The dispute between the parties revolve around three investment agreements involving total investments of RM40 million, with promised returns of between 18% and 20% annually.
KUALA LUMPUR (April 7): Koperasi Permodalan Felda Malaysia 2 Bhd (KPF2) has obtained an ex-parte Mareva injunction to freeze RM40 million worth of assets owned by ACE Credit (M) Sdn Bhd and its parent ACE Holdings Bhd, together with a proprietary injunction to stop them from dealing in the assets, for allegedly failing to honour investment agreements in which they promised guaranteed returns to KPF2.
Also named as defendants in the injunction application filed by KPF2 — a cooperative set up for second-generation Felda settlers — were two mutual directors of both ACE Credit and ACE Holdings, namely Choong Chee Meng and Chang Ai Nee. The application was filed last Thursday (March 30) and granted by the Kuala Lumpur High Court (Commercial) Judge Ong Chee Kwan in chambers on Friday.
The dispute between KPF2 and the ACE Group revolve around three investment agreements involving total investments of RM40 million, with promised returns of between 18% and 20% annually, over which KPF2 is suing the defendants for alleged breach of agreement, according to court documents sighted by The Edge.
According to KPF2, the cooperative entered into two investment agreements dated Dec 10, 2020 and May 5, 2021 with ACE Credit, both on the promise of 18% annual returns. KPF2 invested RM20 million in the first agreement and RM10 million in the second one. A little over two months later, KPF2 invested another RM10 million via an investment agreement dated July 29, 2021, on the promise of 20% annual return.
All three investment agreements have a tenure of five years, and allegedly come with a corporate guarantee from ACE Credit (M) Sdn Bhd, as well as Choong and Chang's personal guarantees.
In its statement of claim, KPF2 said ACE Credit was late for several months with the payment of their 2021 investment returns, despite KPF2 repeatedly chasing for the payment that was supposed to be made within 14 days from Dec 31. The 2021 returns were only paid on March 28. ACE Credit then failed to pay the returns for the first half of 2022 under the third agreement, which was supposed to be made semi-annually. Although it initially asked for more time to make the payment as KPF2 chased for the returns, ACE Credit later told KPF2, via a lawyer's letter, that the third agreement was only a money-lending agreement, and not an investment agreement, which KPF2 vehemently denies.
“This is a case where the defendants are trying to run away from their investors by raising a baseless allegation as if the agreements entered by D1 (first defendant, ACE Credit) are money-lending agreements. The defendants cannot be allowed to unjustly enrich themselves.
“D1’s and/or the other defendants" lack of probity and honesty throughout the course of their business dealings with the plaintiff shows that there is a real risk of dissipation of assets by D1 and/or the other defendants,” KPF2 said.
The injunctions will remain in effect for 21 days from the date of the order, while the defendants are required to file an affidavit, within seven days, stating in full the whereabouts of the RM40 million that the cooperative claims are their investment monies. The defendants are also required to declare their asset ownership domestically and abroad.
The court has also set April 13 for the inter-partes hearing — a hearing on notice to both parties, which both are required to attend — of this application.
Apart from KPF2, The Edge reported in February this year that at least four other investors have filed separate legal actions against ACE Holdings Bhd for allegedly failing to deliver on their promised investment returns. These investors reportedly demanded the return of a cumulative RM22.34 million in principal and interest from ACE Group.
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