An employer can be vicariously liable for an employee's criminal acts if performed in the course of their employment, requiring a higher standard of care from professionals like fund managers.

[1] This is my judgment in respect of the plaintiff's claim against the defendant (investment manager) for vicarious liability for the acts of the employee which resulted in loss to the plaintiff. The plaintiff's prayers read as follows:

"Wherefore, the plaintiff claims:

a. RM7,254,050.42 ("the said sum");

b. Interest on the said sum from the date of the misappropriation of the said sum to the date of judgment at such rate as may be determined;

c. An order that the defendant do account for all or any profits that it has obtained by reason of the breach of the agreement or the breach of his duty as trustee of the said sum;

d. General damages for breach of the terms of the Investment Management Agreement;

e. General damages for breach of duty as a trustee;

f. Interest at 8% per annum from the date of judgment until the judgment is satisfied in respect of all monies ordered to be paid by the defendant to the plaintiff;

g. Costs; and

h. Further and/or other relief as this Honourable Court deems fit and proper to grant."

[2] It must be noted that the agreed facts with the admissions therein show the material facts relating to quantum and liability are not in dispute save to the defence to the claim. The Statement of Agreed facts in encl 29 reads as follows:

"1. The plaintiff is a body corporate established under the Retirement Fund Act 2007.

2. The defendant is a professional fund management company registered in Malaysia.

3. The plaintiff and defendant entered into an Investment Management Agreement dated 27 November 2001 ("the agreement").

4. Pursuant to the agreement and subject to the terms and conditions thereunder, the defendant agreed to provide professional investment advice and management services over the investment portfolio owned by the plaintiff ("the plaintiff's fund").

5. Pursuant to the agreement and subject to the terms and conditions thereunder, Arab Malaysian Trustee Berhad ("AM Trustee Bhd") was appointed as the custodian for the plaintiff's fund.

6. The total amount of the plaintiff's fund was RM30,000,000.

7. On 29 August 2005, the defendant's Managing Director (Mr Ng Tiong Yee) made a police report, inter alia, as follows:

(1) that the defendant's employee, one Mr Ong Kheng Hoe ("the said employee") had committed a criminal offence;

(2) that the said employee had dealt with about RM28million belonging to two (2) clients ie, Malaysian Assurance Alliance Berhad ("MAA") and the plaintiff; and

(3) that the employee had confessed to the following:

a) that he had remitted the defendant's client's monies totalling RM28million (belonging to MAA and the plaintiff) to his own trading account at TA Futures;

(b) that he had forged the defendant's managing director's signature by cutting and pasting and using the defendant company's letterhead to transfer the funds from AM Trustee; and

(c) that he had lost the bulk of the money (around RM25million) in the futures market though OKACHI (crude oil) and TA Futures for palm oil trading.

8. By way of letter dated 30 August 2005, the defendant informed the plaintiff in writing, inter alia, as follows:

(1) that the defendant had made a police report on 29 August 2005 regarding misappropriation of its client's funds; and

(2) that the said misappropriation will have some adverse effect on the plaintiff's fund

9. By way of letter dated 6 September 2005, the defendant informed the plaintiff in writing, inter alia, as follows:

(1) that the defendant had discovered some financial misfeasance commited against the defendant;

(2) that sometime in mid-August, the defendant had discovered that deposits had been placed with Amanah Short Deposits without proper authorisation;

(3) that the total amount concerned is appro