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2025 MarsdenLR 5954
HIGH COURT MALAYA KUALA LUMPUR
BANK PEMBANGUNAN MALAYSIA BERHAD – Appellant
Versus
SIDQI AHMAD SAID AHMAD & ORS (ENCLS 2 44 106 179 714 730) – Respondent
[Suit No: WA-22NCC-264-06/2022]
Discovery orders can be granted in fraud cases against third parties to trace misappropriated funds, despite time gaps, thereby allowing for comprehensive examination of banking documentation.
Headnote:(A) Rules of Court 2012 - Order 24 r 7A - Bankers' Books (Evidence) Act 1949 - Discovery orders requested against banks to locate the RM400 million Loan misappropriated by defendants. Court found compelling evidence of fraudulent payments made to the said defendants. (Paras 13, 28, 114).
(B) Discovery Applications - Purpose and Scope - Discovery necessary for tracing funds and establishing nature of transactions, justified even if payments occurred after Loan disbursement. (Paras 22, 30, 94).
(C) Letters of Undertaking - No estoppel against filing discovery applications post-Mareva injunction refusal, maintaining the right to seek discovery independently. (Paras 34, 38, 114).
Facts of the case:
The Plaintiff sought to trace RM400 million Loan disbursed to Aries, with allegations of fraudulent payments to defendants including Roslina, BVS Trinity, and VCB Malaysia, despite their claims of legitimate business transactions. (Paras 1, 10).
Findings of Court:
Discovery of banking records permitted under relevant provisions due to sufficient evidence of fraudulent activities, aimed at understanding movement of loan funds. (Paras 112, 114).
Issues: Central inquiries included the legitimacy of fund flows received by defendants and the application of discovery principles in the context of alleged fraud. (Paras 3, 40, 104).
Ratio Decidendi: Court highlighted the need for comprehensive discovery to trace funds, affirming that payment documentation alone does not establish transaction legitimacy, particularly in complex fraud contexts. (Paras 55, 54, 26).
Result: Application for discovery granted; discovery orders issued compelling banks to disclose specified documentation. (Paras 115).
| Table of Content |
|---|
| 1. overview of financial transactions and context. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 12) |
| 2. arguments regarding the necessity of discovery orders. (Para 19 , 20) |
| 3. court analysis on the legitimacy of discovery based on fraud. (Para 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32) |
| 4. interpretation of procedural barriers based on previous agreements. (Para 34 , 35 , 36) |
| 5. evaluation of the probative value of findings. (Para 43 , 44 , 45 , 46) |
| 6. legitimacy of payments as per financial records versus evidence. (Para 51 , 52 , 56 , 57) |
| 7. identifying additional wrongdoers- rationale for discovery. (Para 59 , 60 , 62 , 68) |
| 8. discovery in complex financial fraud cases. (Para 71 , 72 , 73 , 74) |
| 9. defendants' separation from original transactions does not exempt them. (Para 104 , 105 , 106) |
| 10. conclusion supporting the discovery application. (Para 113 , 115) |
[1] This is an application by the Plaintiff, Bank Pembangunan Malaysia Berhad, for discovery orders against Malayan Banking Berhad ("Maybank") and Maybank Islamic Berhad ("Maybank Islamic") to obtain banking records of the 4th Defendant, Roslina Binti Ibrahim ('Roslina"), the 24th Defendant, BVS Trinity Sdn Bhd ("BVS Trinity') and the 25th Defendant, VCB Malaysia Bhd (" VCB Malaysia") in relation to alleged fraudulent disbursements of a RM400 million loan.
Background Facts
[2] On 23 May 2012, the Plaintiff issued a letter of offer to Aries Telecoms (M) Berhad ("Aries") for a term loan facility ("Loan") of RM400,000,000.00 ("Loan Sum"). The purpose of the Loan was to partly finance the development of a coastal network consisting of installing a fibre optic network around Peninsular Malaysia ('Project').
[3] On 28 June 2012, the Plaintiff and Aries entered into a Facility Agreement. The Loan was initially supported by the appointment of Huawei Technologies Co Ltd, China ('Huawei China") as the turnkey contractor to build, operate and maintain the network for the Project.
[4] The Loan Sum was disbursed to Aries in two tranches: the first tranche of RM200,000,000.00 on 2 July 2012 and the second tranche of RM200,000,000.00 on 15 November 2013. The disbursements were approved by the late Dato' Mohd Zafer Mohd Hashim ('Dato' Zafef), who was the President and Group Managing Director of the Plaintiff at the material time.
[5] On 10 July 2018, the Plaintiff issued a notice to Aries declaring default and demanding repayment of RM451,266,763.13. On 9 May 2019, summary judgment was entered against Aries for the sum demanded in a separate suit. Aries appealed to the Court of Appeal and obtained a stay of execution on 31 May 2019, subject to the Plaintiff's right to appoint a receiver and manager under the debenture.
[6] On 4 July 2019, the Plaintiff appointed Mr Lim Keng Peo of Deloitte Corporate Solutions Sdn Bhd as the receiver and manager ("R&M") over the assets and undertakings of Aries. On 24 September 2020, upon investigation by the R&M based on available documents and public information, certain irregularities were discovered in relation to the Loan.
[7] In January 2022, the Plaintiff discovered through the 13th Defendant, Ranjeet Singh Sidhu ("Ranjeet'), who was acting on behalf of Aries at the material time, that sometime before 4 July 2012, Ranjeet had made payment of approximately RM8,000,000.00 to Dato' Zafer through the 14th Defendant, Noorusa'adah Binti Othman ("Adah") as intermediary, for the successful disbursements of the Loan to Aries.
[8] On 15 June 2022, the Plaintiff filed this suit against the defendants in this action including Roslina (the 4th Defendant), the 7th until 9th Defendants, the 11th, 17th and 22nd Defendants, BVS Trinity (the 24th Defendant) and VCM Malaysia (the 25th Defendant) ("the Said Defendants'). The R&M found that there were payments made by Aries to Roslina, BVS Trinity and VCB Malaysia which were not supported by relevant information or documents.
[9] On 4 July 2022, the Plaintiff obtained an Ex P
