Friday, October 1, 2010

Seaweed investors file RM26 million lawsuit

The following news report is an example of how investment schemes that have not gone through regulatory scrutiny can go seriously wrong for innocent investors. The need for the Malaysian public to ensure that they only invest in investment schemes approved by regulatory bodies such as the Companies Commission of Malaysia, Securities Commission, Bank Negara Malaysia or Suruhanjaya Koperasi Malaysia cannot be emphasised enough.

IPOH, Sept 30 — Seven investors in a seaweed business representing 2,000-odd investors in Perak who claimed to have been deceived to invest in the venture since 2007, today filed a suit at the High Court here to get a full refund of their investment totalling RM26 million.

They named four companies, Fresh Palms Sdn Bhd, A.K United Sdn Bhd, Genuine Starlight Sdn Bhd and Loyal Sunrich Sdn Bhd, and two individuals P.G.P Nathan, 39, and Choi Kok Peng, 45, as the defendants.

The suit was filed through the law firm of N.P Ramachandran & Associates at the High Court Registrar’s Office at 9.30am. Nathan is a director of Genuine Starlight and Loyal Sunrich while Choi is a member of the Board of Directors of Fresh Palms and A.K United.

The seven plaintiffs — P. William Rajah, 34, Chong Pek Kuon, 36, R. Edwin, 48, Abu Bakar Maidin, 52, S. Nathan, 56, M. Gunaballan, 58 dan P.K Pathmanathan, 58 — claimed to be representing the 2,000-odd investors who had suffered losses after investing in the seaweed business, which was conducted in Semporna, Sabah.

They claimed that the fifth and sixth defendants (Nathan and Choi) had cheated them by claiming hefty returns awaited legal investors of the venture.

They also claimed that Nathan had made a representation that each invested lot would receive a revenue three times the value of the investment within six months, with each lot initially priced at RM3,300, but was later increased to RM6,900.

The plaintiffs also claimed that investors who invested more than five lots were promised a holiday package overseas, while those who introduced a friend to invest in the venture would be given a commission.

Choi was also alleged to have promised a revenue three times the value of the investment, besides an investment certificate from VOIPCOM USA Inc, a United States-based company which allegedly agreed to carry out the project.

The plaintiffs claimed that because of the assurance given by the defendants, they had invested a total of RM25,826,800 between February 2007 and November 2008.

They are now seeking a full refund of the investment money, eight per cent interest, costs and other relief deemed fit by the court.