Caely sues former MD, 11 other shareholders for allegedly misappropriating RM31 mil

KUALA LUMPUR (Aug 26): Lingerie maker Caely Holdings Bhd has filed a lawsuit against its former managing director, Datuk Chuah Chin Lai, and his wife Datin Fong Nyok Yoon to recover allegedly misappropriated funds amounting to RM30.55 million.

Caely, together with its wholly owned subsidiary Caely (M) Sdn Bhd (CMSB), also sought exemplary damages from the duo for alleged breach of fiduciary duty during their tenure as directors in both companies.

Apart from Chuah and Fong, Caely and CMSB also took legal action against 10 other defendants, namely Goh Choon Kim, Chin Boon Long, Chong Loong Men, Leong Seng Wui, Kok Kwang Lim, Valhalla Capital Sdn Bhd, Hong Seng Capital Sdn Bhd, Goh Choon Heng, Luhur Sejahtera Sdn Bhd and Zaidi Zainudin.

The group sued these 10 other defendants for their conspiracy with Chuah and Fong to cover up the misappropriation and breach of fiduciary duty.

Caely alleged that the defendants had leveraged their shareholdings and voting powers, tried to stultify further and in-depth investigation by attempting to remove the current directors and appointing their nominees to the board of directors.

As of May 25, Choon Kim owned a 21.05% stake in Caely, while the other nine defendants collectively owned 15.92%, the group's statement of claim showed.

Chuah had a 5.66% stake in Caely, and was the group's MD between October 2002 and April 2021, while Fong owned 7.4%. She is still sitting in the board of directors as a non-executive director.

Fong has been a director of Caely since October 2002. She was the group's executive director from December 2020 until March this year.

Together with Chuah and Fong, the group of defendants owned a total of 50.01% ownership in Caely.

Caely is also seeking damages from the 10 defendants, and a permanent injunction to restrain them from calling further extraordinary general meetings to take over the board of directors, and impede the progress of investigation into the misappropriation of funds as well as breach of fiduciary duty.

Caely alleged that Chuah and Fong had used a number of nominees and companies as their manipulative devices to systematically misappropriate funds from CMSB through several transactions.

Caely said its board of directors discovered that among these transactions, there were total payments of RM15.52 million to CMSB's former lorry driver Suhaimi Hussain, RM2.51 million to Chuah's sister-in-law Ong Bee Ling, RM1.22 million to Mutiara Intra Timur Sdn Bhd's company secretary Lim Yeng Poh, RM1.09 million to Chuah and Fong's personal driver Baharuddin Ahmad, and RM500,000 to Chuah's personal friend Lee Yit Leong.

Other payments included RM4.19 million to Mutiara Intra Timur, RM3.69 million to Fong herself, RM867,000 to Chuah himself, RM328,000 to CMSB's security guard Mohamad Hamdan Mokhtar, RM316,000 to CMSB's manager Norkhan Mat Isa, and RM317,000 to Compact Ecology Sdn Bhd, a company jointly owned by Chuah and Fong.

It is worth noting that Caely has been seeing a slew of shareholding changes recently, with businessman Datuk Seri Tee Yam @ Koo Tee Yam accumulating shares, raising his ownership to 19.12% while former executive chairman Datuk Wira Ng Chun Hau's stake dropped below the 5% threshold and ceased to be a substantial shareholder.

Caely's share price closed unchanged at 30.5 sen on Friday (Aug 26), giving it a market capitalisation of RM78.76 million.