“The Securities Commission (SC) has filed a landmark suit on Sept 26 to compel FTEC Resources Bhd (FRB) managing director and shareholder Kenneth Vun @ Vun Yun Liun to restitute RM2.5mil to the company.”

Details:

·         The sum of R2.5mil represented part of proceeds raised by FRB in an initial public offering in 2003;

·         The commission’s investigation into the utilisation of the public issue proceeds had uncovered that Vun had utilised a portion of the proceeds for his own benefit and personal use;

·         Vun’s personal utilisation of the proceeds had not been reflected in the FRB Groups’ unaudited quarterly financial statements for the first quarter ending on 31 March, 2004 released to Bursa Malaysia Securities Bhd;

·         The utilisation of proceeds was not in compliance with the conditions set by the SC in the listing approval of FRB.

Incidentally, the aforesaid action against Kenneth Vun is one of the numerous civil enforcement action undertaken by the SC recently against directors of public listed companies for corporate governance misdeeds.

Other civil actions by the SC include:

·         the disgorgement of companies’ ill-gotten gains and the freezing of assets to prevent them from being diverted. One such notable case is the Ayer Molek Rubber Company Berhad, where the SC had obtained an injunction to safeguard the RM20mil of the company’s monies to prevent the company and its solicitors from disposing or dealing with the said monies representing the company’s sale proceeds of several pieces of land in 2006 and 2007.

·         More recently, in the Swisscash Internet Investment scam where the SC had obtained a worldwide Mareva injunction to prevent the disposal of assets by the defendants and the SC had also secured a court order to direct one of the defendants, Amir Hassan, to transfer RM35mil of Swisscash monies held in bank accounts overseas back to Malaysia.