Kuala Lumpur, 17 November 2009
Landmark ruling by the Court a timely reminder to company directors
The Securities Commission Malaysia (SC) has scored another milestone in its relentless efforts to enhance corporate governance among public listed companies. This followed a landmark ruling by the Court ordering Kenneth Vun @ Vun Yun Liun (Kenneth Vun), the former managing director and a shareholder of FTEC Resources Berhad (FRB), to restitute company funds.
This is the first time ever a company director has been ordered by the court to restitute company funds.
In the judgment obtained on 11 November 2009, the High Court ordered Kenneth Vun to restitute RM2.496 million to FRB, being the amount of company funds that he had caused to be misused for his personal benefit. In addition, he was restrained from directly or indirectly managing funds of FRB and/or any of the companies in the FRB Group of Companies for 2 years after he has complied with the restitution order, unless with prior approval of the SC.
FTEC Resources has been renamed Mangotone Group Berhad.
The judgment marked a major success for the SC, which had sued Kenneth Vun on 26 September 2007. SC’s investigation into the utilisation of the public issue proceeds by FRB showed that Kenneth Vun had utilised a portion of the proceeds for his own benefit and personal use. This constituted a breach of the conditions set by the SC when it approved the listing of FRB.
The civil action was brought under Section 100 of the Securities Industry Act 1983, which allows the Court to make a restitution order upon application by the SC if it finds a person has contravened a relevant requirement.