SC Obtains Injunction to Safeguard RM20 Million of Ayer Molek’s Monies

Kuala Lumpur , 7 September 2007

In an action to protect investors, the Securities Commission (SC) on 6 September 2007 obtained an injunction to prevent The Ayer Molek Rubber Company Berhad (Ayer Molek) and its solicitors Messrs. Ropizah Ambri & Co from disposing of or dealing with or dissipating any of its assets in or outside Malaysia up to the value of RM20 million, which represents the company’s sale proceeds of several pieces of land in 2006 and 2007.

The SC filed for an injunction following an investigation into the 2006 and 2007 sales of land made by Ayer Molek. The findings revealed that these sales were undertaken without shareholders’ approval and were in breach of paragraphs 10.04 and 10.06 of the Bursa Malaysia Listing Requirements. The sale of the land in 2007 represents Ayer Molek’s remaining plantation land measuring 91.146 hectares. The sale was made to Bintang-Bintang Sdn Bhd for a total consideration of RM8 million.

The order of the court, which can be viewed here , restrains and prohibits Ayer Molek, whether by itself, its servants, agents or otherwise from:

  • removing its assets from Malaysia up to the value of RM20 million;
  • disposing of or dealing with or dissipating any of its assets in or outside Malaysia or otherwise diminishing their value, up to the value of RM20 million including all monies held by Ayer Molek in all banks and financial institutions in and outside Malaysia; and
  • withdrawing monies belonging to Ayer Molek held in the account operated by its solicitors Messrs. Ropizah Ambri & Co or any other solicitors or agents

Pursuant to the court order, Ayer Molek is also required to furnish the following information within 10 days:

  • information of all its assets whether in or outside Malaysia including the nature, value and location of such assets; and
  • information and supporting documents on how and for what purposes the proceeds of the 2006 and 2007 sales were applied.

The SC has taken this significant pre-emptive action to preserve the assets of the company in the interest of investors. This underlines its strong emphasis on investor protection and that public listed companies operate in a responsible and accountable manner.

The SC adopts a strategic approach to enforcement for effective and timely results, employing a comprehensive range of enforcement tools to determine the most appropriate sanctions to be taken, depending on the nature of the offence. These can be through alternative mechanisms, such as civil or administrative actions in addition to criminal prosecution.

The civil actions taken by the SC include the disgorgement of companies’ ill-gotten gains and the freezing of assets to prevent them from being diverted. In the Swisscash illegal Internet investment scheme, the SC had obtained a worldwide Mareva injunction to prevent the persons involved in the scheme from disposing their assets. Earlier the SC had secured reimbursement for close to 90 percent of investors under a compensation scheme for losses incurred from an insider trading case involving Padiberas Nasional Berhad shares.

Injunction against The Ayer Molek Rubber Company Berhad

  • Writ (pdf - 1.2MB)
  • Order of the Court (pdf - 247KB)
  • Summons in Chambers (pdf - 192KB)


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