KUALA LUMPUR: The High Court has dismissed a RM5.1 million class action suit filed by 72 investors against the government, police, and Bank Negara Malaysia (BNM) over alleged mismanagement of funds seized during a raid on the now-defunct MGSB Bhd.
Judicial Commissioner Gan Techiong allowed the application by BNM Financial Intelligence and Enforcement Department officer Siti Waki'ah Mohd Nor, a defendant in the suit, to strike out the claim, stating that it was frivolous, vexatious, and an abuse of the court process.
Siti Waki'ah was the lead investigator in the criminal financial case against MGSB Bhd and its four directors under the Anti-Money Laundering, Anti-Terrorism Financing, and Proceeds of Unlawful Activities.
In a statement dated Aug 23, 2019, the central bank said the company and its directors were fined a total of RM881 million and sentenced to imprisonment after pleading guilty to charges of accepting deposits without a valid license and engaging in money laundering activities.
During its investigation, BNM froze 54 bank accounts belonging to MGSB Bhd and seized cash in both Ringgit Malaysia and foreign currencies under the Act.
In the current suit, the plaintiffs sought to recover RM4.2 million collectively deposited with MGSB for purported investments in projects such as the import and export of coconuts, a development project in Pulau Sirandah, Indonesia, and a Go Public Initial Public Offering in Indonesia.
The plaintiffs expressed dissatisfaction with the defendants' decision to release part of the seized funds.
They argued that the defendants, both jointly and/or individually, had abused their powers and committed misfeasance as public servants.
They further contended that the defendants, as civil servants and enforcement officers involved in the joint raid, were fully responsible for safeguarding and protecting the funds and confiscated assets belonging to MGSB Bhd at all material times.
The plaintiffs sought a court order compelling the defendants to release or return RM5.1 million, or RM4.2 million representing their capital investment, as part of the seized funds.
Alternatively, they sought RM851,000, representing the profit promised to them by MGSB.
In her defence, Siti Waki'ah argued that she was granted legal immunity under Section 87 of the BNM Act 2009, which protects BNM officers from legal action in performing their duties.
Judicial Commissioner Gan Techiong ruled that there was no causal link between the plaintiffs' alleged losses and Siti Waki'ah's actions.
"She did not receive any money from the plaintiffs, who willingly paid money to MGSB Bhd.
"Siti Waki'ah was merely carrying out her duties in investigating MGSB Bhd's activities under instructions from BNM or the public prosecutor.
"There is no evidence suggesting a lack of good faith on her part as an investigating officer involved in the raid and investigation of MGSB Bhd.
"She appears to have been named a co-defendant solely because she was the investigating officer.
"General allegations of misfeasance are insufficient to justify naming her as a co-defendant alongside her department," Gan stated in the grounds of judgment recently published by the judicial department.