High Court orders ex-senior costing manager, his wife and mum to repay RM43.5m in secret profits to Mudajaya
KUALA LUMPUR, Aug 8 — A former senior costing manager and two members of his family have been ordered by the High Court in Shah Alam to repay construction firm Mudajaya Corporation Bhd a total of RM43,547,282.19 after admitting they owed the money after being threatened with legal proceedings.
Michael Chua, his wife Tan Kah Luan and mother Yeo Siok Boi were ordered to pay his former employer Mudajaya Corporation Bhd the judgment sum by Judge Choo Kah Sing after they admitted they owed the company RM65 million in a settlement arrangement, online news outlet Free Malaysia Today reported today.
The High Court found that Chua, his wife and mother had benefited from secret profits amounting to RM65 million, which were generated from overcharging subcontractors on a RM720 million power plant project.
Additionally, Chua, his wife and mother were also ordered to pay interest on the judgment sum at a rate of 5 per cent per annum as well as costs of RM500,000, the FMT report was quoted as saying.
Despite the difficulty in determining the exact amount of the secret profits, the court upheld a settlement agreement where the trio admitted to owing Mudajaya RM65 million. This agreement involved the transfer of 22 properties to the company, the report was quoted as saying.
The court rejected the trio’s claims of coercion, duress, and undue influence in signing the settlement agreement.
It also dismissed their argument that the value of the debt was unspecified in the property transfer documents.
While the total amount of the secret profits could not be accurately determined, the court found sufficient evidence of unauthorised payments and misappropriation of funds.
As a result, the court rejected the defendants’ counterclaim aimed at invalidating the property transfer.
Mudajaya, the primary subcontractor for a RM720 million power plant project in Manjung, Perak, had hired a spun piling contractor and paid invoices with inflated charges. This contractor then invoiced three subcontractors, with the amounts set by Chua.
In essence, all progress claims submitted by the subcontractors to Mudajaya were inflated, either by manipulating rates or quantities to mislead the company. The extra funds, referred to as “off-book” money, were directed to Chua or third parties as per his instructions.
The judge also found no evidence supporting Chua’s claim that he had returned the excess funds to Mudajaya.
Both Mudajaya and the trio have filed appeals against the High Court’s decision.
