Hong Leong Bank negligently released RM1.2mil to insolvency dept, rules court

 The Court of Appeal also says the government could not be faulted for the bank’s mistake.

The Court of Appeal has ordered Hong Leong Bank to pay RM1,270,262.15 to Ten Jing Enterprise Sdn Bhd, together with interest and costs, after finding the bank guilty of negligence in the release of company funds.

PUTRAJAYA:

 The Court of Appeal has affirmed that Hong Leong Bank was negligent in breaching a seizure order under anti-money laundering laws, resulting in the release of RM1.2 million paid by a company to the insolvency department 11 years ago.

The Court of Appeal also affirmed a finding by the High Court in Kuala Lumpur that the government could not be faulted for the bank’s mistake.

“The appeals by the bank and the company (Ten Jing Enterprise Sdn Bhd) are dismissed as they have no merit,” said Justice Ahmad Kamal Shahid, who read out the court’s brief grounds of judgment.

The bank was appealing the award of judgment in favour of Ten Jing and the government.

Meanwhile, the company was appealing against the dismissal of its claim against the government by the High Court.

Also on the panel hearing the appeals were Justices S Nantha Balan and Azhahari Kamal Ramli.

Nantha Balan, who chaired the bench, thanked counsel for the quality of their respective submissions, noting that the factual matrix of the case made it unique.

The bench also ordered the bank to pay the company and the government costs in the sum of RM30,000 and RM20,000, respectively.

The company was ordered to pay costs of RM30,000 and RM10,000 to the government and the bank, respectively.

The appeals court maintained the High Court’s judgment requiring Hong Leong to pay RM1,270,262.15 to the company, inclusive of 5% interest from Oct 10, 2018 until the date the judgment sum is settled in full.

Lawyers V Jeya Kumar, Kee Hui Yee and Jowyn Saw represented the company, while Karen Lee and See Yen Lin appeared for the bank. Senior federal counsel Siti Aishah Ramlan and Siti Syakimah Ibrahim acted for the government.

According to the facts of the case, Ten Jing had in 2012 paid money to trading company TS Steel Sdn Bhd for the supply of steel. However, the consignment was not delivered.

In early 2013, a seizure order was issued under the Anti-Money Laundering, Anti-Terrorism Financing Act (Amlatfa) 2001 against the assets of TS Steel pending an investigation.

This included the RM1.2 million that belonged to Ten Jing which TS Steel had deposited into its account with Hong Leong.

After a series of legal battles, the Court of Appeal in 2018 ordered that the money be returned to Ten Jing.

However, when Ten Jing and the customs department wrote to ask for the money to be released, the bank replied that it had, upon realising that a winding-up order had been issued against TS Steel, remitted the funds to the insolvency department.

In 2019, Ten Jing filed a suit against the bank, the government, two customs officers and the director-general of customs for breach of statutory duty and negligence, for failing to preserve the money under the seizure order pending the disposal of proceedings under the anti-money laundering laws. - FMT