AG shall charge Chong Ket Pen for fraud, defraud and abuse of court process? Sued RM368 million cheating case analysis.

Facts:

Chong Ket Pen had approached Global Capital Ltd (GCL), deceived and induced GCL by signing a personal guarantee agreement dated 3 November 2012 to engage GCL to find investors Tey Por Yee and Ooi Kock Aun to take over Protasco largest controlling shares in order for Tey and Ooi to maintain Chong Ket Pen’s managing director power.

In a desperate move to induce investors, Chong Ket Pen further deceived GCL to find oil assets in order to convince Tey and Ooi to take over Protasco in view of guaranteed oil and gas prospects. Chong Ket Pen further guaranteed and deceived PTASU to sell the asset to Protasco to strengthen his push to induce investors to complete the deal.

When Tey Por Yee taken over 27.11% Protasco shares and became the largest shareholder, Chong Ket Pen at that time was a 15.5% minority. By that time, Chong Ket Pen already got what he wanted, which is his retainer as managing director which controls Protasco. This fact becomes the main motive and objective behind a series of fraud manufactured by Chong Ket Pen trying to cover up the facts to push away Tey and Ooi.

Read more about the judgement report: https://judgement.law.blog/2018/10/29/globalcapital-sue-chongketpen-368million/

Major shareholder Global Capital of Indonesia sues Protasco managing director, claims RM368m – 26 Oct 2018, The Sun Daily

Citation: https://www.thesundaily.my/archive/major-shareholder-global-capital-indonesia-sues-protasco-managing-director-claims-rm-MUARCH586660

PETALING JAYA: The feud at Protasco Bhd has taken a new twist as substantial shareholder Global Capital Ltd (GCL) has initiated a civil suit against the group’s executive vice-chairman and managing director Datuk Seri Chong Ket Pen for alleged abuse of power.

The suit revolves round the entry of GCL into Protasco in 2012 after the company promised a planned oil and gas foray and a profit guarantee for the next four years. In 2012, Protasco announced that it was buying a 63% stake in PT Anglo Slavic Indonesia (PT ASI) for US$22 million (RM92 million). The deal, however, did not materialise due to non-fulfilment of conditions.

In a statement of claim filed at the High Court in Kuala Lumpur last Friday sighted by SunBiz, the Indonesia-based company is claiming RM368 million from Chong, including loss of investment and future profits for the stake in Protasco; loss of margin to finance the acquisition of shares up to RM75 million; liability of US$55 million (RM228.5 million) to PT Anglo Slavic Utama (PT ASU), as guarantor for Chong pursuant to the investment guarantee agreement; as well as RM65 million as payment for the profit guarantee under the investment guarantee agreement.

To recap, GCL acquired a 27.11% stake in Protasco in November 2012 through its representatives for RM96.52 million or a 33% premium over the market price. The “pricey” deal was done on the assurance of Protasco’s planned venture into the oil and gas sector.

Tey Por Yee, who emerged as the largest shareholder of Protasco, was appointed to the board together with three other GCL representatives – Ooi Kok Aun, Tan Yee Boon, Mohamad Farid Mohd Yusof.

“The acquisition of the shares at a huge premium was a risk for the plaintiff, given the performance and financial situation of Protasco. Nevertheless that risk was undertaken, given that the plaintiff was under the impression that their investment was protected by the assurance given by the defendant, inter alia his guarantees and obligations under the investment guarantee agreement,” the suit said.

GCL alleged that Chong failed to ensure that Protasco was profitable, with a profit before tax of RM30 million and RM35 million in the third and fourth year under the investment guarantee agreement. A total of RM110 million profit was guaranteed over the four years.

Protasco’s earnings have been falling since 2015. For the six months to June 30, 2018, it swung into the red with a net loss of RM3.1 million against a net profit of RM11.2 million in the same period last year, dragged by lower contribution in the property development, education and construction segments.

Tey and Ooi first came under the limelight in 2014 on allegations of criminal breach of trust due to the non-disclosure of interest in a transaction involving RM85 million. However, they were granted a discharge not amounting to an acquittal by the sessions court in September 2017. They were in the news again when Protasco demanded the Attorney-General’s Chambers reopen cases against the two.

Tey ceased to be a substantial shareholder of Protasco in March 2016.

In the suit, GCL alleged that Chong entered into business transactions and decisions on operation, remuneration, payments of dividends and salaries for his own benefit at the expense and the best interests of the company.

According to Protasco’s latest annual report, Chong raked in RM2.41 million remuneration in 2017. He has been a Protasco director since May 2001 and was appointed as executive vice-chairman and managing director in February 2013. He has a 16.91% direct and a 10.31% indirect stake in the company.

Global Capital Ltd vs Chong Ket Pen (director Protasco Bhd) RM368 million breach of contract

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR

IN THE FEDERAL TERRITORY, MALAYSIA

CIVIL SUIT NO.

BETWEEN

GLOBAL CAPITAL LIMITED

(Company No.: 2115952) … PLAINTIFF

AND

DATO’ SRI CHONG KET PEN

(NRICNo. : 540714-04-5081) … DEFENDANT

STATEMENT OF CLAIM

PARTIES

The Plaintiff is a company incorporated in the British Virgin Islands with an address at The East Office Tower, 30^thFloor, Unit 3, Jl. Lingkar Mega Kuningan Kav E3.2, No. 1, Jakarta Selatan 12950 Indonesia which through its representative(s) had invested and acquired 27.11% equity in Protasco Bhd.

The Defendant is an individual with an address at No. 2, Jalan Bukit Seputeh, Seputeh Heights, 58100 Kuala Lumpur. The Defendant is and was at all material times a substantial shareholder of and holds executive directorship position in Protasco Bhd, a public listed company incorporated in Malaysia with its registered office at No. 802, 8^thFloor, Block C, Kelana Square 17, Jalan SS7/26, 47301 Petaling Jaya, Selangor Darul Ehsan (“hereinafter referred to as Protasco”).

MATERIAL FACTS THAT LED TO THE GENESIS OF THE 3RD OF NOVEMBER 2012 AGREEMENT

Prior to November 2012, the Defendant was a mere Director of Protasco, without any controlling or substantial interest in the latter, with only 15% equity in the same. Though being entrusted with the daily operations of Protasco, the position of the Defendant was not secured and depended heavily on the support of the then largest shareholders of Protasco, inter alia Dream Cruiser Sdn Bhd and FNQ Advanced Materials Sdn Bhd (hereinafter referred to as the 2011 Controlling Shareholders).

Defendant was entrusted with the daily operations of Protasco due to his past experience and employment as Managing Director of Kumpulan Perunding Ikram Sdn Bhd (‘Kumpulan Ikram’), a research, development and training centre of the Malaysian Public Works Department until it’s privatisation in 1997, and now a wholly owned subsidiary of Protasco.

However, this support began to wean, and the Defendant feared that he would be marginalised and thereafter sidelined from running the affairs of Protasco. This concern was legitimate given the following facts surrounding the financial position and reputation of Protasco under the management of the Defendant at that point of time:

a) The turnover and profits of Protasco were on a continuous decline with no visible improvement or substantial development in its core business activities, inter alia construction, engineering and trading services;

b) Further, the trading of Protasco’s shares on the stock market of Bursa Malaysia were not treated with excitement and languishing near its par value, thus reflecting the lack of interest of investors in Protasco.

To resuscitate and revitalise Protasco, the 2011 Controlling Shareholders mooted their intention to restructure Protasco, inter alia by injecting assets and/or new businesses into the said company. This intention of the 2011 Controlling Shareholders is reflected in the following change in the management of Protasco:

a) Re designation of one Dato’ Mohd Ibrahim bin Mohd Nor from Non-Independent Director to Executive Director and Deputy Chairman of the said company on 13.6.2012;

b) Appointment of one See Ah Sing as Executive Director of the said company on 25.6.2012, replacing Defendant, and;

c) Re designation of the Defendant from the position of Executive Director to a position of a mere director in the said company on 6.2012.

With the change in the management of Protasco, the 2011 Controlling Shareholders had the required numbers on the Board of the said company to dictate the new business direction and management of the same.

The only option for the Defendant to elevate and strengthen his position in Protasco was to buy out the equity interest of the 2011 Controlling Shareholders in Protasco and thereafter remove those directors appointed by the latter.

RELATIONSHIP OF THE PARTIES

This fear of losing control prompted the Defendant in securing the services of an investment banker based in Singapore, known as Andy Yong, primarily to scout for investors willing to buy-out the interest of the 2011 Controlling Shareholders in Protasco.

Through Andy Yong, the Defendant was then introduced to the Plaintiff’s representative sometime in October 2012. A proposal was then made by the Defendant to entice the Plaintiff to invest in Protasco, inter alia by acquiring the interest of the 2011 Controlling Shareholders. However, this proposal was met with scepticism, given that the decline in the business of Protasco and business model of the latter was not within the scope of interest of the Plaintiff. To quell this lack of interest, the Defendant agreed to diversify the business of Protasco into oil and gas to enable the said company to be more attractive to the investors, provided that the Plaintiff is able to source for projects in oil and gas.

The desperation of the Defendant to maintain control over Protasco through the Plaintiff’s acquisition of the said controlling interest became obvious. This desperation is reflected through an email correspondence between the Defendant and his son, one Kenny Chong Ther Nen (“Kenny Chong”) with the Plaintiff, whom at all material time was the Managing Director of the Property & Infrastructure Division as well as the Head of Overseas and Special Projects of Protasco.

Execution of the 3rd of November 2012 Agreement

To give assurance that the Plaintiff’s investment in Protasco is secured, and the risk in acquiring the controlling interest from the 2011 Controlling Shareholders is insured, an agreement was executed between the Defendant and the Plaintiff on 3rd November 2012. The scheme contrived by the Defendant in this Agreement is akin to an Investment Guarantee Agreement. The Plaintiff will at trial refer to the said Agreement for its true meaning and effect.

The recitals to the Investment Guarantee Agreement outlining the intention of the parties is reproduced as follows:-

(a) the Defendant was stated to be the beneficial owner of 41,666,667 ordinary shares in Protasco;

(b) the Plaintiff via its affiliates / nominees has been given the rights to develop and produce oil and gas in Kuala Simpang Timur, Aceh, Indonesia (“Project”);

(c) the Defendant and the Plaintiff intend to jointly develop the Project via Protasco which shall also enter into a master agreement with the Plaintiff for such a purpose; and

(d) in furtherance of the said joint development of the Project, the Defendant agreed to enter into the said Investment Guarantee Agreement in consideration for the proposed offer by the Plaintiff to acquire up to 80,429,515 ordinary shares (“Existing Protasco Shares”) representing 27.11% of the equity in Protasco from 2 parties identified as Dream Cruiser Sdn Bhd and FNQ Advanced Materials Sdn Bhd.

In consideration for the Plaintiff acquiring the interest from the 2011 Controlling Shareholders, the Defendant agreed to as follows, vis a vis the salient terms of the Investment Guarantee Agreement:-

(a) Under Clause 1.1(a)(iv), subject to satisfactory valuation and due diligence, Protasco shall purchase 75% equity interest in the Project at a fair value to be assessed by independent professional valuer / party agreeable to the Plaintiff whose initial indicating value of the said interest being USD 55,000,000.00;

(b) Under Clause 1.1(d), after the signing of the Sale & Purchase Agreement between the Plaintiff or its nominee and the vendors in respect of the Existing Protasco Shares, the Defendant and the Plaintiff shall each nominate 1 mutually acceptable director to replace the 2 outgoing directors. Upon full settlement by the Plaintiff or its nominee of the Existing Protasco Shares, the 7 member board of directors shall have 3 members nominated by the Defendant, 3 members nominated by the Plaintiff and 1 mutually acceptable independent director;

(c) Under Clause 1.1(e), the daily operations of the existing business shall be run by the Defendant and the daily operations of the new business shall be run by the Plaintiff. The Management Executive Committee shall be equally represented by the Defendant and the Plaintiff. An Independent Advisor(s) can be engaged to help assist to resolve potential disputes. Important decisions shall be decided by the Board of Directors.

(d) Under Clause 3.1(b), for the Defendant to immediately start the process of procuring the appointment of one nominee or representative of the Plaintiff on Protasco’s Board of Directors, after the signing of the Sale and Purchase Agreement for EXISTING PROTASCO SHARES; and two nominees or representatives of the Plaintiff on Protasco ’s Board of Directors after the full settlement by the Plaintiff to the 2011 Controlling Shareholders for EXISTING PROTASCO SHARES;

(e) Under Clause 3.1(c), obtain the Plaintiff’s written agreement on any significant business decisions including, but not limited to, acquisition or disposal of significant assets, dividend payout, obtaining loans, and granting new corporate guarantees that are not mentioned in the Sale and Purchase Agreement between the Plaintiff to the 2011 Controlling Shareholders; failing which, the Defendant shall compensate in full the losses of the Plaintiff;

(f) Under Clause 3.1(f), the Defendant not to dilute the rights of the Plaintiff during the corporate exercise process;

(g) Under Clause 3.1(g), the Defendant run the existing businesses with the best endeavour and have equal rights on business decisions; and

(h) Under Clause 3.1(h), the Defendant provided the following profit guarantees to the Plaintiff on existing businesses of Protasco:

chongketpen-personal-guarantee-profit-protasco-5yr

with an option of early release of the guarantee when the total of RM110 million profit before taxation being met in less than 4 years.

Execution of the 26th November 2012 Share Sale Agreement

Predicated on the guarantees given by the Defendant under the Investment Guarantee Agreement as well as the Plaintiff’s obligations therein, the Plaintiff agreed to initiate talks and negotiations with the 2011 Controlling Shareholders to acquire the latter’s interest in Protasco.

However throughout the negotiations, the Plaintiff was represented by Messrs Manjit Singh Sachdev, Mohammad Radzi & Partners. The appointment of the said legal firm was made pursuant to the insistence and request of the Defendant, to ensure among others, the protection of the Defendant’s interest, inter alia a speedy and immediate completion of the negotiation and execution of a Share Sale Agreement to acquire the said controlling interest.

The entire negotiations and communications with regard to the said acquisition was wholly facilitated by the Defendant as the Plaintiff were not privy to the identity of the 2011 Controlling Shareholders and/or were in contact with the same.

The 2011 Controlling Shareholders agreed in principal to relinquish their interest in Protasco, provided that the Plaintiff agrees to acquire the Existing Protasco Shares at a huge premium of RM 1.20 per share. This proposed price is 33.33% higher than the prevailing market price for the shares trading at that point of time.

The acquisition of the shares at a huge premium was a risk for the Plaintiff, given the performance and financial situation of Protasco. Nevertheless that risk was undertaken, given that the Plaintiff was under the impression that their investment was protected by the assurance given by the Defendant, inter alia his guarantees and obligations under the Investment Guarantee Agreement.

To further expedite the execution of the Share Sale Agreement, the Defendant agreed to bear the cost of legal fees for the drafting and execution of the said agreement with the Plaintiff, and that the 2011 Controlling Shareholders being the vendor of the shares were excluded from bearing any legal cost in the said transaction.

The acquisition of the 2011 Controlling Shareholders’ interest in Protasco was executed on 26.11.2012 through a Share Sale Agreement via the Plaintiff’s nominee, Kingdom Seekers Ventures Sdn. Bhd.. The interest was acquired for the price of RM 96,515,418.00, as consideration for 80,429,515 unit of shares, equivalent to 27.11% equity in Protasco .

The salient terms of the Share Sale Agreement dated 26.11.2012 are as follows:

a) Under Clause 2.1, the Plaintiff and the 2011 Controlling Shareholders (hereinafter and specifically for this part of the statement of claim are referred to collectively as “parties”) agreed that the price for one unit of shares shall be fixed at the rate of RM 1.20;

b) Under Clause 2.1(a), the parties agreed that the Plaintiff shall acquire 58,805,373 units of shares from Dream Cruiser Sdn Bhd for RM 70,566,447.60;

c) Under Clause 2.1(b), the parties agreed that the Plaintiff shall acquire 21,624,142 units of shares from FNQ Advanced Materials Sdn Bhd for RM25,948,970.40;

d) Under Clause 2.2 (c), the directors of Protasco, who are nominees of the 2011 Controlling Shareholders are required to resign with immediate effect and relinquish their position in Protasco.

The Plaintiff will at trial refer to the said Agreement for its true meaning and effect.

Taking into account the timing and the speed these agreements were executed, inter alia within a month, shows desperation and urgency on the part of the Defendant to ensure his control over Protasco is maintained.

The execution of the Share Sale Agreement resulted in an immediate change in the management, financial position and the market perception of Protasco, in particular:

a) The nominee directors of the 2011 Controlling Shareholders, namely See Ah Sing, Leong Kam Wing, Dato’ Ir Syed Sis bin A. Rahman and Dato’ Mohd Ibrahim bin Mohd Noor resigned and relinquished their position in Protasco on 28.11.2012;

b) The elevation of the Defendant from the position of Director to Executive Deputy Chairman and Group Managing Director in Protasco on or about 20.2.2013;

c) The trading of Protasco’s shares started experiencing a bullish trend rising from a low of approximately RM0.90 in October 2012 (prior to the Investment GuaranteeAgreement) to more than double to approximately RM2.13 in June 2014. This had the effect of doubling the net-worth of the Defendant.

At the outset, the execution of the Share Sale Agreement by the Plaintiff resulted in the intended effect and/or outcome envisaged in the Investment Guarantee Agreement.

Renegation of the Defendant’s Obligations under the Investment Guarantee Agreement

While the Plaintiff had fulfilled its obligations under the Investment Guarantee Agreement, in particular the following obligations:

a) Acquiring the interest of the 2011 Controlling Shareholders, as specifically pleaded at paragraph 22above;

b) Allow and support the elevation of the Defendant from the position of Executive Director to Executive Vice Chairman and Group Managing Director in Protasco on or about 20.2.2013, as specifically pleaded at paragraph 24above;

c) Identifying for the Defendant and Protasco an oil and gas project, inter alia under the concession of PT Anglo Slavic Indonesia (“PT ASI”) via PT Haseba, in Kuala Simpang Timur, Aceh, Indonesia (“KST Oil Field”). Which Protasco had subsequently acquired interest in, via a Share Sale Agreement on 28.12.2012 (“1st Oil and Gas Agreement”) with PT Anglo Slavic Utama (“PT ASU”), the then parent company of PT ASI by making a payment of RM50 million as deposit. Further upon query by Bursa Securities Bhd on the said payment of RM50 million which is approximately 30% of the purchase consideration for the 1st Oil and Gas Agreement, the auditor of Protasco , Messrs Crowe Howarth confirmed that:

the KST oil field is genuine;

the existence of KST oil field with proven oil and gas reserve and concurs the recoverability of the deposit;

all information obtained were consistent and there were no exceptional issues raised from the audit; and

the Indonesian Central Depository’s confirmation of “Blocked Shares” to secure the said deposit were barred from trading unless otherwise instructed by the subject company and Protasco.

the Defendant had refused, failed and/or neglected to comply with his obligation under the same, (“hereinafter referred to as the act of renegation”).

The renegation of these obligations under the Investment Guarantee Agreement by the Defendant either directly or indirectly are as particularised bellow:

Particulars of Breach

a) Contrary to Clauses 1.1(d), (e) and 3.1(b) of the Investment Guarantee Agreement, the nominee directors of the Plaintiff,Ooi Kock Aun, Tan Yee Boon, Mohamad Farid Bin Mohd Yusof and Tey Por Yee were appointed only as Non-Executive Directors of Protasco, when at that material time being the sole executive and managing director director of Protasco, the Defendant had the necessary powers to procure those appointments on the tenure as executive directors of Protasco;

b) The non-compliance in ensuring the appointments above had the effect of removing, preventing and alienating the Plaintiff from having any joint-control over the operation and business decision making process of Protasco, with respect to its ongoing businesses as well as the new business in oil and gas, as envisaged under the breached Clauses 1.1(e) and 3.1(b),(c),(g) and (f) of the Investment Guarantee Agreement;

c) Non-compliance of Clause 1.1(a)(iv) based on the following series of events:

Even without a specific valuation and due diligence on the equity of PT ASI, which the Defendant is supposed to ensure and provide under the Investment Guarantee Agreement, the independent valuers, namely RISC Operations Pty Ltd, KPMG and Grant Thornton had all came back with a valuation to support the existence of the oil and gas project in the KST Oil Field.

However despite this valuation, the Defendant had caused and/or prevented Protasco from acquiring 76% equity in PT ASI for USD 55 million, instead acquiring only 63% of the latter’s equity for USD 22 million. This had resulted in an Amended and Restated Agreement between PT ASU and Protasco on 29.1.2014 (“2nd Oil and Gas Agreement”).

The acquisition of the said equity for USD 22 million was not substantiated by the valuation reportsand was engineered solely by the Defendant to avoid the need to obtain shareholders approval of Protasco as the said acquisition would be below the 25% threshold provided for under the Bursa Malaysia Listing Requirements.

d) The Defendant failed to ensure that Protasco is profitable in particular, making a profit (before taxation) of RM30 million for Year 3 and a profit (before taxation) of RM 35 million for Year 4, as required in Clause 3.1(h) of the Investment Guarantee Agreement.

Conduct of the Defendant to consolidate power and remove the Plaintiff from having any control in Protasco

Apart from the series of events outlined in paragraph 27above, the Defendant consolidated his control over Protasco by increasing his equity in the latter.

This was achieved by taking advantage of the Investment Guarantee Agreement and the Share Sale Agreement which made it possible for the Defendant to acquire the balance of 38,520,150 shares in Protasco(or approximately 13% shares) from the 2011 Controlling Shareholders. This resulted in the Defendant (for the first time) being in control of 83,710,292 shares or 27.58% of Protasco. Without the investment of the Plaintiff, the Defendant would not have been able to acquire the said shares. He would be merely holding 45,190,140 shares or 15.23% of the said company.

Upon consolidating his power and control over the management and operation of Protasco, with him as the sole Executive and Managing Director with substantial controlling interest in the said company, the Defendant set into motion and/or caused the following series of events intended either directly or indirectly to remove any influence and/or control the Plaintiff has either directly or through its representatives in Protasco:

a) The frustration and/or wrongful termination of the 2nd Oil and Gas Agreement between Protasco and PT ASU on 4.8.2014, while at that material time having control of PT ASI via Protasco;

b) The false accusation and false police report, against the nominee directors of the Plaintiff, namely, Ooi Kock Aun and Tey Por Yee, inter alia for allegedly making a false declaration to Bursa Malaysia that they have no interest and/or are not shareholders and directors of PT ASU. A false accusation that caused the arrest, freezing, seizure of assets and shares, and charging of those nominee directors under the Penal Code, whom were later discharged upon withdrawal of the charges by the Public Prosecutor;

c) Forming of a purported investigation committee to investigate the oil and gas agreements based on the allegations under paragraph 30(b) above;

d) Causing and engineering the removal of the said nominee directors of the Plaintiff via an Extraordinary General Meeting (EGM) on 26.11.2014, based on the allegations under paragraph 30(b) above;

e) Causing a suit against the said nominee directors of the Plaintiff and PT ASU for fraud and breach of the oil and gas agreements via suit No. 22NCC-362-09/2014.

Apart from removing the Plaintiff and/or its nominees from Protasco, it also served the purpose of deflecting the attention and scrutiny of Bursa Malaysia and Securities Commission Malaysia on the management of Protasco under the stewardship of the Defendant.

With the removal of the Plaintiff from having any control and/or influence in Protasco, the Defendant proceeded to use his position and control in the said company to dictate and enter into business transactions and decisions on matters of operation, remuneration, payments of dividends and salaries for his own benefit and enrichment while at the expense and best interest of the said company. The Plaintiff will at trial refer to the relevant Annual Reports of Protasco to support this claim.

Damages and losses suffered by the Plaintiff

As a consequence of the breaches by the Defendant as pleaded at paragraphs 27(a), (b), (c) and (d) above, and the misconduct by the Defendant through Protasco as pleaded at paragraphs 30(a), (b), (c), (d) and (e), the Plaintiff has suffered irreparable loss and damage to their investment, reputation, credibility and business.

The full particulars of the losses and damages suffered by the Plaintiff will be disclosed at the trial of this suit, and brief particulars are set out hereunder as follows:

Particulars

a) Loss of investmentand future profits for acquiring80,429,515 unit of shares, equivalent to 27.11% equity in Protasco;

b) Loss of margin to finance the acquisition of shares up to RM75million;

c) Liability of USD 55 million to PT ASU, as guarantor for the Defendant pursuantto the Investment Guarantee Agreement;

d) Legal fees incurred by the Plaintiff through its representatives in relation to matters pleaded under paragraph 30(b) above.

35. Thus the losses and damages above have been incurred either directly and/or indirectlyas a result of the said breaches and misconduct of the Defendantwhich the Plaintiff will claim as general damages.

36. Therefore the Plaintiff further claims for the following reliefs:

a) A declaration that the Defendant has acted in breach of the Investment Guarantee Agreement;

b) A sum of RM 65,000,000.00 as payment for the Profit Guarantee under Clause 3.1(h) of the Investment Guarantee Agreement;;

c) A declaration that the Defendant is liablefor USD 55,000,000.00, a figure that the Plaintiff has guaranteed to PT ASU as a result of the Defendant’s obligation under Clause 1.1(a)(iv) of the Investment Guarantee Agreement;

d) An account and inquiry of all the gains and profits made by the Defendant pursuant to the Investment Guarantee Agreement;

e) Aggravated and / or exemplary damages, to be assessed against the Defendant in respect of the breaches of the Investment Guarantee Agreement; and

f) General Damages;

g) Costs; and

h) Any further and/or reliefs or order as this Honourable Court deems just and proper.

Global Capital Ltd vs Chong Ket Pen | Major shareholder Global Capital of Indonesia sues Protasco managing director, claims RM368m

citation: https://www.thesundaily.my/archive/major-shareholder-global-capital-indonesia-sues-protasco-managing-director-claims-rm-MUARCH586660

Tey Por Yee, who emerged as the largest shareholder of Protasco, was appointed to the board together with three other GCL representatives – Ooi Kok Aun, Tan Yee Boon, Mohamad Farid Mohd Yusof.

Tey ceased to be a substantial shareholder of Protasco in March 2016.

Counter Claim: Protasco Bhd, Tey Por Yee & Ooi Kock Aun v Chong Ket Pen | Original Claim: Protasco Bhd (Chong Ket Pen) v Tey Por Yee & Ooi Kock Aun – case analysis (15 Jul 2018)

Citation: Rayuan Sivil Nos. W-02(IM)(NCC)-187-01/2017 & 188-01/2017; Date of Judgment: 29 January 2018; Name of Court: Court of Appeal; Source: Federal Court Registry

Assignment:

Find the criminal elements in this CRIMINAL case in CIVIL disguise, where the PLAINTIFF is the criminal suspect.

Facts:

This is a civil case which derived from criminal activities, including the approach of Chong Ket Pen (the alter ego behind plaintiff Protasco Bhd) to prey, deceive, and induce defendant Tey Por Yee and Ooi Kock Aun to enter a deal and later push them away and took for himself what belongs to them.

CKP deceived the plaintiff by signing a 3 November 2012 personal guarantee agreement with the broker Global Capital and engaged Global Capital to find investors, as well as oil assets as an incentive to cook up a deal in order to retain CKP position as managing director of Protasco once investor took over Protasco largest shareholding. Out of desperate, CKP further convinces Tey and Ooi into the purchase of Protasco largest shareholding, despite Global Capital cannot find investors given a tight deadline of 31 December 2012, as per told by CKP his career in Protasco is due by then.

The entire deal from the start until the filling of this lawsuit is a setup by CKP. Evidence shown that from the statement of claim of the plaintiff which is defamation and factually wrong, the basis and evidence being fabricated to fit the lawsuit, the process of the Business Contracts which was planned and meant to fail right from SPA2 onwards in order to put a blame to the Protasco largest shareholder Tey and Ooi, all are fraudulent set up to facilitate the mastermind CKP.

In short, CKP uses Tey and Ooi to get what CKP wanted, and later push them away when CKP has gotten the control of Protasco. Despite CKP calls them names to paint them evil, the facts are straightforward.

The discussion is how fraudulent misrepresented information and plain allegation and lies could induce and deceive the defendant’s lawyers and the court in order to facilitate the mastermind CKP to get and keep his ill-gotten power and riches. CKP’s set up to keep Tey and Ooi busy with lawsuits, while CKP himself busy racking money enriching himself, as proven from Bursa Malaysia Protasco’s annual report, is a classic criminal cheating case.

How would the defendants surface the criminal element of CKP’s fraudulent misrepresentation, and counterclaim what belongs to them in the process?

This is a criminal case in civil disguise. Look from criminal perspectives to finish the assignment.

Key Suspects:

The case is surrounding Chong Ket Pen the mastermind, and his alter ego Ho Chun Fuat, Chong Ket Pen’s son Kenny Chong Ther Nen, Protasco Bhd chairman and directors Hadenan bin Abdul Jalil, Tan Heng Kui, Lim Yew Ting, Tan Yee Boon, and defendant PTASU’s former staff Tjoe Yudhis Guthrie, in their disguise behind Protasco Bhd as the PLAINTIFF, sustained their ill-gotten power and illegal monetary riches by taking advantage of their position in Protasco Bhd.

Breaches and Sections:

How would the subjects Ooi Kock Aun and Tey Por Yee reveal the facts and smoke the conspiracy mastermind Chong Ket Pen to the front and surface his wrongdoing would be a test to Malaysia legal system and understanding of corporate law. How the defendants turn around the prolonged unjust by revealing criminal elements of CKP is a technical test to our legal system. Relevant breaches under the Penal Code on the subject Chong Ket Pen and his alter ego, would count S8 Akta Rahsia Rasmi, s119, s203A Kanun Keseksaan, Seksyen 420, 468, 182, 192, 196, 199, 200, among others.

DALAM MAHKAMAH RAYUAN MALAYSIA DI PUTRAJAYA

(BIDANGKUASA RAYUAN)

RAYUAN SIVIL NO. W-02(IM)(NCC)-187-01/2017

ANTARA

PROTASCO BHD (No. Syarikat: 548078-H) … PERAYU

DAN

TEY POR YEE (No. K/P: 760202-14-5147) … RESPONDEN

DI DENGAR BERSAMA

DALAM MAHKAMAH RAYUAN MALAYSIA DI PUTRAJAYA

(BIDANGKUASA RAYUAN)

RAYUAN SIVIL NO. W-02(IM)(NCC)-188-01/2017

ANTARA

PROTASCO BHD (No. Syarikat: 548078-H) … PERAYU

DAN

OOI KOCK AUN (No. K/P: 670307-07-5561) … RESPONDEN

[Dalam Mahkamah Tinggi Malaya di Kuala Lumpur

Guman No.: 22NCC-362-09/2014

Antara

PROTASCO BHD (No. Syarikat: 548078-H) … PERAYU

Dan

1. PT Anglo Slavic Utama (No. Pendaftaran Syarikat: 09.03.1.46.80564)

2. Tey Por Yee (No. K/P: 760202-14-5147)

3. Ooi Kock Aun (No. K/P: 670307-07-5561) … Defendan-Defendan]

QUORUM: NALLINI PATHMANATHAN, JCA; YAACOB MD SAM, JCA; ZABARIAH MOHD YUSOF, JCA

Some key notes in the defence which did not surface all the evidence in totality :

[25] The Defence of Tey and Ooi states in summary that:

(a) The true picture is that the Executive Vice Chairman and Group Managing Director of Protasco who is also the largest shareholder, one Dato’ Sri Chong Ket Pen (‘Dato’ Chong’) was the one who entered into an investor agreement with Global Capital Limited in November 2012. It is stated that it was Dato’ Chong who invited Tey and Ooi as major investors in Protasco.

Comment:

Materially incorrect. Either court read wrongly or defense lawyer explained wrongly. CKP was not the largest shareholder when he enters an agreement with GCL. How did summary judgment come out with such positioning? It is because of repeated copy-and-paste of “false, fraudulent, misleading” information that tried to paint the wrong impression on judges mind, CKP’s criminal method is not sustainable when truth prevails.

(b) The facts relating to Global Capital Limited through its affiliates and nominees procuring rights to develop and produce oil and gas in Aceh are then set out. Dato’ Chong and Global Capital intended to jointly develop the project and a master agreement was supposed to be entered into. In consideration of this, Dato’ Chong, it is contended, agreed to enter into the agreement for the acquisition of 27.11% of Protasco’s equity from other shareholders. To this end Global Capital acquired that percentage of shareholding for a total consideration of RM96 million vide the agreement of 26 November 2012. This sum was fully paid for.

Comment:

Looking into the facts, CKP had lost his power on 26 June 2012 (note1) when few new directors including executive directors were appointed by the “largest shareholders” to take over the power of CKP.

Tey and Ooi were told by CKP he has a deadline of 31 Dec 2012 to find a buyer to take over Protasco or CKP would be out, hence CKP desperately seeking GCL’s help to find investors to take over Protasco’s 27.11% largest shareholding block in order to secure and sustain his managing director position. CKP seek investors to give him “join control, the board seat, and equal decision making” as an incentive to induce the investor to invest. CKP further deceived investor by “engaging GCL” to procuring rights to develop and produce oil and gas in Aceh, which at the material time oil and gas sector is a bullish industry that investor might benefit from share price appreciation.

The “order” is placed out by CKP through CKP’s personal guarantee as per the 3 Nov 2012 agreement, and “in consideration of these incentives”, investor agreed to enter into the agreement for the acquisition of 27.11% shares; and subsequently after CKP placed the order, GCL had secured PTASU to sell PT ASI to Protasco, as per personal guaranteed by CKP in the 3 Nov 2012 agreement for a pre-agreed price of USD55million, hence PTASU agreed to enter SPA1.

Note1. this is material evidence that CKP is “desperate” and such proof is available on Bursa Malaysia website. Surprising none of defendant lawyer ratified plaintiff fraudulent misrepresentation.

(c) Therefore it was in furtherance of the investor agreement that Protasco and PT ASU entered into SPA 1, namely to enable Protasco to diversify its business into oil and gas in Indonesia vide related companies.

(d) SPA 1 was approved by Protasco’s board of directors vide a circular resolution. No project papers pertaining to SPA 1 were circulated for the Board’s consideration. Neither was there a briefing to the board nor a board of directors’ meeting relating to the decision by Dato’ Chong to enter into SPA 1.

(e) Neither was the investor agreement of 3 November 2012 disclosed to the Board of Protasco. As such it is contended by Tey and Ooi that it was Dato’ Chong who was in breach of his fiduciary duties in failing to disclose the terms of the investor agreement.

(f) Ooi further maintains that from his appointment as director on 10 December 2012 to payment of the deposit on 28 December 2012, there was no board meeting, nor documentation nor communication whereby he could have induced or caused the board of Protasco to enter into SPA 1 and make the payment of RM50 million. Any such representation or inducement, which resulted in Protasco entering into SPA 1, was perpetrated by Dato’ Chong or his son, Kenny Chong Ther Nen (‘Kenny’).

(g) As for the due diligence of SPA 1 and the negotiations and entry into SPA 2, the principal officers acting for and on behalf of Protasco were Dato’ Chong and Kenny. They therefore had full knowledge and had participated in the preparation of SPA 2. This is evident from correspondence and emails.

(h) Protasco was represented by a lawyer while PT ASU was not. Protasco also appointed several professional parties to conduct the due diligence. As such Tey and Ooi maintain that there could not have been inducement, misrepresentation, deception, cheating or fraud as contended by Protasco, which caused the payment of USD27 million to PT ASU under SPA 2.

(i) With respect to the tenure of the exploration and production of oil and gas Tey and Ooi contend that Protasco knew that the concession was only until 14 December 2014. SPA 2 reduced the purchase price to USD22 million but sought to extend the tenure by 10 years while knowing full well that Pertamina’s policy is to grant a contract for only 2 or 3 years.

Comment:

This part is further perfected with the surface of FRAUD, DEFRAUD and CRIMINAL fraudulent misrepresentation by CKP through his alter egos (his son Kenny Chong Ther Nen, and his staff Ho Chun Fuat, etc) in his team, and a mistaken move by CKP when Tjoe Yudhis filed several SDs carrying misleading information on CKP’s behalf. Hence proven SPA2 and documents onwards signed by CKP and Tjoe are fraudulently orchestrated. In short, a SCAM. That explains why the fraudulent misrepresentation of KPMG report which deceived PTASU claiming lower value for PTASI is untrue and it’s an excuse for CKP to lower the SPA price; and the fabrication of SPA3 which came with the 10 years license tenure knowing very well that original SPA came with agreed 2 years tenure at USD55mil price tag, is another proof of FRAUD. Such request self-explained when Tjoe under CKP’s control signed SPA2 and subsequent documents, and ends their scam with a series of manufactured SDs as an excuse to put blame and to manufacture this lawsuit.

(j) It is further contended that Protasco failed to reactivate the oil field or provide a business duration and drilling program for the oil field to facilitate any extension sought.

(k) Tey and Ooi maintain that the investigation conducted was a sham. At all material times Ooi states that the representatives of Protasco namely Dato’ Chong and Kenny were actively involved in the negotiation of SPA 1 and SPA 2 with PT ASU.

(l) Further there was no investigation report produced, no report of its findings to the Board of Directors nor any queries put to Tey and Ooi at all.

(m) The claim it is contended was filed at the behest of Dato’ Chong after a board meeting convened to ratify his unilateral action.

(n) Tey and Ooi’s ownership of shareholding in PT ASU, PT Inovisi and Acclaim is wholly denied. Instead they aver that it is Dato’ Chong and Kenny who enjoy an interest in PT Inovisi vide one R S Maha Niaga Sdn Bhd, an entity they control.

(o) They further aver that Dato’ Chong Kenny and senior management of Protasco and its subsidiaries have financially benefited through illegal financial gains from the agreement between Protasco and PT ASU.

Comment:

The most important summary and motive of this sham lawsuit are because CKP wanted to gain sole control of Protasco after CKP got what he wanted, which is CKP’s position being MD and controls Protasco.

CKP’s unlawful gain of power and money is not just limited to his RM10 million money laundering vehicle RS Maha Niaga, but CKP’s unrealistic salaries ballooned to RM4.2 million a year (note2), and unsustainable dividend to pay CKP. CKP further recycled this ill-gotten money buying into more Protasco shares and gets the more illegal dividend, all of which are evidence that the lawsuit is sham and not a civil case. It’s a criminal case on CKP himself.

Note2: Money that CKP took from Protasco are proven from Protasco annual report available on Bursa Malaysia public information online.

[26] In summary it is Tey and Ooi’s defence that the entire transaction between Protasco and PT ASU was undertaken at the behest of, and with the full knowledge and consent of Dato’ Chong and Kenny.

For civil turn criminal case discussion purposes.