KUALA LUMPUR: Kamdar Sdn Bhd (KSB), a wholly-owned subsidiary of Kamdar Group (M) Bhd, is suing former chairman Bipinchandra Balvantrai (pic), former director Jayesh R Kamdar Rajnikant and contractor Yap Kim Hong for allegedly withdrawing funds totalling RM8.7 million from the company.
Jayesh is a nephew of Bipinchandra and cousin to Kamdar Group managing director Kamal Kumar Kishorchandra Kamdar.
KSB is also seeking to claim general, aggravated and exemplary damages, compound interest and other relief as the court deems fit.
In a filing with Bursa Malaysia yesterday, Kamdar Group said KSB had filed a writ of summons, together with a statement of claims, through the Kuala Lumpur High Court on Oct 3.
“On Oct 9, KSB, via its solicitors Messrs Amrit & Co, has served the same to the three defendants to initiate proceedings,” it added.
When contacted by The Edge Financial Daily, Yap declined to comment, while Bipinchandra said his lawyers would look into the matter. As for Jayesh, he said he has yet to receive the summons and so is unable to comment.
The company’s move to sue the trio followed a special audit by Messrs Morison Anuarul Azizan Chew in April this year, which had shown that RM8.84 million had been withdrawn from KSB’s accounts in four non-business withdrawals between March 23 and 26, 2005, by two individuals who were former officers of Kamdar Group.
Earlier in March, The Edge Weekly had reported that RM8.84 million was illicitly withdrawn from KBS’s accounts, of which RM5.76 million was for a bank draft for the purchase of Kamdar Group shares, reportedly under Yap’s name, during its initial public offering.
After the withdrawal was discovered, the report said certain family members of Kamdar Group then contributed their own money to cover the hole but now these individuals want to recover their money.
It added that the incident only came to light after Kamdar Group sent Yap two letters demanding the return of the missing money, which prompted him to tell Bursa his side of the story. Yap, a contractor, had asserted to the bourse that he had only acted as a proxy for a former director of Kamdar Group to hold the shares.
In a filing dated June 20, 2014, the group’s auditor said RM80,000 was transferred directly on March 26, 2005, to one of the officers’ account — which had been identified as Jayesh’s in The Edge Weekly’s report — from KSB’s account, which was repaid in January 2011. The auditors termed it “an unauthorised payment and could amount to an unauthorised loan”.
The filing also confirmed that several shareholders had advanced RM8.7 million to KSB from March 28, 2005, but said “there was no conclusive proof as to what these were for”.
“The special auditors concluded that the above transactions were wrongly recorded and the financials were misstated to indicate that they were loans taken by a former director and were subsequently set off by advances from the shareholders,” the filing added.
A tussle between shareholders had started back in March 2013, when Bipinchandra and his son Gautam Kamdar Bipinchandra had asked for an extraordinary general meeting to be held on May 2 to remove three directors.
The duo sought the removal of Kamal Kumar and to replace independent directors Rajesh Kumar Gejinder Nath and Frank Liang Ah Wah.
According to the group’s 2013 annual report, Bipinchandra holds a direct and indirect stake of 28.43% and 0.48%, respectively, as at April 30, 2014, while Gautam holds 3.98%. Kamal Kumar holds a direct interest of 25.63%.
For the six months ended June 30, Kamdar Group posted a 44.9% decrease in net profit to RM4.8 million from RM8.7 million in the previous corresponding period. Revenue decreased to RM90.9 million, from RM97.3 million.
This article first appeared in The Edge Financial Daily, on October 15, 2014.