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2025 MarsdenLR 335
HIGH COURT MALAYA KUALA LUMPUR
SECURITIES COMMISSION MALAYSIA – Appellant
Versus
WONG SHEE KAI & ORS (ENCLS 262 462 539 607 692 & 694) – Respondent
[Civil Suit No: WA-22NCC-171-05/2020]
The absence of a penal notice in a permissive Variation Order does not preclude contempt proceedings, but a prima facie case of contempt must still be established.
Headnote:(A) Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 - Section 52 - Contempt of court - Application for leave to commence committal proceedings against the Securities Commission Malaysia for alleged interference with a Variation Order permitting share disposal - Court found no prima facie case of contempt established as the SC acted within its regulatory role and the Variation Order did not impose positive obligations on the SC. (Paras 1, 29, 47)
(B) Contempt of Court - Requirements for establishing contempt - Absence of penal notice in the Variation Order does not preclude contempt proceedings where the order is permissive in nature and does not impose specific obligations on the SC. (Paras 20, 28)
Facts of the case:
The application arose from the SC's alleged interference with a Variation Order allowing the disposal of shares to satisfy tax liabilities. The SC advised a financial institution regarding compliance with an existing seizure order, leading to claims of contempt. (Paras 1, 11)
Findings of Court:
The court found that the SC acted within its regulatory role and did not obstruct the Variation Order, dismissing the application for leave to commence committal proceedings. (Paras 47, 50)
Issues: The main issues were whether the SC's actions constituted contempt and whether the Variation Order imposed any positive obligations on the SC. (Paras 18, 40)
Ratio Decidendi: The court ruled that the SC's actions did not amount to contempt as the Variation Order was permissive and did not impose specific obligations on the SC, reaffirming the principle that contempt requires clear evidence of breach of express terms. (Paras 47, 48)
Result: Application for leave to commence committal proceedings dismissed with costs.
JUDGMENT
[1] Before the court is an application for leave to commence committal proceedings against the Securities Commission Malaysia ("SC"), arising from allegations that the SC interfered with and prevented compliance with a court order permitting the disposal of shares to satisfy tax liabilities. The application centres on whether the SC's actions in advising a financial institution about compliance with an existing seizure order amounts to contempt of court, particularly in circumstances where the SC maintains it was acting within its regulatory role and directing the applicants to seek appropriate variation from the relevant authority. At the heart of this matter lies the interplay between a court order varying an earlier Mareva injunction and an administrative seizure order issued under anti-money laundering legislation, raising important questions about the scope of contempt jurisdiction where competing legal obligations exist.
Background Facts
[2] The Plaintiff, the SC, filed the suit herein against the 1st Defendant, Wong Shee Kai ("D1"), the 2nd Defendant, Teh Sew Wan ("DZ) and the 3rd Defendant, Wong SK Holdings Sdn Bhd ("D3"). The case concerns three corporate exercises conducted by Bright Packaging Industry Berhad ("BP/") between 2013 and 2015: a Rights Issue Exercise completed on 23 January 2014 that raised RM47,613,390.00; a Private Placement Exercise completed on 30 July 2014 that raised RM7,791,000.00; and an Employee Share Option Scheme completed in two rounds on 24 February 2015 and 24 April 2015, raising RM9,300,000.00 and RM3,983,500.00 respectively.
[3] BPI is a public company listed on the Main Market of Bursa Malaysia Securities Berhad, engaged in manufacturing aluminium foil packaging materials and investment holding. D3 emerged as BPI's substantial shareholder on 10 October 2013 and currently holds a 32.94% stake, making it BPI's largest shareholder. D1 and his mother, D2, are the only directors and shareholders of D3.
[4] The present matter before the court (encl 692) concerns an application for leave to commence committal proceedings against the SC. This arises from events relating to a Variation Order dated 31 January 2023 (encl 607) ("Variation Order') which varied an earlier Mareva injunction dated 28 April 2022 (Enclosure 462). The Variation Order permitted D1 and D3 to withdraw RM5,037,159.41 or such other settlement sum for making payment to the Inland Revenue Board ("IRB") pursuant to a tax settlement.
[5] On 2 March 2023, a Consent Order was entered between D1 and the IRB in judicial review proceedings WA-25-305- 08/2021, requiring payment of the settlement sum by 25 December 2023. A first payment of RM1,995,400.00 was eventually made to the IRB following the disposal of 20,000,000 BPI shares around May 2024.
[6] For the balance payment, on 12 September 2024, D1 instructed RHB Investment Bank ("RHB Investment Bank") to dispose of and transfer 36,500,000 BPI shares to raise approximately RM3,041,759.42. However, RHB Investment Bank informed on 13 September 2024 that they could not process the transfer as they required clearance from the SC.
[7] The shares in question are held in D3's RHB Investment Bank Account No 240353, which is subject to a Seizure Order dated 5 August 2019 ("AMLA Seizure Order') under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 ("AMLA 2001"). On 8 May 2020, the Public Prosecutor initiated forfeiture proceedings (WA-44-98-05/2020) specifically targeting 5,792,000 BPI shares in this account.
[8] The Government of Malaysia has separately filed a civil recovery suit against D1 (BA-21NCvC-26-06/2024) for non¬payment of the outstanding tax sum, which includes a 10% late payment penalty. This resulted in a total claim amount of RM5,503,695.91, subject to interest and costs.
[9] The present application for committal proceedings centres on whether the SC's actions regarding the clearance for the share disposa
