Investment firm directors jailed 20 days for failing to comply with Mareva injunction

New Straits Times

2 days ago

KUALA LUMPUR: The High Court today jailed two directors of an investment firm 20 days each after finding them guilty of contempt of court for failing to comply with a Mareva injunction.
Judicial Commissioner Yusrin Faidz Yusoff sentenced Syed Mahadzir Fadaak Syed Jamil Fadaak and his wife, Erna Elliyana Rosli, for not complying with the injunctions issued on Sept 5 and Nov 22 last year.
A Mareva injunction is an order to freeze assets and prevent the transfer of assets before a judgment is enforced.
The couple apologised to the court for failing to comply with the Mareva injunction.
"We had no intention of insulting the court. We did not understand what was demanded of us," said Syed Mahadzir.
He said there was an ongoing audit and they only obtained a draft report as they were unable to pay the audit firm after their bank accounts were frozen.
The Mareva injunction was issued amid a civil suit on breach of contract. It came after the couple's firm, Alpha Capital (M) Bhd, failed to pay monthly dividend returns to 64 investors.
The 64 investors sued Alpha Capital for breach of contract involving RM19,831.440.50 of monthly dividend returns.
Yusrin suspended the jail term for two months to give the couple time to fully comply with the Mareva injunction issued in September last year.
The judge fined the couple RM10,000 each, which must be settled within seven days, in default seven days' jail.
In his ruling, Yusrin said he was not persuaded that the couple should only be fined, given the circumstances of the case.
"The great concealment of the material information, the failure to comply over an extended period and the strategic nature of the non-disclosure demands a stern response," he said.
Lawyers Sachpreetraj Singh and Simran Kaur acted for the 64 investors, while Ganesh Magenthiran appeared for the couple.