PUTRAJAYA: The Federal Court today ruled that a company is not entitled to recover RM1.6 million in principal and interest from a businesswoman and two others as it was not in possession of a licence to lend money.
A three-member bench chaired by Chief Judge of Sabah and Sarawak Rahman Sebli allowed the appeal by businesswoman Junaidah Leman, her son Fairuz Roslan and their company, Triple Zest Trading & Suppliers Sdn Bhd.
The panel held that the Court of Appeal had erred in law in its findings.
“We unanimously allow the appeal and order costs at RM60,000,” said Rahman, who sat with Justices Hasnah Hashim and Nordin Hassan.
Junaidah, 61, Fairuz and their company were involved in the oil trade business and had wanted to build a petrol station on a piece of land.
They sought the assistance of Shamsuri Johar, who assisted in securing a loan from Applied Business Technologies Sdn Bhd, the respondent in the appeal.
Junaidah, Fairuz and Triple Zest Trading & Suppliers placed two plots of land as collateral for the loan before the money was transferred to a company in Singapore on Shamsuri’s instructions.
Applied Business Technologies filed a suit in 2018 and claimed RM1.6 million, consisting of the principal loan sum of RM800,000 and a further RM800,000 in “agreed profits” payable within a month.
Junaidah, Fairuz and Triple Zest Trading & Suppliers were named as defendants.
In 2020, the High Court in Ipoh ruled in favour of Applied Business Technologies.
The following year, the appeal by Junaidah and her co-defendants was allowed in part by the Court of Appeal, which ordered that they repay Applied Business Technologies the principal sum of RM800,000.
Dissatisfied with the outcome, the trio obtained leave by the Federal Court last year.
In the appeal, the apex court was also asked to consider whether it was legal to provide for interest of 100% payable in 30 days, and if found to be illegal, whether the court can order the repayment of only the principal sum to the lender.
The court was also asked whether a person not defined as a moneylender could loan money with interest.
Earlier, lawyer Hong Chong Hang, who appeared for the three appellants, submitted that the loan agreement was illegal.
He said Applied Business Technologies did not have a licence to lend money and that the law did not allow a lender to impose interest at the rate of 100% payable within one month.
Hong said that under the Moneylenders Act, the maximum interest chargeable per annum was only 12% per annum for secured loans, and 18% per annum for unsecured loans.
He submitted that the RM800,000 was interest on the loan disguised as “agreed profits”.
“The court should not assist illegal moneylenders to recover the principal amount or else it would create a breeding ground for them to flourish,” he said.
Hong was assisted by Koay Jing Qian. Ahmad Hazrin Abdul Rahman and Muzamil Alif Mohamad represented Applied Business Technologies. - FMT
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