Protasco directors in legal tussle over the recovery of RM10mil

PETALING JAYA: In a turn of events, Protasco Bhd independent director Tey Por Yee (pic left) has filed a derivative action at the Kuala Lumpur High Court against the company’s managing director Datuk Seri Chong Ket Pen (pic right) and six others for the recovery of RM10mil.

Tey, through his private vehicle Kingdom Seekers Ventures Sdn Bhd, is suing the defendants for and on behalf of Protasco to recover the money which Chong had allegedly benefitted from via a private company RS Maha Niaga Sdn Bhd.

In a statement late yesterday, Chong denied the allegations, claiming that the derivative action by Tey was completely devoid of merit and appeared to have been actuated by malice.

He said the proceedings amounted to nothing more than an attempt to smear and tarnish his reputation, apart from seeking to divert attention away from the ongoing legal proceedings filed by Protasco against Tey and others.

“I am confident that the truth is on my side and will emerge in the fullness of time. I have appointed solicitors to vigorously defend the said derivative action. I will be lodging a police report in respect of the allegations made against me,” Chong said in a statement.

In the suit filed by Kingdom Seekers Ventures, apart from Chong, the others named as defendants were Kenny Chong Ther Nen (Chong’s son), Low Kian Seng, Edward Khoo Mong Wei, Lim Yew Ting and RS Maha Niaga. Also named as a defendant was Protasco by virtue of it being the representative of the claim.

Together with his counsel Gideon Tan, Tey claimed to have uncovered a money trail involving monies paid out by Protasco through two layers of companies, which eventually led to an RM10mil cheque being drawn and paid to Maha Niaga.

Tey alleged that an Indonesian oil and gas company, PT Anglo Slavic Utama (PT ASU), through its lawyers, had informed him that the RM10mil was Chong’s financial gain from two contracts.

The two contracts were the oil deal with PT ASU, and bitumen and coal trading with Indonesian company PT Goldchild Integritas Abadi.

According to Tey, in February 2013, Protasco via its subsidiaries has paid RM16mil in total to Goldchild Integritas for bitumen and coal trading with Indonesia. Of this RM16mil, RM10mil was channelled back to Maha Niaga.

The suit, which was filed yesterday, came a day after Protasco announced that two shareholders holding 10.51% collectively were seeking to convene an EGM to remove both Tey and Ooi Kock Aun, a non-executive director.

Speaking to reporters at a briefing yesterday, Tey claimed that the two shareholders seeking his removal were linked to Chong.

“Now, I know the real reason for the lawsuit – it is really just a boardroom fight and they want to remove me, who have invested close to RM100mil in Protasco. I am a substantial shareholder and a threat to Datuk Seri Chong.”

Kingdom Seekers Ventures is seeking a declaration from the defendants that they had allegedly breached their fiduciary duties by benefiting RM10mil at the expense of Protasco.

Tey is also seeking an order that the defendants account for the RM10mil, and return it to Protasco within 14 days from the court order or time stipulated by the court.

Tey contended that according to records with the Companies Commission of Malaysia, shareholders of Maha Niaga are Protasco project director of property development Edward Khoo Mong Wei and corporate adviser Lim Yew Ting.

Khoo is also a director of Maha Niaga, together with Protasco Trading Sdn Bhd (a Protasco subsidiary) general manager Low Kian Seng. Khor Hooi Ling is the company secretary for both Protasco and Maha Niaga.

Both companies have the same correspondence address and telephone numbers.

Tey, who has an 18% stake in Protasco, said he would call for an EGM to present the facts to the shareholders and to ask for the removal of Chong. “I anticipate the EGM to be held by end-November or early December, as soon as possible,” he said.

The corporate battle between Chong and Tey came to light on Sept 22 this year when Protasco filed a suit against Tey, Ooi and PT ASU in relation to the proposed acquisition in late 2012 of a 76% stake in PT Anglo Slavic Indonesia (PT ASI) for US$55mil (RM181.3mil).

On Jan 29, Protasco entered into an amended SPA with PT ASU for the acquisition of a 63% stake in PT ASI for US$22mil that came with a profit guarantee of US$22mil spread over four years.

However, the deal fell through, as conditions under the amended SPA were not fulfilled within the stipulated timeframe.

Protasco, in its suit, claimed that Tey and Ooi breached their fiduciary and statutory duties, including the duty to disclose their interest in the transaction, conspiracy to defraud the company and the making of secret profits. Tey denied the allegations and contended that neither he nor Ooi are directors of PT ASU or PT ASI.