1MDB’s former investments director Kelvin Tan Kay Jin failed to strike out the sovereign wealth fund’s US$8 billion (RM33.5 billion) civil action against him.
The Kuala Lumpur High Court this afternoon dismissed Tan’s application to strike out the lawsuit over alleged fraud and misappropriation of 1MDB’s funds.
Through the striking-out bid, he had contended among others that he was not a board member of 1MDB and too far down its organisational hierarchy to be involved in any alleged wrongdoing.
Today’s court decision means that Tan remains listed as one of eight defendants targeted by the civil suit, which includes former premier Najib Abdul Razak.
The court has also ordered Tan to pay RM10,000 in costs to 1MDB.
When contacted, a member of 1MDB’s legal team confirmed that judicial commissioner Atan Mustaffa Yussof Ahmad dismissed the application to remove Tan as a defendant in the lawsuit.
According to a copy of the brief grounds of the court’s decision this afternoon, Atan ruled that 1MDB’s suit against Tan is not one suitable to be decided via a striking-out bid.
The judicial commissioner said that the issue of whether there is a nexus (linkage) between Tan and 1MDB’s financial loss is one that needs to go for a full hearing.
Atan noted that this refers to the related issue of whether Tan, despite not being a member of 1MDB’s board, was still liable for the loss due to his recommendations and representations to the board as the fund’s then investment director.
“An employer can always sue an employee for wrongful acts committed in the course of employment, which results in loss and damage to the employer,” the judicial commissioner said.
22 civil actions
The suit is one among 22 civil actions launched by 1MDB and its former subsidiary SRC International last year, targeting those who purportedly defrauded the two government-owned entities, whether knowingly or unknowingly.
Najib is listed as the first defendant among eight in the civil suit.
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Besides Tan, the other defendants are Terrence Geh Choh Heng (former 1MDB deputy chief financial officer), Jasmine Loo Ai Swan (former 1MDB general counsel), Casey Tang Keng Chee (1MDB's former executive director), Vincent Beng Huat Koh (1MDB’s former chief investment officer), Radhi Mohamad (1MDB’s former chief financial officer), and Nik Faisal Ariff Kamil (former CEO of SRC International).
SRC used to be a subsidiary of 1MDB before it became fully owned by the Minister of Finance Incorporated (MoF Inc). Najib also used to be SRC's advisor emeritus.
Mareva injunction
Incidentally, in relation to the same civil action, the High Court on Feb 8 had issued a Mareva injunction order against Najib over US$681 million in assets.
Among the effects of the restraining order is that the former finance minister is only allowed to withdraw up to RM100,000 monthly from his bank accounts to meet his living expenses.
The court has fixed May 6 to hear Najib's application to remove the Mareva injunction.
Under the law for civil action, a Mareva injunction is a court order which effectively freezes the assets of a defendant from being dissipated, pending the outcome of a related lawsuit.
This restraining order is particularly effective over liquid assets, such as money held in financial institutions.
In a separate, ongoing 1MDB audit criminal trial against Najib and the sovereign wealth fund’s former CEO Arul Kanda Kandasamy, Tan is a prosecution witness. - Mkini
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