Judge discloses previous advisory role in firm linked to MYAirline founder

A civil court judge has disclosed that she was previously a lawyer for a company linked to MYAirline founder Goh Hwan Hua, who is being sued by 15 investors over his separate business.

As a result, Kuala Lumpur High Court judge Adlin Abdul Majid this morning postponed the hearing to Nov 27 to allow counsel for the investors as well as Goh to mull whether to seek her recusal over a potential conflict of interest.

Today was initially fixed for hearing of an application by Goh (above) and four other defendants to strike out a lawsuit by 15 plaintiffs over alleged failure to pay monthly redemption value sums worth over RM8 million linked to I-Serve Online Mall Sdn Bhd (ISOM).

The 15 individual investors’ counsel Rajesh Nagarajan said that Adlin disclosed to parties that she used to advise I-Serve Technology, a firm linked to one of the defendants, ISOM.

Rajesh said that Adlin mentioned that her advisory role took place when she was still a practising lawyer and prior to her elevation to the bench as a judge.

“So, there may be a conflict (of interest if Adlin hears the matter). As such, counsel have to get instructions from our respective clients (on whether to seek the judge’s withdrawal from the case),” Rajesh said.

The lawyer added that Adlin has fixed Nov 27 for case management for an update on whether the plaintiffs and defendants have any objections against her continuing to preside over the case.

According to the suit, the 15 individuals are suing Goh - who co-founded troubled budget carrier MYAirline - and the other four defendants - ISOM, Bright Moon Venture PLT (BMV), QA Smart Partnership PLT (QAS), and Trillion Cove Holdings Bhd (TCH) - over alleged breach of fiduciary duties and should be made personally liable over losses suffered by the investors.

The plaintiffs, aged between 58 and 74, claimed, among others, that Goh had in conference calls with them made representations over ongoing issues faced by ISOM and the impact it would or would not have on the investors’ monthly returns.

The 15 individuals pointed out that ISOM, TCH, and the other firms were raided by Bank Negara Malaysia on Nov 11, 2021, and that a freezing order was allegedly issued against the companies.

The plaintiffs are seeking repayment of the RM8 million subscription price as well as repayment of the owed monthly redemption arrears and five percent annual interest on any awarded judgment sum, among other reliefs sought.

Meanwhile, in Goh’s affidavit supporting his application to strike out the writ of summons without it being subjected to a full trial, the businessperson pointed out that the lawsuit is statutorily prohibited from being mounted.

He contended that it is because the impugned funds sought by the suit are part of funds seized pursuant to orders under the Anti-Money Laundering Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA).

The 66-year-old claimed the legal action was scandalous, frivolous, and vexatious as he was neither privy nor a party to the contracts entered into between the plaintiffs and BMV, QAS, and TCH.

Goh noted that the purported breaches of contracts are solely attributable to the freezing orders issued by Bank Negara and the seizure orders taken out by public prosecutors.

He claimed that the plaintiffs' actions were incongruous and inconsistent with one another, defeating their own admissions, and unsustainable due to not being supported by material particulars.

All five defendants have previously filed their statements of defence last year against the lawsuit.

Goh is represented by law firm Mathews Hun Lachimanan, while counsel from Chetan Jethwani & Company appeared for ISOM and TCH.

Law firm D’Cruz & Sia is acting for BMV and Qas.

On Sept 1 this year via several media statements, Bank Negara said it had imposed RM50 million in compound against i-Serve Group for accepting deposits without a licence.

The central bank said it imposed the compound for seven entities under the i-Serve Group per Section 137(1) of the Financial Services Act (FSA) and for money laundering under Section 4(1) of AMLA.

It said the compound was imposed on Oct 19, last year with the written consent of the public prosecutor under a joint enforcement action that followed on the heels of the central bank's probe, which found that the offences were conducted between June 2018 and September 2021.

The seven entities are ISOM (RM12.5 million), i-Serve Technology and Vacations Sdn Bhd (RM12.5 million), QA Smart Partnership PLT, QA Elite Partnership PLT, QA Premium Partnership PLT and MM2217 PLT and Valuewise PLT (RM5 million each).

Bank Negara added that the entities paid the compound on Nov 16. - Mkini