KUALA LUMPUR (Jan 31): Bank Negara Malaysia (BNM) has issued a letter to lift the freezing of some 10 accounts related to i-Serve Online Mall and its affiliates, following the filing of its judicial review and a report that appeared on theedgemarkets.com last Thursday (Jan 27).
It is understood that some 30 bank accounts with the company and its affiliates remain frozen by the central bank regulator.
A letter from BNM last Friday, sighted by theedgemarkets.com, to the company's solicitors Messrs Chetan Jethwani & Company revealed that the release of the funds could be used to pay wages of its staff which had been affected since the freezing on Nov 10, 2021.
i-Serve Online Mall had since Nov 22 written to BNM seeking the lifting of the freeze of the accounts for payment of salaries, statutory obligations like SOCSO, EPF and income tax and its trade, commercial and contractual liabilities. However, the central bank kept mum without providing any reason for not granting the request.
Last November, 22 premises linked to i-Serve Online Mall and its related affiliates across Kuala Lumpur and Selangor were raided in an operation led by the National Anti-Financial Crime Centre with BNM as the lead agency. It is understood that the pending freezing did not involve the other agencies which normally form part of such enforcement action.
On Jan 26, i-Serve Online Mall, its shareholders Datuk Goh Hwan Hua and Boon Soon Heng, Goh's wife Datin Neow Ean Lee, i-Serve Technology & Vacations Sdn Bhd (ISTV), Advance Digital Ventures Bhd (ADV) and Trillion Cove Holdings Bhd (TCH) filed a judicial review application in the High Court here.
Goh, whose name recently appeared in a newly-established ultra low-cost carrier, owns 31.75% of i-Serve Online Mall. He is also the group chief executive officer (CEO) of ADV — where Neow is the executive chairman — as well as the group CEO of TCH and a director of ISTV. Boon, also a director of ISTV, holds a 15.87% stake in i-Serve Online Mall.
In the judicial review application, six respondents were named: BNM, the central bank's financial intelligence and enforcement department (FIED) director Mohd Fuad Arshad, FIED manager Sarah Syamimi Mohd Suhaimi, FIED officers Muhammad Banjumaswira Ishak and Maisarah Najla Mansor as well as the Attorney-General’s Chambers' Deputy Public Prosecutor Kamal Baharin Omar.
Seeking court order to quash authorities' action
The applicants are seeking leave from the court for a certiorari order to quash the 14 asset freeze orders that BNM issued on Nov 11 last year under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act's (AMLATFPUA) Section 44, and a mandamus order to compel the respondents to consider their applications — dated Nov 24 and Dec 8 last year — to revoke and/or vary the asset freeze orders.
They also want the respondents to furnish them with all correspondence, instruments and records related to the investigations carried out by BNM, and all search and seizure warrants and asset freeze orders that are in their possession.
The applicants are also seeking a stay of the asset freeze orders, pending the disposal of this judicial review application.
In judicial review applications, leave (permission) has to be gained from the court before the full merits of an application can be heard.
Goh, who filed the affidavit in support of the application for a judicial review, claimed that the authorities' action was mala fide (bad intention), illegal and an abuse of power.
He claimed that the present action against i-Serve Online Mall and its affiliates is an infringement of their rights, and that they will continue to suffer serious prejudice, while being unable to make statutory payments, pay employee salaries and trade creditors as well as provide personal sustenance — which will irreparably damage livelihoods of the applicants and many others.
He also alleged that the asset freeze orders issued by BNM were tainted by illegality, irrationality as well as procedural impropriety, and were ultra vires, mala fide and an abuse of power.
Besides the seven applicants, Goh said the central bank also issued similar orders under Section 44(1) of AMLATFPUA against other entities and individuals it deemed to be related, connected or associated companies, and officers connected to or related to the applicants.
Besides that, BNM, along with officers of various other enforcement agencies, also executed search warrants on Nov 11 in a simultaneous raid on the offices of i-Serve Online Mall, ISTV, ADV and TCH, Goh's and Boon’s residences, as well as the offices of other companies the central bank deemed were related, connected or associated to the applicants and one other ISTV director.
BNM officers, however, refused to provide the applicants copies of the search and seizure warrants, Goh claimed.
They also complained about the publication of the BNM press release that substantial amounts of cash were seized, which was not only factually untrue but also false. iServe Online Mall claimed that the false reporting was calculated to create a misconception that BNM had justification for raiding the 22 premises whereas seized funds were working capital in bank accounts which were only frozen and no seizure orders were issued by BNM.
When contacted by The Edge, a spokesperson confirmed that the judicial review will proceed notwithstanding that BNM is seen to have backed down in making some accommodation for the request.
"The release of these 10 accounts amounting to just a small fraction of the working capital that was frozen is certainly not enough to even pay for one-month operational costs of these companies. It is also a little too late and did not meet the fair requests that were made over the past (almost) three months," said the spokesperson.
The spokesperson added: "The truth is BNM knew the freezing orders will expire after three months, that is Feb 10, 2022, therefore BNM waited this long and only after the legal action is filed. This is unfair, an abuse of their powers and playing around with the legal system to render the judicial review action redundant.
"But the legal action is not academic as there are several important live issues that need to be dealt with by the court. We will proceed and hope BNM will act more reasonably. We have given full cooperation to BNM's investigations and there is just no logic why we are treated this way unless it is to serve some other ulterior motives," added the spokesperson.
A criminal lawyer when approached who wanted to remain anonymous described concerns regarding the enforcement of money laundering actions.
"Criminal law practitioners have been concerned that of late the anti-money laundering legislation is being abused by various enforcement agencies.
"Parliament made amendments to alleviate the harm caused by indiscriminate freezing but it appears that enforcement agencies have ignored the legislative imperative. A freezing order should only be used in the most clearest of cases for specific purposes and not arbitrarily to allow enforcement agencies to take their own sweet time to investigate."