of dissipation, without specifically connecting that dishonest conduct to a risk that their own assets will be dissipated to frustrate any final judgment. [201] They contend that the SC's pleadings do not disclose any factual basis to infer a risk of dissipation by them. The pleadings merely allege their involvement in receiving proceeds from BPI's corporate exercises, without any assertion that they intended to fraudulently divert or dissipate those funds for their own benefit. [202] Furthermore, Ricky Wong and Wong SK Holdings submit that the SC cannot simply rely on the purported risk of dissipation by Ricky Wong as a basis to also freeze the separate assets of Wong SK Holdings, which is a distinct legal entity. [203] Madam Teh argues that the SC has completely failed to demonstrate any real risk of her dissipating or improperly dealing with her assets. [204] She highlights that after the AMLATFPUAA freezing orders over her accounts were lifted on 1.4.2020, her accounts remained unfrozen for over a month until the ex parte injunction on 8.5.2020. However, during this intervening period when she could freely access and transfer her funds, Madam Teh did not make any attempts to dissipate or dispose of her assets. [205] Madam Teh contends that this conduct clearly negates any suggestion of a risk of dissipation on her part. She submits that if she truly intended to dissipate assets, she would have done so during the period her accounts were temporarily unfrozen rather than leaving the funds untouched. [206] She also argues that the SC's pleaded case itself does not allege any facts from which to infer a risk of dissipation specifically by her. The allegations pertain only to her acting as a signatory for BPI, without any assertion that she did so with fraudulent intent to facilitate dissipation for her own benefit. [207] Additionally, Madam Teh submits that she cannot be held responsible for any purported risk of dissipation by her adult son, Ricky Wong. As a separate individual, she argues freezing her assets cannot be justified by the alleged risk posed by another defendant's actions. [208] In essence, the Defendants contend there is an absence of evidence demonstrating a real risk of them dissipating assets, which is a core requirement for granting a freezing injunction under common law principles. [209] Having carefully considered the submissions of both parties and the authorities cited on the issue of whether there is a real risk of dissipation of assets by the Defendants to justify granting a freezing injunction, I find that the SC has established a real risk of dissipation by Ricky Wong, Wong SK Holdings and Madam Teh on a balance of probabilities. [210] In respect of Ricky Wong, I accept the SC's submission that his conduct in causing a change in the beneficial ownership of Spade Assets shortly after being served the Ex Parte Injunction Order on 11.5.2020 is clear evidence of an attempt to put assets beyond the reach of the injunction. [211] The SC has adduced evidence that Spade Assets is a company incorporated in the British Virgin Islands (BVI) of which Ricky Wong was the sole beneficial owner from the date of incorporation on 12.10.2015 until 16.3.2020. Spade Assets holds a bank account in Luxembourg with a balance of approximately EUR4.8 million as of 18.5.2020. While the Register of Members shows Ricky Wong's sole share in Spade Assets was transferred to his brother David Wong on

16.3.2020, making David Wong the sole shareholder on paper, there are reasons to believe this change in beneficial ownership may have been backdated. [212] Crucially, Spade Assets' BVI registered agent was only made aware of and instructed to change the beneficial ownership to David Wong in June 2020, after the Ex Parte Injunction Order was served on Ricky Wong on 11.5.2020. By letter dated 17.7.2020, the BVI Financial Services Commission confirmed to the SC that the instruction on 15.6.2020 to change the principal contact of Spade Assets to David Wong constituted a request to change the beneficial owner to David Wong. This attempt to put the EUR4.8 million beyond the reach of the injunction, which on the evidence occurred after Ricky Wong had notice of the order, shows a clear willingness on his part to take steps to dissipate his assets and frustrate the SC's recovery efforts. [213] In my view, real risk of dissipation can be established by a defendant taking action after he has become aware of a claim against him to put assets out of reach of execution. Here, the timing of the change in Spade Assets' beneficial ownership immediately after service of the Ex Parte Injunction Order is highly suggestive of an attempt by Ricky Wong to put assets out of the SC's reach once he became aware of the SC's claim. [214] This single fact alone is sufficient to establish a real risk of dissipation of assets by Ricky Wong, as it demonstrates that given the opportunity, he is likely to take active steps to dissipate his assets and stymie enforcement of any judgment the SC may obtain against him. Where, as here, there is evidence of an actual attempt at dissipation upon notice of a claim, the court will readily infer a real risk of further dissipation and grant a freezing injunction to preserve assets. No further evidence of risk is required. [215] Therefore, based on Ricky Wong's conduct in relation to Spade Assets, I find there is a clear real risk of dissipation of assets by him to justify a freezing injunction in the SC's favor over his assets. [216] I also agree with the SC that an inference of risk of dissipation can be drawn against all the Defendants from the elaborate and dishonest nature of the alleged fraud itself to siphon RM56 million from BPI. [217] The fraudulent scheme pleaded by the SC involves the Defendants orchestrating three corporate exercises by BPI - a rights issue, a private placement, and two rounds of the ESOS - to raise a total of RM68.6 million. However, instead of the proceeds being utilised for their stated purposes, RM56 million was diverted through sham transactions to nominee companies controlled by the Defendants before being paid into the Defendants' personal bank accounts. The SC alleges the Defendants used fictitious invoices, purportedly issued by suppliers for goods sold to BPI, to lend a veneer of legitimacy to the sham payments. However, the named suppliers have denied any such transactions with BPI or the nominee companies. [218] If these allegations are proven at trial, the fraud perpetrated on BPI would be exceedingly elaborate, spanning three separate corporate exercises over two years and involving multiple layers of entities to disguise the misappropriation of a substantial sum exceeding RM56 million. Such a complex and sophisticated scheme to defraud BPI and its investors of this magnitude is indubitably dishonest conduct that lacks any probity. The Court of Appeal in Ang Chee Huat v Engelbach Thomas Joseph [1995] 2 MLJ 83 held that conduct “lacking in probity and honesty” can justify a finding of risk of dissipation. In this case, the respondent, a foreigner residing in the US, alleged that the appellant induced him to give RM500,000 by falsely representing it was required by the Malaysian Industrial Development Authority to obtain pioneer status for a company they intended to incorporate jointly, and that the appellant claimed to have used the money as part payment to purchase a piece of land to be jointly owned, but the land was actually registered in the name of a company where the appellant was a shareholder and director. The Court of Appeal dismissed the appeal against a Mareva injunction granted against the appellant, finding that there was a real risk of the appellant dissipating his assets given his conduct "lacking in probity and honesty". Zakaria Yatim JCA (as he then was) held: “Having considered the evidence, I am of the view that the conduct of the appellant in this matter is lacking in probity and honesty. In the circumstances, I conclude that there is a real risk that the assets of the appellant will dissipate should the respondent succeed at the trial.” [219] The alleged BPI fraud would fall squarely within the type of conduct described by the Court of Appeal as “lacking in probity and honesty” from which a risk of dissipation can be inferred. The complexity and scale of the fraud, involving numerous related parties and fabricated documents, is highly suggestive of “underhand” conduct by the Defendants to “secrete” BPI's assets for their own benefit. [220] Given the substantial sum of RM56 million at stake which the Defendants are alleged to have misappropriated, I accept it is reasonable to infer the Defendants would be inclined to further dissipate those assets to preserve their illegitimate gains against the SC's recovery action. The elaborate lengths the Defendants appear to have gone to perpetrate the fraud and conceal their involvement evince an intention to put those funds beyond reach. [221] Hence, I find that the dishonest and highly complex nature of the alleged fraud itself, as pleaded by the SC, supports an inference that the Defendants pose a real risk of dissipating the misappropriated assets, justifying a freezing injunction over those sums. Madam Teh's conduct as pleaded further supports an inference of risk of dissipation on her part individually. [222] The SC has adduced evidence showing Madam Teh's integral involvement in the fraudulent scheme in her capacity as an authorised signatory of BPI. She is alleged to have personally signed 71 BPI cheques and payment vouchers totaling over RM56 million that were paid out to the Defendants' nominee companies based on fictitious transactions. The sheer number and value of these fraudulent payments which Madam Teh approved highlights her central role in siphoning funds out of BPI. [223] In addition, Madam Teh held positions in several of the nominee companies that received the misappropriated funds. She was a director, shareholder and bank signatory of both Wong SK Holdings and Asia Media. The SC has specifically pleaded that Wong SK Holdings received RM9.3 million from the first round of the ESOS, while Asia Media received RM9.035 million. In Asia Media's case, Madam Teh allegedly signed a further 23 cheques that were used to layer RM9.035 million of the ESOS proceeds to other nominee companies. Madam Teh is also said to be a shareholder of Havana Bayview, which used RM3.5 million of the misappropriated monies to purchase a property. [224] Viewed collectively, these acts by Madam Teh in approving numerous fraudulent payments and holding key positions in multiple nominee companies that received and dealt with the proceeds display prima facie dishonest conduct and a glaring lack of probity on her part. Case law has recognised that such dishonest conduct by a defendant raises an inference of real risk of dissipation. [225] In Amixco Asia Pte Ltd v Bank Negara Indonesia 1946 [1991] 2 SLR(R) 713 a dispute arose over the delivery of plywood goods to an Egyptian buyer, where the defendant and a freight forwarder were alleged to have conspired to convert the goods. The Singapore Court of Appeal found there was “overwhelming objective evidence of prima facie dishonest conduct” by the Defendants, such as detaining the plaintiff's equipment without consent and failing to pay over progress payments, which indicated “the probity of the defendant could not be relied on” and “the risk of dissipation was not just a mere possibility, but almost a certainty”. [226] Similarly, in Petowa Jaya Sdn Bhd v Binaan Nasional Sdn Bhd [1988] 2 MLJ 261, a case involving a Mareva injunction sought by the plaintiff, a sub-contractor for certain roadworks, against the defendant main contractor who had terminated their contract and failed to pay the plaintiff its share of progress payments, the High Court held the defendant's undisputed detention of the plaintiff's equipment without consent and 98% of progress payments owed to the plaintiff demonstrated “there was solid evidence that the probity of the defendant could not be relied on”, and hence “the defendant would, far more probably than not, dissipate the agreed retention sum in question without paying it to the plaintiff”. [227] The case of Zarina bt Sharil & Anor v Chiong Chuan Hwa & Ors [2008] MLJU 608 was about the plaintiffs' claim for the return of monies they had invested with the 1st defendant on behalf of numerous persons in a scheme known as a "hedge fund" through a company registered in the Cayman Islands. The High Court found a real danger of dissipation based on “overwhelming objective evidence of prima facie dishonest conduct” by the Defendants, including the illegal nature of their investment scheme flouting the Banking and Financial Institutions Act 1989, as well as their failure to pay dividends and guaranteed principal sums to the plaintiffs under the investment agreements. [228] By parity of reasoning, the prima facie evidence of Madam Teh's pervasive role in the dishonest scheme, through signing 71 fraudulent BPI cheques and payment vouchers for over RM56 million as well as holding positions in multiple nominee companies that received and dealt with RM21.835 million of the misappropriated funds, gives rise to a real inference that she cannot be trusted to preserve her assets to meet any potential judgment against her. Her unprincipled conduct suggests an unscrupulous character who would not hesitate to dissipate her assets to avoid satisfying a judgment debt. [229] Here, the fraudulent BPI payments authorised by Madam Teh and her controlling positions in various nominee companies that dealt with the proceeds constitute strong prima facie evidence of fraud that casts serious doubt on her probity. There is solid evidence that Madam Teh's integrity could not be relied on, as she appears to have been an integral facilitator of the elaborate fraud on BPI. Her role in layering the misappropriated funds through multiple entities also suggests an intention to conceal the true nature of the scheme. [230] In the circumstances, Madam Teh's dishonest conduct and lack of probity in relation to the alleged fraud is sufficient to ground a real inference that she poses a risk of dissipating her assets to avoid liability. As the authorities above establish, evidence of such fraudulent and dishonest dealings by a defendant will generally raise an inference of risk of dissipation. No further proof of Madam Teh's actual intent to dissipate is required. [231] Therefore, based on Madam Teh's prima facie dishonest conduct as pleaded, I find there is a clear basis to infer a real risk of dissipation of assets on her part to justify a freezing injunction against her. [232] The Singapore Court of Appeal's decision in Bouvier, Yves Charles Edgar and another v Accent Delight International Ltd and another and another appeal [2015] 5 SLR 558 provides a helpful framework for analysing when allegations of dishonesty can justify inferring a real risk of dissipation. The court explained that while mere allegations of dishonesty alone are insufficient, a real risk of dissipation can be legitimately inferred if the nature of the alleged dishonesty has a material bearing on that risk. [233] Specifically, the Court of Appeal cited the English High Court decisions in Madoff Securities International Ltd v Stephen Ernest John Raven [2011] EWHC 3102 and Jarvis Field Press Ltd v Chelton [2003] EWHC 2674, although these were distinguished and not followed. Madoff Securities involved a massive Ponzi scheme perpetrated by Bernard Madoff over many years, where he defrauded investors of billions of dollars through his investment advisory business. The English High Court found that the Defendants' alleged conduct of issuing sham invoices to disguise payments over many years “demonstrates in itself a serious risk of dissipation”, as it showed “deliberate wrongdoing” and suggested a propensity to conceal assets. [234] Similarly, in Jarvis Field Press which involved allegations that a director of the claimant company, made numerous unauthorised and unlawful payments totaling over £800,000 from the company's assets between 1999 and 2001, the court granted a freezing order against her assets up to £1.5 million due to the risk of dissipation arising from her alleged dishonest conduct and the impending misfeasance proceedings against her for around £14 million. The English High Court held there was a real risk of dissipation where the defendant had allegedly engaged in a “consistent and determined fraud” by extracting significant sums from the plaintiff company “in a devious and secret way, utilising in effect a secret account, with a total absence of disclosure”. The court found that a defendant guilty of “dishonesty in financial dealings in relation to the use or misuse of assets” presented an appreciable risk of taking steps to put assets out of reach. [235] Applying this reasoning to the facts here, I find that the nature of Madam Teh's alleged dishonesty, as pleaded by the SC, bears a clear and material nexus to the risk of dissipation. The SC's case is that Madam Teh was an integral facilitator of an elaborate scheme to defraud BPI of over RM56 million. She allegedly personally signed 71 BPI cheques and payment vouchers for fraudulent transactions to siphon funds to the Defendants. She then allegedly layered over RM21 million of the misappropriated proceeds through nominee companies in which she held controlling positions as director, shareholder and signatory. [236] This is closely analogous to the facts in Madoff Securities and Jarvis Field Press. As in those cases, Madam Teh's alleged role in authorising numerous fraudulent transfers and funneling proceeds through multiple vehicles evinces a high degree of financial sophistication and a concerted effort to disguise the movement of funds. Her conduct in the alleged fraud itself suggests a propensity to conceal assets and engage in complex machinations to put monies beyond reach. Following the reasoning endorsed by the Court of Appeal in Bouvier, these allegations of dishonest dealings, if true, have a direct and material bearing on the risk that Madam Teh lacks probity and cannot be trusted to preserve her assets to meet any judgment. [237] I do not accept Madam Teh's argument that her failure to dissipate assets during the one month period her accounts were unfrozen from 1.4.2020 to 8.5.2020 negates any risk of dissipation on her part. [238] Madam Teh's accounts were previously frozen by the SC pursuant to an order obtained under the AMLATFPUAA. This order was then revoked by the Public Prosecutor on 1.4.2020, lifting the freeze over the accounts. Madam Teh contends that her failure to transfer funds out of those accounts from then until 8.5.2020, when the SC obtained the present ex parte injunction, shows she had no intention to dissipate her assets and therefore poses no real risk of doing so. [239] However, the mere fact that Madam Teh did not visibly dissipate assets during this brief one month interregnum period cannot displace the clear inference of a real risk of dissipation that arises from the nature and extent of her involvement in the overall fraudulent scheme, as pleaded by the SC. A holistic assessment of Madam Teh's conduct in relation to the misappropriation of BPI funds raises a clear inference of a real likelihood that she would deal with her assets improperly to defeat the SC's claim, notwithstanding what she may or may not have done in that one specific month. [240] Here, Madam Teh's role in authorising over RM56 million in sham payments out of BPI to nominee companies controlled by her and the other Defendants establishes a “reasonable chance” and “real risk” that she would take similar steps to put her own assets beyond the SC's reach, even if she refrained from doing so in the immediate aftermath of the first freezing order being lifted. The elaborate nature of the fraud itself suggests long-term planning to conceal the Defendants' unlawful gains, which would not be consistent with Madam Teh immediately dissipating funds during the narrow window when the SC would be most likely to scrutinise her accounts. [241] There is also nothing to suggest that Madam Teh was aware during the period of 1.4.2020 to 8.5.2020 that the SC intended to seek a further injunction against her under the CMSA. Based on the timing, it is entirely plausible that Madam Teh, knowing the SC was already investigating her for money laundering, would refrain from any overtly suspicious transactions during that brief time to avoid drawing further regulatory attention. She had no way of knowing then that the SC would re-freeze her accounts so quickly after. [242] As such, I find that Madam Teh's lack of apparent dissipation in the one month after the first freezing order was lifted has minimal bearing on the overall assessment of the real risk of dissipation she poses. It does not detract from the broader inference of risk that arises from the extent of her involvement in the scheme to defraud BPI. To hold otherwise would be to place undue weight on her conduct in that narrow timeframe without properly considering the totality of the circumstances. The court is entitled to assess the risk of dissipation holistically, which in this case supports the grant of a freezing injunction over Madam Teh's assets notwithstanding the lack of visible dissipation during that one month period. [243] I also reject the contention by Ricky Wong and Wong SK Holdings that the SC's pleadings fail to establish a risk of dissipation by them. The facts pleaded by the SC clearly particularise how they received and dealt with the proceeds of the fraudulent transactions. In Wong SK Holdings' case, it is specifically pleaded to have received RM9.3 million of the misappropriated BPI funds. These facts support an inference that they intended to divert the funds for their own benefit, which in turn gives rise to a real risk of dissipation. It is not necessary for the SC to plead some further specific assertion of an intent to dissipate. Such an intent can be inferred from the dishonest nature of their dealings with the proceeds. [244] Similarly, there is no merit to Madam Teh's argument that the SC's case fails to plead any facts suggesting a risk of dissipation by her specifically. The facts particularised above regarding her role in authorising fictitious payments as a signatory of BPI, and her positions in the nominee companies that received the proceeds, are sufficient to ground an inference of risk of dissipation on her part. It does not matter that the pleadings do not allege that Madam Teh facilitated the transactions with the specific intention of dissipating the proceeds for her own benefit. The dishonest nature of the transactions she authorised is sufficient to give rise to the necessary inference of risk. [245] Finally, I accept the SC's submission that it is entitled to rely on the risk of dissipation by each defendant individually to support a group-wide freezing injunction against all of them. [246] Ricky Wong, Wong SK Holdings and Madam Teh have argued that the court cannot grant a blanket freezing injunction over the assets of all three defendants based on a purported risk of dissipation by only one or some of them. They contend that as separate legal personalities, the risk posed by each defendant must be assessed individually, and that an injunction can only be granted against those defendants who are specifically shown to present a real risk of dissipation on the available evidence. [247] However, I agree with the SC that the court is not precluded from granting a group-wide injunction over all the Defendants' assets if the circumstances warrant it, notwithstanding their separate legal personalities. Where, as in the present case, the Defendants are alleged to have been knowing participants in a common fraudulent scheme, the court is entitled to assess the risk of dissipation holistically across all of them. [248] Here, the fraud perpetrated on BPI is alleged to have been carried out by the Defendants acting in concert, with each of them playing a crucial role in the overall scheme. Ricky Wong orchestrated the BPI corporate exercises to get the funds paid out to the nominee companies, Wong SK Holdings and other such nominees received those funds, and Madam Teh approved the fraudulent transfers in her capacity as a BPI signatory. If proven, this would mean the Defendants had all the knowledge of the fraud and participated in it as a group. [249] In those circumstances, I accept the SC's argument that the high degree of co-ordination and knowledge sharing between the Defendants supports an inference that the real risk of dissipation posed by any one of them would realistically extend to the rest of the group as well. Given their alleged close co-operation and presumed knowledge of each other's actions, there is a sufficient basis to infer that Ricky Wong, Wong SK Holdings or Madam Teh would leverage their collective resources to dissipate assets and stymie enforcement regardless of which one of them directly undertakes the dissipation. They each have a common interest in preserving the misappropriated BPI funds. [250] As such, the court is fully entitled, and indeed ought to consider the risk of dissipation in respect of the Defendants holistically in determining whether a group-wide injunction is warranted. To hold otherwise and require the risk to be assessed strictly by reference to each defendant as a separate legal person would undermine the court's ability to grant effective relief in cases involving group participation in fraudulent schemes. [251] In the present case, the nature and extent of the three Defendants' alleged knowing involvement in the BPI fraud is sufficient to warrant assessing the risk of dissipation in respect of them as a whole. I therefore find that the real risk of dissipation established in respect of each defendant individually can properly be relied on to support a group-wide injunction over all their assets. [252] For all the above reasons, I am satisfied the SC has established a real risk of dissipation of assets by the Defendants, both collectively and individually, sufficient to warrant the grant of a freezing injunction against each of them under the common law principles governing such orders. Whether the upper limit of RM169 million set for the freezing injunction is excessive and oppressive. [253] Regarding Madam Teh, the SC submits that the upper limit of RM169 million for the freezing injunction against her is neither excessive nor oppressive. The SC argues that its claim against Madam Teh is on a joint and several basis along with the other Defendants. Under the principle of joint and several liability, the SC contends it has the right to pursue the full claimed sum against any one or all of the liable Defendants. Therefore, the quantum of the injunction against Madam Teh should not be measured against her specific shareholding in Wong SK Holdings, but rather the entirety of the SC's claim. [254] The SC further submits that it is entitled to a freezing injunction for the total claimed sum upon satisfying the relevant requirements, notwithstanding Madam Teh's shareholding. This is to avoid the risk of any judgment not being satisfied due to a reduction in the injunction sum. [255] In respect of Ricky Wong and Wong SK Holdings, the SC notes their argument that the injunction against them is oppressive as the sum claimed against them individually is less than RM169 million. However, the SC points out that the court has the discretion to vary or reduce the quantum of the injunction at the inter partes stage if it is persuaded that the sum is excessive. [256] Ricky Wong and Wong SK Holdings submit that the freezing sum of RM169 million against them is oppressive and disproportionate to the SC's own pleaded case. [257] They argue that this sum exceeds the total alleged unlawful gains of around RM56 million that the SC claims flowed into Ricky Wong's accounts and Wong SK Holdings' account from BPI's corporate exercises. [258] They contend that the RM169 million figure appears to include not just the alleged gains, but also a multiplier of three times that amount as well as potential RM1 million civil penalties under Section 200(2) CMSA. However, Ricky Wong and Wong SK Holdings submit that the imposition of such multipliers and penalties is discretionary and lies within the court's purview at the final stage. They argue the SC cannot pre-emptively multiply the alleged gains and claim a freezing order for the inflated sum before the court exercises its discretion on penalties. [259] Furthermore, they contend that freezing injunctions are aimed at preventing dissipation to frustrate a final judgment sum, not securing payment of discretionary penalties imposed separately by the court. [260] As such, they argue the freezing sum against them should be limited to the alleged unlawful gains of RM56 million pending final determination, rather than extending to the discretionary punitive elements. [261] Madam Teh submits that the RM169 million freezing sum against her assets is staggeringly excessive, oppressive and disproportionate. [262] She highlights that based on the SC's own case, the alleged unlawful gains of RM56 million flowed into her son Ricky Wong's accounts and Wong SK Holdings, with no allegation or evidence that even a single sen reached her personally. [263] Madam Teh further points out that her interest in Wong SK Holdings is merely holding 1 share out of 100,000 shares, which she holds on Ricky's behalf. Therefore, her maximum potential unlawful gain based on that 0.001% shareholding would only amount to around RM543. [264] She argues that setting a freezing sum of RM169 million against her, which includes punitive multipliers and discretionary penalties, is blatantly oppressive and cannot be justified when the SC's own case demonstrates her alleged gain is a tiny fraction of that amount. [265] Madam Teh contends that maintaining such a grossly disproportionate freezing sum against her would be an injudicious exercise of the court's discretion. [266] In essence, the Defendants submit that the RM169 million freezing limit is oppressive as it significantly exceeds the alleged unlawful gains based on the SC's pleaded case, and extends improperly to discretionary punitive elements which have no certainty at this interlocutory stage. [267] Having carefully considered the submissions of both parties and the authorities cited, I find that the upper limit of RM169 million set for the freezing injunction against all the Defendants is neither excessive nor oppressive in the circumstances of this case. [268] Paragraph 7 of the Statement of Claim states that the SC is claiming, among other things, payment of three times the gross pecuniary gains received by the Defendants as a result of violating Sections 179(a) and/or 179(b) CMSA, as well as civil penalties, pursuant to Sections 200(2)(a) and 200(2)(b) of the same Act. The SC's claim against the Defendants for this is on a joint and several basis, as clearly pleaded in paragraphs 262(ii) the Statement of Claim. [269] The well-established principle of joint and several liability has been recently affirmed by the Federal Court in Lembaga Kumpulan Wang Simpanan Pekerja v Edwin Cassian a/l Nagappan @ Marie [2021] 5 MLJ 253, where Nallini Pathmanathan FCJ elucidated: “Joint and several liability gives rise to one joint obligation and to as many several obligations as there are joint and several promisors ...the promisor who has discharged the liability may then seek a proportionate share from each of the other debtors. The creditor however is at liberty to go against any one or all of the debtors.” [270] The effect of joint and several liability was further explained by the High Court in Herukh Thakurdas Jethwani & Anor v Bank Simpanan Nasional [2021] 8 MLJ 407, where Ong Chee Kwan JC (as he then was) held: “As a joint obligation, all the obligors are obligated to perform the entirety of the obligation when called upon by the creditor... it will be clear that the Court of Appeal was not setting down general principle that a judgment creditor can only enforce as against each of the joint judgment debtors no more than his or her respective aliquot share of the judgment sum.” [271] Flowing from these authorities, the SC is entitled, upon obtaining judgment, to pursue and enforce the entire judgment sum against any one or more of the jointly and severally liable Defendants, regardless of their individual shareholdings, interests or specific receipt of funds from the impugned transactions. The Defendants' respective portions of liability inter se does not affect or limit the SC's right of recovery against each of them for the whole sum. [272] Therefore, I am in full agreement with the SC's submission that the upper limit of the freezing injunction against each Defendant individually should be referenced to the totality of the SC's claim, and not apportioned based on their specific interests or alleged gains. Support for this approach can be found in the High Court case of Jasa Keramat Sdn Bhd v Monatech (M) Sdn Bhd [1999] 4 MLJ 217, where Jeffrey Tan J held: “The objective of a Mareva injunction is to remove that risk and danger, and that objective would not be achieved if the judgment or award in favour of a plaintiff with a Mareva injunction would yet remain unsatisfied, because of the reduction of the Mareva sum.” [273] Adopting the rationale in Jasa Keramat, fragmenting or reducing the injunction sum against each Defendant based on their specific shareholding or receipt of monies would undermine the very purpose and efficacy of the freezing injunction to preserve assets to meet any eventual judgment for the entire sum. The quantum must therefore be pegged to the totality of the SC's claim on a joint and several basis, to achieve its intended objective and avoid the risk of any part of the judgment remaining unsatisfied due to diminution of the injunction sum. [274] The SC has provided persuasive case law from Singapore, the US and Australia to demonstrate that in determining the quantum of civil penalties, courts in these jurisdictions consider factors such as the severity of the violation, culpability of the Defendants, remorse shown, efforts to repay misappropriated funds, and whether the conduct involved dishonesty. [275] In the Singapore High Court case of Monetary Authority of Singapore v Wang Boon Heng and another [2017] SGHC 268, the court held that in assessing a civil penalty under section 232 of the Securities and Futures Act (Cap 289, 2006 Rev Ed), which allows for a penalty of up to 3 times the amount of the profit gained or loss avoided, the following factors should be considered: “[60] ...The first broad category of factors encompasses those that relate to the severity of the violation in question. The following non-exhaustive factors can be taken into account:

the mechanics and degree of sophistication of the defendant's conduct;

the actual or potential impact of the defendant's conduct on the market; ...

the scale, frequency and duration of the violations;” [61] Next, the court should consider factors relating to the culpability of the defendant. Culpability is the measure of “the degree of relative blameworthiness disclosed by an offender's actions”...These factors are in my view offence-specific and may include:

whether the defendant's conduct is a deliberate or flagrant disregard for the law (as opposed to mere carelessness);

whether there is evidence of dishonesty on the part of the defendant, such as the deliberate concealment of his conduct aimed at avoiding detection, or the destruction of incriminating evidence; [62] ...the court should consider other general aggravating and mitigating factors which are not offence-specific, including, but not limited to, the following:

whether the defendant showed remorse or contrition, evidenced for example by a voluntary admission of wrongdoing, a sincere apology, not contesting proceedings on liability leading to savings of time or cost, or voluntary restitution of losses caused to third parties;” [276] Similarly, in the US, courts have considered factors like the egregiousness and repeated nature of the violations, efforts at concealment, and the defendant's culpability in determining the quantum of civil penalties under the Securities Exchange Act 1934. For example, in SEC v Michael Sargent 329 F 3d 34 (1st Cir, 2003), the court stated: “[14] ...In evaluating whether or not to assess civil penalties, a court may take seven factors into account, such as:

the egregiousness of the violations;

the isolated or repeated nature of the violations;...

whether the defendant concealed his trading...” [277] The Australian courts have also considered similar factors like the nature and extent of the contravention, the circumstances in which it took place, loss or damage suffered, and whether the conduct involved dishonesty, in determining pecuniary penalties under section 1317G of the Corporations Act 2001. This can be seen in the case of ASIC v Adler [2002] NSWSC 483 where the court summarised the relevant principles as follows: “(i) The pecuniary penalty has a punitive character, but it is principally a personal and general deterrent...

(ix) Factors leading to the order of a penalty...included: — Defendant was aware of impropriety of actions ... — Cases classed as being serious misconduct” [278] Applying the factors set out in these foreign authorities to the present case, I am of the view that the severity and complexity of the Defendants' misconduct warrants the imposition of the maximum 3 times multiplier under section 200(2)(a) of the CMSA, which provides: “(2) If the court finds that a person has contravened a relevant requirement, the court may, without limiting any other penalty that may be imposed, make an order requiring the person to pay a civil penalty to the Commission, of an amount not exceeding—

in the case of a corporation, three million ringgit; or

in the case of a person other than a corporation, one million ringgit.” [279] Applying these factors to the instant case, I am satisfied that imposing the maximum 3 times multiplier is justified. The severity of the violations is evident from the elaborate scheme allegedly perpetrated by the Defendants, involving the siphoning of over RM56 million through multiple corporate exercises, nominee companies and suppliers. The high degree of culpability of the Defendants can be inferred from the active steps taken to defraud BPI. [280] The SC has adduced cogent evidence of the convoluted money trail in respect of the four impugned transactions by the Defendants, involving the siphoning of over RM56 million from BPI through 13 nominee companies and 7 purported suppliers, and the approval of 71 fictitious payments by Madam Teh. This clearly demonstrates the severity, scale and sophistication of the fraud perpetrated by the Defendants. [281] The dishonest nature of the Defendants' conduct, as opposed to mere negligence or carelessness, is apparent from their systematic misuse of BPI's funds through an intricate web of entities. Far from showing any previous good character, Ricky Wong is a fugitive from justice which is a seriously aggravating factor. [282] Crucially, the SC has highlighted that no remorse or contrition has been shown by the Defendants. On the contrary, Ricky Wong has refused to cooperate with the SC's investigations and remains at large, demonstrating a lack of regard for the authority of the regulator. No efforts have been made to repay the misappropriated funds. [283] Given the egregious nature of the alleged misconduct and the unrepentant stance of the Defendants, I concur with the SC that imposing the maximum multiplier of 3 times the pecuniary gain is necessary and appropriate at this stage to send a strong deterrent message to preserve the integrity of the capital markets and punish wrongdoing of this magnitude. The quantum of the freezing injunction, which is pegged to this statutorily prescribed penalty, is therefore not excessive but proportionate to the Defendants' misconduct. The Defendants' conduct, if proven at trial, strikes at the very heart of public confidence in the proper regulation of the capital markets. This injunction sum is necessary to secure any eventual judgment in the public interest of preventing dissipation of ill-gotten gains. [284] I note Ricky Wong and Wong SK Holdings' argument that the RM169 million sum exceeds the alleged unlawful gains of around RM56 million and includes a multiplier of three times that amount as well as potential RM1 million civil penalties under Section 200(2) CMSA. However, Section 200(2) CMSA expressly empowers the court to order a payment of three times the amount of pecuniary gain as well as a civil penalty of up to RM1 million. The freezing injunction sought is to secure the totality of the SC's claim under this provision. [285] While the imposition of such multipliers and penalties is indeed discretionary, this does not preclude the SC from seeking a freezing order for the full potential sum claimable under the statute at the interlocutory stage, to preserve assets pending the final determination. As held in Larut Consolidated Bhd & Anor v Khoo Ee Bee & Ors [1997] 5 MLJ 77 (HC), the court retains the discretion to vary or reduce the quantum of the injunction at the inter partes stage if persuaded that the sum is excessive. In that case the court reduced the quantum of the injunction at the inter partes stage from the original RM54m to just US$5m, after finding the original sum to be excessively overstated. Therefore, setting the limit at RM169 million at this stage is not oppressive, as there is recourse for the Defendants to seek a variation if justified. [286] The authorities establish that a Mareva injunction will not be considered oppressive or excessive as long as it adheres to certain parameters. Firstly, the injunction must specify a fixed upper limit on the amount that can be frozen. This is to prevent the injunction from operating in an unlimited and overreaching manner. As held by the Court of Appeal in Motor Sports International Ltd (Servants or agents at Federal Territory of Labuan) & Ors v Delcont (M) Sdn Bhd [supra]: “In our judgment, where a plaintiff claims an exact sum, a Mareva injunction that restrains the defendant from dissipating his assets must specify an upper limit: if it does not, then the order is liable to be condemned as being too wide and therefore oppressive.” [287] Secondly, the injunction should make reasonable provision for the defendant's living and legal expenses. Failure to do so would be oppressive to the defendant. This principle was affirmed by the High Court in Larut Consolidated Bhd & Anor v Khoo Ee Bee & Ors: “I accept the fourth defendant's submission that the Mareva injunction as granted is oppressive. I find that the said order failed to make provision for the fourth defendant's living expenses and legal costs and that it also overstated the maximum monetary limit of the injunction's intended coverage. …. It cannot but be sound law that a failure to provide for living expenses and the payment of ordinary debts as they become due, in an order for a Mareva injunction, ought to be valid grounds to discharge that order. … The soundness of a provision for the defendant to employ funds in relation to his legal costs in defending the suit has also been acknowledged in Derby v Weldon (Nos 3 & 4) where Lord Donaldson MR said at p 76: ‘... it is not its [a Mareva injunction's] purpose ... to impede him in any way in defending himself against the claim.’” [1997] 5 MLJ 77 at 100D ...the failure of the order to provide for the defendant's living and other expenses as well as his costs for legal advice and representation would result in real oppression and injustice to the defendant.” [288] Finally, the upper limit specified in the injunction must not be overstated or exceed the reasonable amount required to satisfy any eventual judgment. An injunction that freezes far more than the potential judgment sum would be disproportionate and oppressive. As stated in Larut Consolidated Bhd: “It is my judgment that a fortiori, where a maximum limit is provided for, that maximum limit must as far as possible be accurately stated and in any event certainly not overstated.” [289] Applying these principles to the present case, I find that the Mareva injunction granted against the Defendants is not oppressive. The injunction order clearly specifies a maximum upper limit of RM169 million that can be restrained. There is no open-ended or unlimited freezing of assets. [290] Furthermore, in determining whether this upper limit is overstated, the relevant benchmark is the amount claimed by the SC in this action and not the total value of assets owned by the Defendants. Based on the available evidence of the funds traced to the Defendants, the SC has a good arguable case to claim the full RM169 million as the 3 times multiplier of the Defendants' alleged pecuniary gain. [291] The SC's evidence shows that a total of RM56 million was siphoned out of BPI and channeled to the Defendants through the four impugned transactions. RM35 million of the Rights Issue proceeds, RM7.7 million of the Private Placement proceeds, and RM13.2 million of the ESOS proceeds, were transferred to Ricky Wong's personal bank accounts or the accounts of companies controlled by him and Madam Teh. Applying a 3 times multiple on this RM56 million pecuniary gain by Ricky Wong and Madam Teh as statutorily provided for under section 200(2)(a) of the CMSA, the amount claimed would be RM168 million, which is very close to the RM169 million limit specified in the injunction order. [292] In comparison, the total value of Ricky Wong and Wong SK Holdings’ disclosed assets is only around RM50 million, which is far below the RM140 million and RM28 million sums claimed against them respectively. Therefore, there is no basis to conclude that the upper limit is overstated or that the injunction is restraining far more assets than necessary to satisfy an eventual judgment. The injunction sum is in fact modest and proportionate when assessed against the potential judgment that may be entered against the Defendants. [293] Finally, the terms of the injunction order do provide reasonable carve-outs for the Defendants' living and legal expenses. Paragraph (11) states: "This Order does not prohibit the Defendants from spending RM10,000.00 a month each towards their ordinarily living expenses and a reasonable sum on legal advice and representation." [294] This ensures that the injunction does not operate oppressively to deprive the Defendants of funds for basic necessities and a proper defence. [295] For these reasons, I am satisfied that the present Mareva injunction is not oppressive but in fact reasonable and proportionate in light of the large sums misappropriated by the Defendants and their substantial potential liability in this action. The upper limit is rationally connected to the amount claimed based on the statutory formula and the injunction makes adequate provision for the Defendants' legitimate expenses. There is therefore no reason to set aside or vary the injunction sum at this stage. [296] Madam Teh contends that the upper limit of RM169 million for the freezing injunction is excessive and oppressive against her because she only holds a miniscule shareholding of 1 out of 100,000 shares in Wong SK Holdings, which received RM9.3 million from the proceeds of the impugned transactions. She argues that based on this 0.001% shareholding, her maximum potential unlawful gain would only amount to around RM543. [297] However, this argument fails to appreciate the nature and effect of the SC's claim being on a joint and several basis against all the Defendants. As explained in the preceding analysis, under joint and several liability, the SC is entitled to pursue the entirety of the judgment sum from any one Defendant, irrespective of their individual portion of the liability or gains. Madam Teh's specific shareholding in Wong SK Holdings does not limit or apportion the sum that the SC can claim or enforce against her. The quantum of the freezing injunction must therefore be premised on the totality of the SC's claim, and not fragmented based on Madam Teh's individual interest. [298] Madam Teh further highlights that the SC has not alleged or proven that any part of the RM56 million unlawful gain was received by her personally. Be that as it may, this does not detract from the joint and several basis of the claim and liability. The receipt of funds by co-conspirators, nominee companies or related entities does not absolve Madam Teh from the potential liability to account for the entire judgment sum, by virtue of the joint and several nature of the claim. [299] Moreover, at this interlocutory stage, the SC is only required to establish a good arguable case, which is a relatively low threshold. The SC does not have to conclusively prove the actual receipt of funds by Madam Teh at this juncture. The voluminous evidence exhibited by the SC showing Madam Teh's involvement in the alleged scheme and fraudulent transactions is sufficient to establish a good arguable case. In particular, the SC has shown that Madam Teh signed off on 71 cheques and payment vouchers enabling the siphoning of RM56 million worth of funds from BPI to various nominee companies. She was also a director and shareholder in several key entities that received these funds, including Wong SK Holdings and Asia Media. [300] While her exact knowledge and receipt of the funds is a matter for determination at the trial of this suit, the evidence of Madam Teh's involvement at this stage is sufficient to justify the grant of the freezing injunction for the entire sum claimed on a joint and several basis. The argument that there is no evidence of funds being traced directly to her does not preclude the injunction, as long as a good arguable case is shown. The degree of Madam Teh's involvement and personal receipt of funds will be assessed at the trial based on the full evidence adduced, and does not affect the SC's entitlement to seek an interlocutory freezing injunction for the entire judgment sum that may be enforced against her as a jointly and severally liable defendant. [301] In conclusion, I am satisfied that based on the nature of the SC's claim under Section 200 CMSA and the joint and several liability of the Defendants, the additional evidence of the severity and complexity of the fraud adduced, the factors that justify imposition of the maximum 3x multiplier, and the principles governing when a Mareva injunction is considered oppressive, the upper limit of RM169 million for the freezing injunction is justified and proportionate to preserve assets pending the final determination of the matter. If at the inter partes stage it is shown that the sum is excessive in light of new evidence, the Defendants have recourse to seek a variation of the quantum. However, at this stage, I find no reason to conclude that the sum is oppressive or disproportionate to the SC's statutorily founded claim. The injunction is therefore allowed with the upper limit of RM169 million maintained. Issues specific to Enclosures 39 and 46 (Setting Aside Applications) Whether the SC failed to make full and frank disclosure by not informing the court that prior seizure orders over Madam Teh’s accounts had been lifted before obtaining the ex parte freezing order. [302] The SC contends that there has been no failure to make full and frank disclosure to the court in obtaining the ex parte injunction. [303] The SC submits that it had expressly disclosed the lifting of the seizure orders against Madam Teh on 1.4.2020 in both its affidavit in support and written submissions for the ex parte Injunction Application. The SC further points out that it had also exhibited the Revocation Orders in its affidavit. [304] The SC argues that the material non-disclosure threshold, which looks at whether the undisclosed facts were so severe that the injunction would not have been granted with full disclosure, has not been met. It contends that the release of Madam Teh's accounts does not obviate the risk of dissipation nor the need for an injunction. [305] Moreover, the SC submits that, the duty of full and frank disclosure is no longer relevant at the inter partes stage. The pragmatic approach is to consider the merits of continuing the injunction based on all the evidence now disclosed by both parties. [306] In conclusion, the SC maintains that it made proper disclosure of the release of Madam Teh's accounts prior to obtaining the ex parte injunction, and in any event this issue is no longer material at the inter partes stage in light of the evidence of risk of dissipation. [307] Madam Teh submits that the SC failed to make honest, full and frank disclosure of all relevant material facts to the court during the ex parte hearing on 8.5.2020 to obtain the freezing injunction. [308] She contends that the SC did not disclose the critical fact that the earlier freezing and seizure orders obtained by the SC over her accounts under the AMLATFPUAA had already been lifted and revoked by the Public Prosecutor on 1.4.2020. [309] Madam Teh argues that instead, for the ex parte hearing, the SC inaccurately stated that the seizure orders were due to lapse on 9.5.2020. She submits that the SC further reinforced this inaccurate statement during the oral hearing. [310] She contends that this non-disclosure of the revocation of seizure orders over a month earlier was a material fact that misled the court into granting the ex parte injunction under a mistaken sense of urgency. [311] Madam Teh submits that had this fact been properly disclosed, it would have demonstrated that she had over a month where her accounts were unfrozen, yet she did not make any attempts to dissipate or transfer out her assets during that period. [312] She argues that the SC's failure to disclose this critical fact deprived the court of a significant factor negating any risk of dissipation on her part, which is a key requirement for granting freezing injunctions. [313] Madam Teh contends that the SC, as a public authority, is held to higher standards of candor and its material non-disclosure amounts to a violation of its duty to make full and frank disclosure during ex parte proceedings. [314] In essence, Madam Teh submits that the freezing injunction against her should be set aside due to the SC's non-disclosure of the revocation of seizure orders over her accounts, which misled the court and tainted the entire ex parte proceedings. [315] Having carefully considered the submissions of both parties and the authorities cited, I find that the SC has made full and frank disclosure of all material facts in obtaining the ex parte freezing injunction against Madam Teh on 8.5.2020. [316] The key issue raised by Madam Teh is that the SC had failed to disclose the critical fact that the earlier freezing and seizure orders obtained by the SC over her accounts under the AMLATFPUAA had already been lifted and revoked by the Public Prosecutor on 1.4.2020, more than a month before the ex parte hearing. She contends that this non-disclosure misled the court into granting the ex parte injunction under a mistaken sense of urgency and deprived the court of considering a significant factor negating the risk of dissipation on her part. [317] However, the evidence shows that contrary to Madam Teh's assertion, the SC had in fact expressly disclosed the revocation of the AMLATFPUAA seizure orders in multiple documents, namely: a) Enclosure 18 - the SC's Affidavit in Support of the ex parte Injunction Application affirmed on 12.5.2020 at paragraph 274; b) Enclosure 15 - the SC's Written Submissions dated 8.5.2020 for the ex parte Injunction Application at paragraph 133; and c) Enclosure 24 - the actual Revocation Order dated 1.4.2020 which was exhibited as Exhibit SAB-39, in Enclosure 24 pages 1960 to 1966. [318] However, the evidence shows that contrary to Madam Teh's assertion, the SC had in fact expressly disclosed the revocation of the AMLATFPUAA seizure orders in both its affidavit in support and written submissions for the ex parte application. The relevant paragraphs in both documents clearly state: “Pursuant to a Revocation Order issued by the Public Prosecutor dated 1.4.2020, the thirty-nine

personal bank accounts belonging to Madam Teh which comprised of the total sum of RM41,978,643.81 were released” [319] Furthermore, the SC had exhibited the Revocation Orders themselves in its affidavit. This belies Madam Teh's contention that the SC had misled the court by stating the seizure orders were only due to lapse on 9.5.2020. A plain reading of the excerpts above unequivocally shows that the SC informed the court that the seizure orders had in fact already been revoked and Madam Teh's accounts released as of 1.4.2020. [320] As such, I am satisfied that the SC had made proper and full disclosure of this fact to the court during the ex parte hearing. There was no suppression or misleading of the court as alleged by Madam Teh. The court was not deprived of the opportunity to consider the implications of Madam Teh's accounts being unfrozen for over a month prior to the Injunction Application. [321] I am guided by the Court of Appeal decision in Damayanti

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Kantilal Doshi & Anor v Jigarlal Kantilal Doshi [2004] 1 MLJ The case concerned a dispute among family members who were beneficiaries of an estate, regarding the release of funds held by a third party. An issue that arose was the alleged material non-disclosure by the appellants of earlier court orders when applying for the ex parte injunction, which the learned judicial commissioner found to be in breach of Order 29 rule 1(2)(B) of the Rules of the High Court 1980. The court held that material non-disclosure at the ex parte stage should not be taken to such an extent that the justice of granting interim relief at the inter partes stage is overlooked. The Court of Appeal was of the view that the paramount consideration at an inter partes injunction hearing is “whether the justice of the case requires the granting of the interim injunction on the facts presented”. The court stated: “On the issue of material non-disclosure of the earlier orders we are inclined to agree with the contention of learned counsel for the appellants that the paramount consideration is whether the justice of the case requires the granting of the interim injunction on the facts presented in an inter parte hearing despite the making of an ex parte order earlier on.” [322] Applying this test, the issue of non-disclosure by SC, even if made out, is no longer material at this inter partes stage. The court is not constrained to set aside the injunction on this ground alone. What is crucial is to examine the merits and justice of continuing the injunction based on all the evidence now disclosed by both parties. [323] This accords with the pragmatic approach advocated by the High Court in Salcon Engineering Sdn Bhd v PRM Energy Systems (M) Sdn Bhd [1993] 3 MLJ 64. The case concerned an application by the plaintiff for a Mareva injunction against the defendant to prevent dissipation of assets. An issue that arose was whether the plaintiff was guilty of non-disclosure of material facts when applying for the injunction ex parte. The court held that the question of non-disclosure is not relevant at the inter partes hearing and court stated: “The practicality of the Bennett and Broadbent approach is that the court will not, at the inter partes hearing, be encumbered with a forensic study on the question of disclosure. In some cases, such as the present, this is an onerous task involving detailed study of voluminous documents. At the end of this exercise, much time is wasted. I prefer to approach the inter partes hearing on a more pragmatic level by considering the merits of continuing the injunction on the material disclosed by both parties.” [324] Here, even assuming there was non-disclosure by SC in not highlighting more explicitly the release of the AMLATFPUAA seizure orders, I am not convinced that this was so severe that the injunction would not have been granted if there had been full disclosure. The legal threshold in Damayanti is whether the non-disclosure was of such gravity that the court would have rejected the injunction outright if the facts had been fully disclosed. [325] In this case, the lifting of the AMLATFPUAA seizure orders, while a relevant consideration, does not in itself negate the risk of dissipation nor automatically disentitle SC from obtaining a separate freezing injunction under the CMSA. This is because the legal requirements and purpose of asset freezing under the two regimes are separate and distinct. The release of Madam Teh's accounts by the Public Prosecutor under the AMLATFPUAA criminal regime due to insufficient grounds to prosecute a money laundering offence cannot be equated to mean there is no risk of dissipation for the purposes of a civil action by SC under the CMSA for fraudulent securities offences. The court would still have to assess the risk of dissipation based on the strength of SC's case and the evidence of the fraudulent scheme perpetrated by Madam Teh. [326] In this regard, I accept that the compelling evidence adduced by SC of Madam Teh's integral involvement in the elaborate fraud on the company and its investors through the siphoning of funds would justify the grant of the injunction, even if the release of the AMLATFPUAA orders had been explicitly mentioned. The justice of the case requires the injunction to be maintained to preserve the assets pending trial of the CMSA civil action, notwithstanding the Public Prosecutor's decision not to pursue criminal charges under AMLATFPUAA. The Defendants should not be allowed to benefit from or dissipate the proceeds of their fraudulent scheme in the meantime. As such, the non-disclosure does not meet the high threshold in Damayanti to warrant the injunction being set aside. [327] In this regard, I note that the SC has adduced cogent evidence in its affidavits of a real risk of dissipation of assets by Madam Teh, based on her integral role and involvement in the elaborate scheme to defraud BPI as detailed in the cause papers. Her conduct in authorising numerous payments and fund transfers through intermediary companies which were eventually siphoned to the Defendants' accounts clearly shows a propensity to conceal assets through layering and fraudulent means. This in itself provides a strong basis to infer a real risk of Madam Teh dissipating her assets to defeat the enforcement of any judgment against her. [328] In conclusion, I find that the SC had made full and frank disclosure of the revocation of the AMLATFPUAA seizure orders against Madam Teh in multiple documents prior to obtaining the ex parte injunction under the CMSA. There was no suppression of material facts that misled the court. In any event, the issue of non-disclosure is no longer relevant at the inter partes stage, where the evidence clearly establishes a real risk of dissipation that warrants the continuation of the freezing injunction against Madam Teh. For these reasons, Madam Teh's application to set aside the ex parte injunction for material non-disclosure is dismissed with costs. The SC's application for an inter partes injunction is allowed with costs Whether the SC has properly commenced the civil action against the Defendants under Section 200 of CMSA by meeting the “it appears to the SC” threshold for alleging a contravention of Section 179. [329] SC submits that for the purposes of commencing a civil action under Section 200(1) of the CMSA, it is sufficient that it “appears to the SC” that the Defendants had contravened Section 179 of the CMSA. This applies to all the Defendants. [330] SC argues that the phrase “where it appears to the Commission” in Section 200(1) sets a lower standard than having to definitively prove the contravention at the outset. It contends that Parliament intended for the SC to have the power to institute civil proceedings as long as it reasonably appears to the SC that there has been a breach of Section 179, without having to conclusively establish the contravention at that stage. [331] In support of this interpretation, SC relies on the Court of Appeal decision in Tengku Dato' Kamal Ibni Sultan Sir Abu Bakar & Ors v Bursa (M) Securities Bhd and another appeal [2013] 1 MLJ 158, where it was held that the words “it appears to the court” in Section 360(1)(c) of the CMSA connote a lower standard than having to “prove” a contravention. [332] SC submits that based on its investigation and the evidence gathered, it reasonably appears to the SC that all the Defendants, Ricky Wong, Wong SK Holdings and Madam Teh, have contravened Section 179(a) and/or (b) of the CMSA through their respective roles and conduct in the scheme to defraud BPI as detailed in the supporting affidavit. [333] Therefore, SC contends that the threshold of “appears to the SC” has been met to properly commence the civil action against each of the Defendants under Section 200 of the CMSA, without having to definitively prove the contravention at this stage. The merits of the case can then be determined through the trial process. [334] Ricky Wong and Wong SK Holdings submit: a) Section 179 of the CMSA is a penal provision that must be construed strictly. It is not a “requirement” under Section 360 of the CMSA. Section 179 prohibits certain conduct rather than imposing requirements. b) The words “in connection with the subscription, purchase or sale of any securities” in Section 179 must be read strictly. The SC’s complaints relate to events after the subscription, purchase or sale of securities, and therefore fall outside the scope of Section 179. c) As Section 179 is not a relevant requirement under Section 360, the SC cannot rely on it to seek orders under Section 360(1)(D). The phrase “it appears to the court” in Section 360(1) does not lower the threshold for the SC. d) Even if Section 360 applies, the Plaintiff must still meet the common law test for a freezing order, which requires showing a good arguable case and a real risk of dissipation of assets. The phrase “it appears to the court” only relates to establishing a contravention, not the grant of orders under Section 360(1)(A)-(P). [335] Madam Teh argues: a) The SC, as a statutory body, can only exercise powers expressly granted to it in the CMSA. A breach of the prohibition in Section 179 is not a breach of a “relevant requirement” under Section 360(13). b) The Court of Appeal in Lai Soon Onn authoritatively found that provisions like Section 179 which are prohibitions are not “relevant requirements” under Section 360. The English cases cited by the Plaintiff are distinguishable due to differences in the UK legislation. c) Even if Section 360 applies, the common law test for a freezing injunction still requires the SC to show a good arguable case and risk of dissipation. The phrase “it appears to the court” does not remove this requirement. [336] In summary, the Defendants contend that a breach of Section 179, being a prohibition rather than a requirement, does not fall within Section 360. The threshold of “it appears to the court” relates only to establishing a contravention, not the applicable legal test for granting injunctive relief under Section 360(1)(D) CMSA. [337] Having carefully considered the submissions of both parties and the authorities cited, I am of the view that the SC has properly commenced the civil action against all the Defendants under Section 200 CMSA. [338] The crux of the issue turns on the interpretation of the phrase “where it appears to the Commission” in Section 200(1) of the CMSA. I agree with the SC's contention that this phrase sets a lower threshold than definitively proving a contravention of the securities laws at the outset. The natural and ordinary meaning of the words “appears to” denotes a lower standard akin to a reasonable belief based on the information available, rather than conclusive proof. [339] This interpretation is supported by the Court of Appeal's decision in Tengku Dato' Kamal Ibni Sultan Sir Abu Bakar & Ors v Bursa (M) Securities Bhd [supra] which held that similar phrasing in Section 360(1)(c) of the CMSA - “it appears to the court” - connotes a lower standard than having to strictly “prove” a contravention. Although that case dealt with a different provision, the same principle of statutory interpretation should apply. Parliament's choice of the words “appears to” instead of “proves” must be given effect and taken to allow some leeway based on the regulator's reasonable assessment. [340] I do not accept the Defendants' argument that Section 179 of the CMSA is purely a penal provision that falls outside the scope of Section 360. In the earlier part of this judgment I have found that while Section 179 prohibits certain manipulative conduct, compliance with its terms is nonetheless a requirement imposed by the CMSA. The fact that it is phrased in the negative does not alter its status as a requirement. This is clear from Section 360(13)(a)(i) which defines “relevant requirement” broadly to include “a requirement which is imposed by or under this Act”. [341] The Court of Appeal's decision in Lai Soon Onn does not assist the Defendants. That case involved the narrow issue of whether compliance with the Malaysian Code on Take-Overs and Mergers was a “relevant requirement”. The finding was specific to the unique framework for the Take-Over Code and does not lay down a general rule that all prohibitions fall outside Section 360. In contrast, the High Court in Securities Commission v Chan Chui Mei recognised that a breach of Section 179 amounts to a breach of a relevant requirement under Section 360. [342] On the facts, I am satisfied that the SC has shown that it reasonably appears that all three Defendants have contravened Section 179(a) and/or (b) based on the evidence gathered in its investigation to date: a) For Ricky Wong, the evidence indicates he had personal knowledge of the BPI Corporate Exercises and was the mastermind of the devices and schemes to defraud BPI. He provided funding for the subscription of shares and eventually received substantial proceeds through his nominee companies. b) For Wong SK Holdings, the evidence shows it acted as Ricky Wong's alter ego and facilitated the flow of funds. As a major shareholder in BPI, it subscribed for shares in the BPI Corporate Exercises funded by Ricky Wong and eventually received RM9.3 million of the proceeds. c) For Madam Teh, while her involvement may be less than Ricky Wong, the evidence still indicates she participated in the scheme by signing numerous cheques as BPI's bank signatory to approve payments to the nominee companies based on fictitious transactions. She was also a shareholder and director in various nominee companies that received proceeds. [343] Although the Defendants argue the alleged conduct occurred after the subscription or sale of securities, this does not take the case outside Section 179. The phrase “in connection with” is to be interpreted flexibly and covers acts that have a nexus with the securities transactions, even if subsequent. Here, the Defendants' alleged conduct of diverting BPI's fundraising proceeds through sham transactions is clearly connected with the sale of securities under the BPI Corporate Exercises. [344] Therefore, I find that the SC has sufficiently met the threshold of establishing that it reasonably appears to the SC that there have been breaches of Section 179 by the Defendants to invoke the SC's power to commence a civil action under Section 200. The merits of the case can then be ventilated and determined through a full trial. The Defendants' arguments on the applicable legal test for granting an injunction and risk of dissipation are a separate enquiry from the threshold for commencing an action. [345] In conclusion, the Defendants have not shown any reason to set aside the ex parte injunction on the basis that the action is not properly commenced. The SC has demonstrated a good arguable case at this interlocutory stage that all three Defendants have contravened Section 179, which amounts to a breach of a relevant requirement under Section 360. The statutory language of “appears to” in Section 200(1) allows the action to be brought based on the SC's reasonable belief without definitively proving the breach at the outset. Whether the SC is required to provide an undertaking as to damages under Section 360(5) CMSA. [346] The SC submits that it is not required to provide an undertaking as to damages in seeking an injunction under Section 360 CMSA for two key reasons. [347] Firstly, the SC points out that Section 360(5) CMSA expressly provides that when an application for an injunction under Section 360(1) is made by the SC, the court shall not require any undertaking as to damages to be given by or on behalf of the SC as a condition of granting the order. [348] Secondly, the SC contends that as a regulatory body commencing this action in the public interest to enforce securities laws, it should not be compelled to provide an undertaking as to damages. [349] The SC argues that a public authority seeking to enforce the law in the interest of the public, in pursuance of a public duty and with limited resources allocated by the state, should not be deterred from doing so by fear of claims for damages arising from a cross-undertaking. [350] Therefore, the SC submits that it is not obligated to provide an undertaking as to damages to obtain an injunction under Section 360 CMSA, both by the clear wording of the statute itself and based on established case law principles regarding public authorities enforcing the law. [351] Having carefully considered the submissions and the authorities cited, I find that the SC is not required to provide an undertaking as to damages to obtain an injunction under Section 360 CMSA. [352] On the specific issue of whether the SC is required to provide an undertaking as to damages when seeking an injunction under Section 360 CMSA, I am persuaded by the SC's arguments. [353] Firstly, the plain wording of Section 360(5) CMSA clearly states that where an application for an order under Section 360(1) is made by the SC, the court “shall not, as a condition of the grant of the order, require any undertaking as to damages to be given by or on behalf of the Commission”. This unambiguously exempts the SC from having to provide an undertaking as to damages when applying for injunctions under the said provision. The court is expressly precluded from imposing such a requirement on the SC. [354] Secondly, I am guided by the principle, well-established in the authorities from other jurisdictions involving similar statutory bodies, that a public authority acting pursuant to a public duty to enforce the law in the public interest should not be fettered or deterred from carrying out its functions by having to give undertakings as to damages. [355] The SC has cited three persuasive cases on this point. In Financial Services Authority v Sinaloa Gold plc and others [2013] 2 All ER 339, the UK Supreme Court held that a public authority seeking to enforce the law in the interests of the public generally ought not to be deterred from doing so by the fear of cross-claims arising from a cross-undertaking, especially given its limited allocated state resources. [356] Similarly, in Securities and Investments Board v Lloyd-Wright and another [1993] 4 All ER 210, the UK Chancery Division found that no undertaking as to damages was required from the Securities and Investments Board seeking injunctive relief to restrain contraventions of the Financial Services Act 1986, as the remedy was sought for the benefit of the public at large as a matter of law enforcement. [357] The Ontario Court of Justice in Ontario (Securities Commission) v von Anhalt, [2005] O.J. No. 247 also arrived at the same position, ruling that the Ontario Securities Commission, as a public authority, was not required to provide undertakings as to damages where it was attempting to enforce the securities law of the land. [358] I am of the considered view that this principle is applicable to the SC's application here. The SC is a statutory body established under the SCMA to regulate the Malaysian capital market. It is empowered under Sections 200 and 360 CMSA to commence civil actions to restrain breaches of securities laws and protect the investing public. In doing so, the SC is discharging its public duty and acting in the interest of the public at large. [359] Requiring the SC to provide an undertaking as to damages would have a chilling effect on the exercise of its statutory enforcement powers, as it would constantly have to weigh the potential of incurring liability to alleged wrongdoers before taking action to curb securities misconduct. This would hamper the SC in acting effectively, expeditiously and fearlessly to protect the public and the integrity of the capital market, especially with the limited financial resources it has as a public authority. [360] I do not think that Parliament could have intended to curtail the SC's ability to carry out its enforcement functions in such a manner, by exposing it to the risk of cross-undertakings. If that were the case, Section 360(5) CMSA would not have been worded to explicitly state that the court shall not require undertakings as to damages from the SC when granting injunctions under Section 360. [361] The scope and terms of such an order remain at the discretion of the court to determine as appropriate based on the facts. Concerns about the proportionality and effect of the injunction therefore go towards the court's exercise of discretion in deciding whether injunctive relief should be granted at all, and if so on what terms, rather than whether an undertaking must be furnished. [362] In conclusion, I am satisfied that the SC is not required to provide an undertaking as to damages in support of its application for a freezing injunction under Section 360 CMSA. This is based on the clear exclusion of such an undertaking in Section 360(5) CMSA, as well as the established principle that public authorities acting in the discharge of their public duty to enforce the law should not be made to provide cross-undertakings in damages. Whether the SC has acted in bad faith and abused the process of the court by commencing this civil suit after having earlier pursued action against them under AMLATFPUAA. [363] Ricky Wong and Wong SK Holdings submit that the SC has acted in bad faith and abused the process of the court by commencing this civil suit after having earlier pursued action against them under the AMLATFPUAA. [364] They argue that the SC had initially frozen and seized their accounts under AMLATFPUAA by alleging that the funds therein were proceeds from unlawful activities related to the alleged securities offences. [365] However, they contend that after conducting investigations under the criminal AMLATFPUAA proceedings, the SC failed to obtain consent from the Public Prosecutor to continue under the criminal jurisdiction or continue freezing the accounts under AMLATFPUAA. [366] Ricky Wong and Wong SK Holdings submit that instead of accepting this outcome under the criminal proceedings, the SC has now initiated a separate civil suit under lower evidentiary standards in an attempt to freeze the same accounts and assets. [367] They argue that this amounts to the SC “changing tack” and resorting to civil proceedings merely because it could not meet the higher burden under criminal law against them. [368] Ricky Wong and Wong SK Holdings contend that this contradictory approach by the SC contravenes principles of fairness, finality and constitutes an abuse of process and a collateral attempt to circumvent the criminal law findings. [369] Madam Teh submits that the SC has acted in bad faith by re-freezing her personal accounts through this civil suit after the very same accounts were unconditionally released by the Public Prosecutor in the earlier AMLATFPUAA proceedings. [370] She argues that after originally freezing her accounts under AMLATFPUAA allegations, the Public Prosecutor concluded there was no basis to continue freezing them and issued revocation orders to release the accounts unconditionally on 1.4.2020. [371] However, Madam Teh contends that the SC has now re-frozen those very accounts through the ex parte freezing injunction obtained on 8.5.2020 in this civil suit, without providing any justification for disregarding the earlier findings. [372] She submits that the SC has failed to explain why it is entitled to effectively extend the earlier freezing orders through this civil suit after her accounts were cleared in the AMLATFPUAA criminal proceedings. [373] Madam Teh argues that this conduct by the SC is tantamount to mala fides, as it is either ignoring or seeking to nullify the conclusions reached by the Public Prosecutor, who is the guardian of public interest in criminal prosecutions. [374] She contends that allowing the re-freezing without justification would permit the SC to arbitrarily disregard prior legal determinations and riders by other lawful authorities like the Public Prosecutor. [375] In essence, the Defendants collectively accuse the SC of acting in bad faith and abuse of process by pursuing this civil suit as a means to circumvent or nullify the outcomes of the earlier criminal AMLATFPUAA proceedings against them. [376] The SC submits that there is no bad faith or abuse of process in commencing this civil suit after taking action under AMLATFPUAA. The SC contends that investigation or action under AMLATFPUAA does not preclude it from filing a civil suit under the CMSA for several reasons. Firstly, criminal proceedings under the AMLATFPUAA are initiated at the discretion of the Public Prosecutor, not the SC. Secondly, the objectives of a civil action under the CMSA and a criminal action under the AMLATFPUAA differ significantly - the former aims at compensating victims, while the latter focuses on imposing criminal penalties. Thirdly, Section 360(14) of the CMSA explicitly states that an application under this provision should not undermine any other legal action by the SC under any law. Lastly, Section 200(1) of the CMSA empowers the SC to initiate civil proceedings irrespective of whether the defendant has faced criminal charges for the violation. [377] Moreover, the SC highlights that it has obtained written consent from the Public Prosecutor to initiate this civil suit, belying any allegations of bad faith. [378] The SC argues there is no bad faith in obtaining an injunction over Madam Teh's accounts that were previously released by prosecutors under the AMLATFPUAA. [379] The SC points out that the present injunction under CMSA is a worldwide freezing order covering all of Madam Teh's assets up to the value of the claim. The purpose is to preserve assets pending determination of this civil suit, which is distinct from the earlier AMLATFPUAA orders which aimed to preserve assets pending investigations into criminal offences. [380] The SC contends there is nothing precluding it from seeking an injunction over these accounts under CMSA despite their earlier release under AMLATFPUAA, as the two regimes serve different purposes. The release was at the Prosecutor's discretion and did not bind the SC in commencing this action. [381] Furthermore, the SC submits that the risk of asset dissipation and need for an injunction persist regardless of the accounts' previous status under AMLATFPUAA. [382] Therefore, the SC maintains it has acted properly and without bad faith in respect of both Madam Teh and Ricky Wong and Wong SK Holdings. [383] Having carefully considered the submissions of both parties and the authorities cited, I find that the SC has not acted in bad faith or abused the court process by commencing this civil suit after pursuing action against the Defendants under the AMLATFPUAA. [384] Ricky Wong and Wong SK Holdings' contention that the SC has “changed tack” and resorted to civil proceedings merely because it could not meet the higher burden under criminal law is untenable and without merit. This argument fundamentally misunderstands the distinct roles of the Public Prosecutor and the SC in criminal and civil enforcement under Malaysian securities laws. [385] As rightly pointed out by the SC, criminal proceedings under the AMLATFPUAA are instituted at the sole discretion of the Public Prosecutor, not the SC. This is made plain by the High Court decision of Datuk Ishak bin Ismail lwn Pendakwa Raya [2016] MLJU 1334, where Nordin Hassan J held: “[27] undang-undang adalah jelas seperti yang telah dinyatakan, bahawa kuasa untuk mendakwa adalah terletak pada Pendakwaraya dan tidak pada pihak SC, apa juga niat pihak SC tidak pada bila-bila masa menjejaskan hak Pendakwaraya untuk membuat pertuduhan jenayah terhadap Pemohon jika mendapati keterangan yang ada adalah mencukupi.” (Translation: [27] the law is clear as stated, that the power to prosecute lies with the Public Prosecutor and not with the SC, whatever the SC's intentions do not at any time affect the Public Prosecutor's right to proffer criminal charges against the Applicant if he finds that the available evidence is sufficient.) [386] Therefore, the mere fact that consent to consent from the Public Prosecutor to continue under the criminal jurisdiction was not obtained from the Public Prosecutor under the earlier AMLATFPUAA proceedings does not in any way preclude or prevent the SC from commencing a separate civil action under the CMSA. The SC's right to pursue civil remedies exists independently from the Public Prosecutor's discretion in respect of criminal prosecution. One cannot extrapolate from the absence of criminal charges that the SC is barred from seeking relief through the civil courts. To hold otherwise would unduly conflate the distinct powers of the Public Prosecutor and SC. [387] This is further reinforced by the express provisions in the CMSA itself. Section 360(14) of the CMSA unequivocally states that: “An application made under this section shall not prejudice any other action that may be taken by the Commission under securities laws or any other law or rules.” [388] The language used is clear and unambiguous. Parliament expressly intended that action taken by the SC under section 360, which provides for wide-ranging civil remedies, shall not affect its ability to take any other action under any law, which necessarily includes criminal proceedings under AMLATFPUAA. This puts paid to any argument that the SC's commencement of this suit somehow contradicts or undermines the earlier criminal law outcome. [389] Furthermore, section 200(1) of the CMSA provides as follows: “Where it appears to the Commission that any person has contravened section 175, 176, 177, 178, 179 or 181 [market misconduct provisions], the Commission may institute civil proceedings in the court against that person, whether or not that person has been charged with an offence in respect of the contravention, or whether or not a contravention has been proved in a prosecution.” [390] This provision categorically allows the SC to institute civil proceedings for market misconduct regardless of whether the defendant has been charged with an offence for the contravention. In other words, even if criminal charges are not pressed under AMLATFPUAA or any other law, the SC is statutorily empowered to separately pursue defendants via the civil courts as long as the ingredients of the market misconduct provisions are made out. The Act draws a clear distinction between the criminal and civil liability regimes, such that action or inaction on one front does not necessarily impact the other. [391] In this regard, to characterise the SC's commencement of this suit as “changing tack” or attempting to circumvent the criminal law outcome is to ignore the clear words of the statute and the express Parliamentary intention to facilitate parallel criminal and civil proceedings. The CMSA provisions are specifically designed to empower the SC to seek civil remedies to protect investors and market integrity, independently of the status of criminal investigations or prosecutions. As such, the SC's actions here are entirely proper and in line with its statutory mandate. [392] Crucially, the SC has obtained written consent from the Public Prosecutor under Section 54(3) AMLATFPUAA to initiate the present civil suit, as evidenced by an email dated 26.4.2020 from Muhammad Saifuddin Hashim on behalf of the Public Prosecutor to the SC’s Deputy Director for Prosecution & Civil Enforcement Department, Puan Ros Mawar Rozain (now Judicial Commissioner). Section 54(3) AMLATFPUAA reads: “(3) For so long as a seizure of any property under this Act remains in force, no action, suit or other proceedings of a civil nature shall be instituted, or if it is pending immediately before such seizure, be maintained or continued in any court or before any other authority in respect of the property which has been so seized, and no attachment, execution or other similar process shall be commenced, or if any such process is pending immediately before such seizure, be maintained or continued, in respect of such property on account of any claim, judgement or decree, regardless whether such claim was made, or such judgement or decree was given, before or after such seizure was effected, except at the instance of the Federal Government or the Government of a State, or at the instance of a local authority or other statutory authority, or except with the prior consent in writing of the Public Prosecutor.” [393] This fact wholly undermines Ricky Wong and Wong SK Holdings' allegations of bad faith or collateral attempt to circumvent earlier criminal law findings. The Public Prosecutor's express consent to the SC commencing this civil action demonstrates that the guardian of public interest in criminal prosecutions does not view the SC's current suit as contradicting any prior determinations made in the criminal sphere. [394] It must be emphasised that the Public Prosecutor is vested with the sole discretion to institute, conduct or discontinue any criminal proceedings under Article 145(3) of the Federal Constitution (see Government of Malaysia v Lim Kit Siang [1988] 2 MLJ 12 (SC)). [395] Therefore, the Public Prosecutor's informed decision to consent to the SC's present civil proceedings, after having sight of the earlier criminal investigations and outcomes, carries immense weight. It constitutes a recognition by the ultimate prosecutorial authority that there is no inconsistency between the prior criminal action and the current civil suit. The Public Prosecutor's approval signals that this civil action is a legitimate exercise of the SC's statutory powers that does not constitute an abuse of process. [396] Moreover, it is trite that criminal liability is distinct from civil liability. The two regimes serve different purposes and entail different considerations. Discontinuing an earlier criminal action does not preclude a subsequent civil suit on the same facts, and vice versa (see Subramaniam a/l Muniandy v Letchumi a/p Thasan & Ors [2021] MLJU 281 (CA)). [397] Here, the purposes of civil action under the CMSA and criminal action under AMLATFPUAA are substantially different. While the former focuses on victim compensation through restitutionary remedies like disgorgement of ill-gotten gains, the latter revolves around criminal punishment and deterrence of the perpetrator. Given their distinct objectives, there is nothing amiss in pursuing both concurrently or consecutively, as long as the requirements under each regime are independently satisfied based on the applicable burdens and standards of proof. The existence of prior criminal proceedings does not give rise to an estoppel against the instant civil action. [398] The contention is supported by the unequivocal terms of the CMSA itself. Section 360(14) stipulates that an application made under this section shall not prejudice any other action that may be taken by the SC, a stock exchange, a derivatives exchange, or an approved clearing house under any securities laws or any other law or rules. [399] Furthermore, as per section 200(1), where it appears to SC that sections 175, 176, 177, 178, 179, or 181 has been contravened, the SC may institute civil proceedings in court against that person, irrespective of whether he has been charged with an offence related to the contravention or whether the contravention has been proven in a prosecution. [400] These express statutory provisions put it beyond doubt that the SC is empowered to commence civil proceedings under the CMSA, notwithstanding any prior criminal action under AMLATFPUAA or any other law. Ricky Wong and Wong SK Holdings have not shown that the requirements for invoking sections 360 and 200 of the CMSA are unsatisfied in the present case. [401] In respect of Madam Teh's contentions, I find that the SC has not acted in bad faith by obtaining an injunction over accounts that were previously released by prosecutors under the AMLATFPUAA. It is important to note that the present injunction under Section 360 CMSA is a worldwide Mareva freezing order which covers all of Madam Teh's assets up to the value of the claim. This is distinct in purpose and scope from the earlier AMLATFPUAA orders which aimed to preserve specific accounts pending investigations into criminal offences. [402] While the release of the accounts by the Public Prosecutor ended the earlier freeze under AMLATFPUAA, there is nothing precluding the SC from seeking a fresh injunction over those same accounts under the CMSA, as the two regimes serve different purposes. As the SC rightly submits, the risk of asset dissipation and need for an injunction persist regardless of the accounts' previous status under AMLATFPUAA. The SC has a legitimate basis to ensure that sufficient assets are preserved to meet any potential judgment in this civil suit, separate from the question of criminal liability. [403] In any event, the lifting of the AMLATFPUAA freeze was at the Public Prosecutor's discretion and did not bind the SC in commencing this action. Contrary to Madam Teh's assertions, the release did not amount to a finding that there was no basis to freeze the accounts, but merely reflected the Public Prosecutor's decision at that juncture. It cannot be interpreted as precluding action under different legislation by other lawful authorities like the SC. To hold otherwise would unduly fetter the SC's ability to pursue statutory remedies under the CMSA. [404] On the facts, I am satisfied that the SC has sufficiently justified the worldwide Mareva injunction over Madam Teh's assets to preserve the subject matter of this suit, notwithstanding the earlier release of her accounts under AMLATFPUAA. The extensive evidence of her involvement in the scheme, including signing off on numerous fraudulent transactions, amply demonstrates a real risk of dissipation that warrants the injunction, regardless of the AMLATFPUAA position. [405] For the above reasons, I find that the SC has not acted in bad faith or abused the court's process in respect of both the Ricky Wong and Wong SK Holdings as well as Madam Teh. The Defendants have not shown any basis to conclude that the SC is acting improperly or seeking to usurp the prior findings of the Public Prosecutor. Whether there is delay by the SC in commencing this suit. [406] Ricky Wong and Wong SK Holdings submit that the SC has been guilty of inordinate and prejudicial delay in filing this civil suit against them. [407] They contend that based on the SC's own case, the alleged wrongdoings relating to the corporate exercises at BPI took place between 2013 to 2015. However, the SC only commenced investigations into these matters in 2017. [408] They argue that even after completing its investigations in 2017, the SC further delayed filing this suit until May 2020 - a delay of around 3 years from when it first began probing the alleged issues. [409] Ricky Wong and Wong SK Holdings submit that the SC has provided no cogent explanation justifying this inordinate delay in initiating legal proceedings despite having its investigation findings from 2017 itself. [410] They contend that this lengthy delay is prejudicial as it has allowed the SC to continue freezing their accounts and assets for an extended period without actual legal proceedings on foot. [411] Furthermore, they argue that the delay appears even more inordinate when coupled with the fact that the SC had already taken separate action by freezing and seizing accounts under the AMLATFPUAA proceedings around 2019 itself. [412] Madam Teh echoes the submissions made by Ricky Wong and Wong SK Holdings regarding the SC's delay of around 3 years in filing this suit from when it first commenced investigations in 2017. [413] Additionally, she submits that the SC's delay is particularly prejudicial against her, as her personal accounts remained frozen for nearly a year from May 2019 to April 2020 under the AMLATFPUAA proceedings, before being re-frozen in this suit from May 2020 onwards. [414] Madam Teh argues that by delaying the filing of this suit, the SC has been able to keep her funds frozen for an inordinately long period despite having completed its investigations, while simultaneously depriving her of the full benefit of the revocation orders issued in her favor in the AMLATFPUAA proceedings. [415] She contends that the SC has failed to provide any reasonable justification for this prejudicial delay which has impacted her financial affairs and transactions over an extended period based on mere allegations at this stage. [416] In summary, the Defendants collectively accuse the SC of inordinate delay in initiating this suit many years after becoming aware of the alleged issues, with no reasonable justification provided, causing continuing prejudice by keeping their assets frozen for a prolonged period. [417] Regarding the issue of delay in commencing this suit, the SC submits that there has been no undue delay and in any event, the action was brought within the statutory limitation period. [418] In respect of all Defendants, the SC contends that the suit was filed within the 12-year limitation period prescribed under Section 200(6) CMSA. [419] It is not disputed by any of the parties that the alleged wrongdoings relating to the BPI Corporate Exercises took place between 2013 to 2015. It is also common ground that the SC only commenced its investigations into these irregularities in 2017. [420] However, having considered the submissions of the SC, I am satisfied that the gap between the occurrence of the impugned transactions and the commencement of investigations is justified and does not constitute undue delay in the circumstances. The SC has explained, and this has not been controverted by the Defendants, that the manipulative scheme employed by the Defendants was highly complex in nature, involving numerous related entities and parties, including foreign elements in the Republic of Korea. [421] In order to get to the bottom of this elaborate scheme and establish the trail of funds, it was necessary for the SC to conduct a thorough and extensive investigation, which understandably took a substantial period of time. The SC's investigating powers are set out in the SCMA, which under Section 15 mandates the SC to take all reasonable measures to monitor and safeguard the integrity of the capital market. Section 16 further provides that “The Commission shall have all such powers as may be necessary for or in connection with, or reasonably incidental to, the performance of its functions under the securities laws.” [422] Gathering evidence from multiple entities, unravelling the corporate relationships, following the money trail and seeking information from foreign authorities in the Republic of Korea would inevitably lengthen the time required to complete the investigation. I accept the SC's submission that it would have been impractical, if not impossible, to properly investigate such a complex web of transactions spanning several years in a short time frame. [423] The SC had to be thorough and comprehensive in its investigations, as a premature suit based on insufficient evidence would have been prejudicial to its case and contrary to public interest. I am therefore not persuaded that the SC had been tardy or had unduly delayed investigations. The mere passage of time between the events and the commencement of investigations, in the absence of any evidence of deliberate tardiness or prejudice, is insufficient to constitute undue delay. The time span of around 2 years for the SC to commence investigations was, in my view, fair and reasonable in light of the complex, multi-layered and cross-border nature of the transactions requiring investigation. [424] Furthermore, the SC submits that the investigation was prolonged due to the lack of cooperation by multiple parties, including Ricky Wong, whose whereabouts remain unknown and a warrant of arrest has been issued against him. Other key individuals like Ken Ong and Amirruddin bin Nin were similarly uncooperative, leading to charges being filed against them for failing to appear before the investigating officer. [425] The SC contends that despite these challenges, it has acted diligently in pursuing its investigation and commencing the suit once sufficient evidence was gathered. [426] Regarding Madam Teh, the SC argues that she has not substantiated any specific prejudice suffered by her as a result of the alleged delay. [427] In conclusion, the SC maintains that it has not caused any undue delay in filing this suit against all the Defendants, taking into account the complexity of the case, challenges faced in the investigation, and the statutory limitation period. The SC submits that the Defendants have not shown any prejudice or basis to deny the orders sought on the ground of delay. [428] Having carefully considered the submissions of both parties and the authorities cited, I find that there is no undue or inordinate delay on the part of the SC in commencing this suit against the Defendants that would warrant setting aside the Ex Parte Injunction Order granted on 8.5.2020. [429] It is not disputed by any of the parties that the alleged wrongdoings relating to the BPI Corporate Exercises took place between 2013 to 2015. It is also common ground that the SC only commenced its investigations into these irregularities in 2017. [430] However, having considered the submissions of the SC, I am satisfied that the gap between the occurrence of the impugned transactions and the commencement of investigations is justified and does not constitute undue delay in the circumstances. The SC has explained, and this has not been controverted by the Defendants, that the manipulative scheme employed by the Defendants was highly complex in nature, involving numerous related entities and parties, including foreign elements in the Republic of Korea. [431] In order to get to the bottom of this elaborate scheme and establish the trail of funds, it was necessary for the SC to conduct a thorough and extensive investigation, which understandably took a substantial period of time. The SC's investigating powers are set out in the SCMA, which under Section 15 mandates the SC to take all reasonable measures to monitor and safeguard the integrity of the capital market. Section 16 further provides that “The Commission shall have all such powers as may be necessary for or in connection with, or reasonably incidental to, the performance of its functions under the securities laws.” [432] Gathering evidence from multiple entities, unravelling the corporate relationships, following the money trail and seeking information from foreign authorities in the Republic of Korea would inevitably lengthen the time required to complete the investigation. I accept the SC's submission that it would have been impractical, if not impossible, to properly investigate such a complex web of transactions spanning several years in a short time frame. [433] The SC had to be thorough and comprehensive in its investigations, as a premature suit based on insufficient evidence would have been prejudicial to its case and contrary to public interest. I am therefore not persuaded that the SC had been tardy or had unduly delayed investigations. The mere passage of time between the events and the commencement of investigations, in the absence of any evidence of deliberate tardiness or prejudice, is insufficient to constitute undue delay. The time span of around 2 years for the SC to commence investigations was, in my view, fair and reasonable in light of the complex, multi-layered and cross-border nature of the transactions requiring investigation. [434] I also note the SC's submission, which has not been contradicted by the Defendants, that its investigation was prolonged due to lack of cooperation by multiple key parties involved in the impugned transactions. [435] The SC has highlighted that Ricky Wong, who was the alleged mastermind of the scheme, has failed to cooperate with the investigations from the outset. Ricky Wong's whereabouts remain unknown up to now. The SC's difficulty in locating Ricky Wong is evident from the fact that it had to initiate a warrant of arrest against him, as well as enlist the assistance of Interpol to trace his whereabouts. All these steps demonstrate the SC's diligence but also the obstacles faced in investigating Ricky Wong's involvement. [436] The SC has also named two other individuals, Ken Ong and Amirruddin bin Nin, who failed to appear before the investigating officer to have their statements recorded, despite being issued notices under Section 32(8)(a) AMLATFPUAA. This necessitated the SC to file criminal charges against them in 2020. The charging Ken Ong and Amirruddin bin Nin for failure to complay with the notices lends credence to the SC's contention that these key persons had obstructed investigations. [437] Viewed in that light, I accept the SC's submission that Ricky Wong, Ken Ong and Amirruddin's active non-cooperation and evasion stymied the progress of investigations. The SC cannot be faulted for the delay occasioned by circumstances outside its control. It would be unreasonable to expect an investigation to be concluded expeditiously when suspects and witnesses abscond or refuse to cooperate. [438] That said, the SC did not simply abandon investigations but took concrete steps to compel the appearance of the uncooperative individuals, including obtaining a warrant of arrest and instituting criminal charges. This reflects a diligent and resolute approach to the investigations. [439] Despite the challenges posed by Ricky Wong and others, I find that the SC had diligently pursued investigations to the best of its abilities in the circumstances. Once sufficient evidence was garnered, it promptly initiated this civil action. The SC's diligence and persistence in the face of the challenges fortifies my view that the delay in commencement of proceedings was not undue or inordinate. [440] In light of these challenges and the complexity of the scheme being investigated, I accept that the SC has acted diligently in pursuing its investigation and commencing the suit once it had gathered sufficient evidence to do so. There is no basis to suggest that the SC had unduly delayed in initiating this action. [441] Furthermore, it is pertinent to note that the SC had commenced this suit well within the prescribed limitation period under CMSA. The fact that the action was brought within the statutory time limit is a strong factor militating against a finding of inordinate delay. [442] Section 200(6) of the CMSA provides as follows: “Civil proceedings under subsection (2) or 199(1) may be commenced at any time within twelve years from—

the date on which the cause of action accrued; or

the date on which the Commission or the person who instituted the proceedings, as the case may be, discovered the contravention.” [443] In the present case, the alleged wrongdoings took place between 2013 to 2015. The SC discovered the breaches in 2017 when it commenced investigations. The SC filed this suit on 5.5.2020. Counting from either the date of the alleged contraventions (2013-2015) or from the date of discovery by the SC (2017), the commencement of this action on 5.5.2020 is well within the 12-year statutory limitation period prescribed under Section 200(6) of the [444] The generous limitation period of 12 years for actions of this nature reflects a legislative recognition that securities fraud may take time to unravel, investigate and build a case on. It also evinces a statutory bias in favour of bringing suited parties to account over protecting defendants from stale claims. [445] While Madam Teh strenuously argues that the delay by the SC in commencing this suit has been particularly prejudicial to her, I am unable to accept her contention. [446] Madam Teh's main grouse is that her accounts remained frozen under the AMLATFPUAA proceedings from May 2019 until they were finally released in April 2020, only to be frozen again shortly after in May 2020 when the SC filed the present suit. She contends that this had severely impacted her financial affairs over an extended period, and that the SC had failed to provide reasonable justification for subjecting her to such prejudice based on what she characterises as “mere allegations.” [447] With respect, I am unable to agree with Madam Teh that the freezing of her accounts under the AMLATFPUAA amounts to undue prejudice attributable to delay on the SC's part in initiating the present proceedings. It is important to note that the earlier freezing of Madam Teh's accounts from 2019 to 2020 was pursuant to separate proceedings under the AMLATFPUAA. The SC is statutorily empowered to take such action under the AMLATFPUAA, independent of any potential action under the CMSA. This is clear from the scheme of the AMLATFPUAA, which sets out the SC's responsibilities and powers when it has reasons to believe a financial institution has been used for money laundering. [448] Section 44(1) of AMLATFPUAA empowers an enforcement agency including the SC to issue an order to freeze any property of any person for up to 90 days if an investigation into an unlawful activity has commenced against that person. Section 50(1) AMLATFPUAA allows the Public Prosecutor to seize movable property that is proceeds of an unlawful activity in the possession, custody or control of a financial institution until it is varied or revoked by the Public Prosecutor. These provisions enable the SC to promptly prevent dissipation of assets suspected to be involved in money laundering, even as it continues investigations. [449] The fact that the SC had invoked these powers under the AMLATFPUAA and frozen Madam Teh's accounts while investigations were ongoing cannot, without more, amount to prejudice flowing from a delay in commencing the present suit under the CMSA. The AMLATFPUAA proceedings were a separate matter from the current civil recovery action. [450] As such, any delay in commencing the present suit under the CMSA cannot be conflated with the separate action of freezing Madam Teh's accounts under the AMLATFPUAA. If Madam Teh's complaint is that her accounts were wrongfully frozen under the AMLATFPUAA, her remedy lies in challenging those proceedings, not by attacking the current suit on grounds of delay. [451] In any event, I note that Madam Teh's accounts were indeed released in April 2020, albeit only for a brief one-month period before the current suit was filed. The fact that there was some gap, however brief, between the release of the AMLATFPUAA freeze order and the current injunction fortifies my view that the two actions are separate and distinct. The mere brevity of the intervening period does not, in itself, render the alleged delay in the present proceedings inordinate or unduly prejudicial. [452] Significantly, the SC has also pointed out that despite her complaints about prejudice and impact on her financial affairs, Madam Teh has not substantiated any specific prejudice suffered by her as a result of the alleged delay. She has not particularised any transactions that were thwarted or opportunities that were lost in that one-month period when her accounts were unfrozen. Unsubstantiated allegations of prejudice without tangible evidence do not assist Madam Teh. [453] Accordingly, Madam Teh's unsubstantiated assertions of prejudice are insufficient to warrant a finding that the SC's delay was inordinate. Any prejudice claimed by her as a result of her accounts being frozen has to be considered in the context of the two distinct proceedings and measured against the statutory powers conferred on the SC under each legislation. When viewed through that lens, I am satisfied that there has been no undue delay on the SC's part in commencing the present proceedings that has unduly prejudiced Madam Teh. [454] Accordingly, I find that the SC has provided reasonable justification for the time taken to commence this action against all the Defendants. Proceedings were initiated within the generous statutory limitation period. The nature and complexity of the impugned scheme, the challenges faced by the SC in its investigation including non-cooperation of key individuals, and the absence of any specific prejudice to the Defendants, lead me to conclude that the delay was not undue or inordinate so as to warrant any relief to the Defendants on this ground. I therefore dismiss the Defendant's contention that the ex parte injunction should be set aside for delay in initiating the suit. Whether the ex parte injunction order ought to be set aside as the SC relied on unaffirmed affidavit for ex parte injunction. [455] The SC submits that there is no basis to set aside the ex parte injunction order on the ground that it relied on an unaffirmed affidavit. [456] The SC contends that in the ex parte hearing, this court had properly exercised its discretion under Order 41 Rule 9(2) ROC to accept the unaffirmed affidavit, taking into account the uncertainty in the resumption of business operations and various challenges arising from the COVID-19 pandemic at that time and the urgency of the Injunction Application. [457] The SC points out that it had filed the Injunction Application with a certificate of urgency and provided an express undertaking on two occasions to file the affirmed affidavit in the cover letter filed with the ex parte application and orally during the ex parte hearing, where Counsel for the SC undertook to file the affirmed affidavit by the next working day. [458] The SC submits that this court, while noting the affidavit was not affirmed, exercised its discretion to accept Counsel's undertaking and allowed the affidavit to be relied upon for the ex parte hearing. Subsequently, in compliance with the undertaking, the SC filed the affirmed affidavit with the same contents on the next working day. [459] The SC argues this discretion to allow reliance on an unaffirmed affidavit based on counsel's undertaking to refile is supported by the High Court decision in SS Precast Sdn Bhd v Serba Dinamik Group Bhd & Ors [2020] MLJU 400. [460] Moreover, the SC contends the Defendants have not established any prejudice suffered by them due to the initial use of an unaffirmed affidavit, which was promptly remedied. [461] In conclusion, the SC maintains that the ex parte injunction order should not be set aside on this basis as the court had properly exercised its discretion to allow the unaffirmed affidavit and the SC had duly complied with its undertaking to refile. [462] Ricky Wong and Wong SK Holdings submit that the ex parte freezing injunction obtained by the SC should be set aside as the SC improperly relied on an unsigned and unaffirmed affidavit during the ex parte hearing before the court. [463] They contend that under Order 41 Rule 1(7) ROC, it is a mandatory requirement that every affidavit must be signed by the deponent and the jurat must be signed by the person before whom it is sworn. [464] Ricky Wong and Wong SK Holdings argue that the affidavit relied upon by the SC during the ex parte hearing on

8.5.2020 was not only unaffirmed by the deponent, but was completely unsigned and bare of any signature or jurat at that stage. [465] They submit that such an unsigned and unaffirmed affidavit is rendered invalid and inadmissible under the ROC, and the court should not have placed any reliance on its contents when granting the ex parte injunction. [466] Furthermore, they contend that the SC's delayed attempt to rectify the affidavit by getting it affirmed on 12.5.2020, after obtaining the injunction order, amounts to an impermissible attempt to cure a fatal defect through an afterthought. [467] Madam Teh aligns with and echoes the submissions made by Ricky Wong and Wong SK Holdings on this issue. [468] She further submits that the SC's reliance on an unsigned and unaffirmed affidavit during the ex parte hearing deprived the court of any valid evidence to substantiate the SC's application and amounted to a serious violation of procedural propriety. [469] Madam Teh argues that in failing to place a validly sworn affidavit before the court at the ex parte stage, the SC effectively obtained the injunction order without tendering any evidence whatsoever to justify its case. [470] She contends that this defect goes to the root of the matter and cannot be remedied retrospectively, as it renders the entire ex parte proceedings improperly constituted and a nullity from the outset. [471] In essence, the Defendants collectively submit that the ex parte injunction order was fatally flawed and obtained without any valid evidence, as the SC improperly relied on an unsigned and unaffirmed affidavit in contravention of mandatory rules of procedure. They argue this defect cannot be cured retrospectively. [472] Having carefully considered the submissions of both parties and the authorities cited, I find that there is no basis to set aside the ex parte injunction order on the ground that the SC had relied on an unaffirmed affidavit in obtaining the order. [473] It is not disputed that the affidavit relied upon by the SC during the ex parte hearing on 8.5.2020 was not affirmed by the deponent at that juncture. However, I am satisfied that in the circumstances, it was an appropriate exercise of this court's discretion under Order 41 Rule 9(2) ROC to accept the unaffirmed affidavit for the limited purpose of the ex parte hearing. [474] The SC has provided an explaination why the ex parte injunction should not be set aside on this basis. The SC argues that the Injunction Application was filed urgently amidst the uncertainty and challenges arising from the COVID-19 pandemic, which had disrupted normal business operations. Cognizant of the procedural irregularity, the SC had filed a certificate of urgency and provided express undertakings, both in writing and orally before me during the ex parte hearing, that an affirmed affidavit would be filed promptly. [475] Specifically, in the cover letter to the ex parte application, the SC's solicitors had undertaken to file the affirmed affidavit. Subsequently, during the ex parte hearing itself, Counsel for the SC reiterated this undertaking and committed to filing the affirmed affidavit by the next working day. After noting that the affidavit was not affirmed, the court exercised its discretion to accept Counsel's undertaking and allowed the unaffirmed affidavit to be relied upon for the ex parte hearing in the interest of justice and in view of the urgency of the matter. [476] True to its word, the SC filed an affirmed affidavit with the same contents on 12.5.2020, the next working day after the ex parte hearing on 8.5.2020, thereby complying with the undertaking given to the court. I find that the SC had acted with due diligence to remedy the irregularity at the earliest opportunity. [477] I am fortified in this approach by the recent High Court decision in SS Precast Sdn Bhd v Serba Dinamik Group Bhd & Ors [supra], where Wong Kian Kheong J (as he then was) allowed unaffirmed affidavits to be relied upon based on counsel's undertaking to refile them, pursuant to the court's powers under Order 1A, Order 2 Rule 1(2) and Order 41 Rule 9(2) ROC. His Lordship emphasised that this was done in the wider interest of justice. [478] I am unable to agree with the Defendants' contention that the initial reliance on an unaffirmed affidavit rendered the ex parte proceedings a nullity from the outset. The procedural rules must be interpreted purposively to promote justice and efficiency, not to stifle proceedings through a rigid and inflexible adherence to form over substance. The overarching consideration is whether the justice of the case warranted the exercise of discretion to accept the unaffirmed affidavit provisionally, subject to the SC's undertaking to reaffirm - which was duly fulfilled. [479] The Defendants have not shown any prejudice suffered by them arising from the short delay in affirming the affidavit, which was in any event confined to the ex parte stage. By the time the inter partes hearing of the Injunction Application and setting aside application came around, there was a duly affirmed affidavit before the court. The contents of the affidavit remained unchanged from the version used at the ex parte hearing. [480] Therefore, I find that the SC had provided a satisfactory explanation for the exigency of the circumstances, duly undertook to rectify the irregularity, and complied with its undertaking promptly. This court had exercised its discretion judiciously to accept the unaffirmed affidavit provisionally in the wider interest of justice. No prejudice was occasioned to the Defendants, who had ample opportunity to scrutinise the affirmed affidavit and make full submissions at the inter partes stage. Conclusion [481] In conclusion, having carefully considered the materials before the court, submissions of the parties and the applicable legal principles, I am satisfied that the SC has made out a good arguable case for contravening Section 179 CMSA against the Defendants for perpetrating a fraudulent scheme in relation to the BPI Corporate Exercises. The evidence adduced by the SC demonstrates the Defendants' integral role in and knowledge of the elaborate scheme to siphon RM56 million from BPI through sham transactions and nominee companies. I find that this fraudulent conduct by the Defendants amounts to a breach of a relevant requirement under Section 360 CMSA, empowering this court to grant an injunction to preserve assets pending the outcome of the trial. Accordingly, Enclosure 4, being the SC’s application for a worldwide Mareva injunction to restrain the Defendants from disposing of assets up to RM169,223,500.00, is allowed with costs. [482] The Defendants have not shown any basis for setting aside the Ex Parte Injunction Order granted earlier on 8.5.2020. I am not convinced by the Defendants' arguments that the SC had failed to make full and frank disclosure, acted in bad faith or caused inordinate delay in commencing the action. I further find no merit in the contention that reliance on an unaffirmed affidavit during the ex parte hearing was fatal to the entire proceedings. In the circumstances, Enclosures 39 and 46, being the applications by the Madam Teh, and Ricky Wong and Wong SK Holdings respectively to set aside the ex parte injunction order, are dismissed with costs. [483] The court orders costs of RM60,000 to be paid by Ricky Wong and Wong SK Holdings to the SC in respect of Enclosures 4 and 46 and costs of RM60,000 to be paid by Madam Teh to the SC in respect of Enclosures 4 and 39. 8 April 2024 ATAN MUSTAFFA YUSSOF AHMAD Judge Kuala Lumpur High Court (Commercial Division) Counsel: For the Plaintiff: Dato' Lim Chee Wee, Kwan Will Sen, Joyce Lim Hwee Yin, Annabel Tan Sher May, Esther Hong Hui Jun, Cheryl Yee Jia Le (Pupil in Chambers), Nurul Rafeeza Hamdan and Keith Loo Kit Ming (Messrs Lim Chee Wee Partnership) For the 1st and 3rd Defendants: Robert Low, Ivanpal Singh Grewal, Karen Yong, Chong Lip Yi and Khong Mei Yan (Messrs. A.J. Ariffin, Yeo & Harpal) For the 2nd Defendant: Gopal Sreenevasan, Saw Wei Siang, Elizabeth Lau, Michelle Teoh and Mahdev Singh Sachdev (Pupil in Chambers) (Messrs. Nethi & Saw)

Catchwords

Civil procedure: Statutory powers, civil enforcement and market regulation by Securities Commission Malaysia (SC) under Capital Markets and Services Act 2007 (CMSA) - Section 179 CMSA - Manipulative devices - Fraudulent schemes - Deceptive acts - Section 360 CMSA - Freezing injunction - Relevant requirement - Interim injunction - Mareva Injunction - Preserving assets - Unjustified gains - Balance of convenience - Risk of dissipation of assets - Dishonest conduct - Lack of probity - Good arguable case - Prima facie evidence of fraud - Rights issue exercise - Private placement exercise - Employee Share Option Scheme - Nominee companies - Fictitious transactions - Siphoning of funds - Fraudulent knowledge and intent - Primary facts - Circumstantial evidence - Ex Parte Injunction - Duty of full and frank disclosure - Material non-disclosure - Unaffirmed affidavit - Delay in commencing suit - Statutory limitation period - Complexity of investigations - Non-cooperation of parties - Bad faith and abuse of process - Parallel proceedings with criminal action - Public Prosecutor's consent - Criminal and civil regimes

Suruhanjaya Sekuriti Malaysia v WONG SHEE KAI (WA-22NCC-171-05/2020)

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(nric No.: 811212-14-5957)

(nric No.: 500127-10-5696)

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