Defendant Chong Ket Pen (left) and son Chong Ther Nen (right), attending Kuala Lumpur High Court on 20 January 2020.

20 January 2020. Kuala Lumpur, Malaysia: Bursa Malaysia Public listed Protasco Bhd's Chong Ket Pen (Chong), the defendant named in Global Capital Ltd (GCL) RM368 million civil suit against the executive director for alleged abuse of power, breach of contract and missed of profit guarantees, attended Kuala Lumpur High Court today.

The suit number “KLHC Suit No. WA-22NCC-465-10/2018 [Global Capital Ltd v Dato' Sri Chong Ket Pen]” revolves round the approach and invitation of Chong for the entry of GCL into buying Protasco shares in 2012 after Chong signed an agreement on 3 November 2012 promised to cause Protasco to commit on a planned oil and gas foray and a profit guarantee for the next four years. In 2012, Protasco announced that it was buying a 76% in PT ASI for USD55 million (RM168 million : 2012 Dec forex). However, on January 2014, the deal was further replaced with second agreement to buy 63% stake in PT Anglo Slavic Indonesia (PT ASI) for US$22 million (RM73 million : 2014 Jan forex). The deal was subsequently being terminated in year 2014.

In a statement of claim filed at the High Court in Kuala Lumpur, the Indonesia-based company is claiming RM368 million from Chong, including loss of investment and future profits for the stake in Protasco; loss of margin to finance the acquisition of shares up to RM75 million; liability of US$55 million (RM228.5 million) to PT Anglo Slavic Utama (PT ASU), as guarantor for Chong pursuant to the investment guarantee agreement; as well as RM65 million as payment for the profit guarantee under the investment guarantee agreement.

To recap, GCL acquired a 27.11% stake in Protasco in November 2012 through its representatives for RM96.52 million or a 33% premium over the market price. The "pricey" deal was done on the assurance of Protasco's planned venture into the oil and gas sector.

GCL alleged that Chong failed to ensure that Protasco was profitable, with a profit before tax of RM30 million and RM35 million in the third and fourth year under the investment guarantee agreement. A total of RM110 million profit was guaranteed over the four years.

Protasco's earnings have been falling since 2015. For the six months to June 30, 2018, it swung into the red with a net loss of RM3.1 million against a net profit of RM11.2 million in the same period last year, dragged by lower contribution in the property development, education and construction segments.

Dato' Larry Tey Por Yee and Dato' Adrian Ooi Kock Aun, both representatives of GCL, first came under the limelight in 2014 on allegations of criminal breach of trust due to the non-disclosure of interest in a transaction involving RM85 million. However, after a long legal tussle with Protasco Bhd, its former director Tey and his associate Ooi have been acquitted by the Shah Alam High Court on 28 March 2019.

In the current suit, GCL alleged that Chong entered into business transactions and decisions on operation, remuneration, payments of dividends and salaries for his own benefit at the expense and the best interests of the company.

According to Protasco's latest annual report, Chong raked in RM2.41 million remuneration in 2017. Protasco debt has been ballooning after Chong pushed away Tey and Ooi in year 2014. Protasco latest 3rd quarter 2019 report shows RM728 million total liabilities compared to 3^rd quarter 2014 report of just RM442 million total liabilities. Protasco latest equity stood at RM355 million, with total liabilities more than 200% of equity.

Chong was holding direct and indirect a 15.5% stake in Protasco when Tey and Ooi acquired the 27.11% Protasco shares in December 2012. Chong was a director since May 2001 and was appointed as executive vice-chairman and managing director in February 2013, or 2 months after Tey and Ooi took over Protasco shares.

During the period where Protasco loaded close to RM300mil total liabilities, Chong has accumulated a 16.91% direct and a 10.31% indirect stake in the company.

Biznews Report

Relevant: https://klse.i3investor.com/blogs/protascofraudsued/2020-01-21-story-h1482870669-Protasco_Bhd_s_MD_sued_for_RM368m_claims_is_on_trial_today_20_January_2.jsp

Royalty Photo Footage

RM368 million Indonesia oil deal case suspect Dato Sri Chong Ket Pen in Kuala Lumpur High Court, 20 January 2020.

RM368 million lawsuit suspect Dato Sri Chong Ket Pen in Kuala Lumpur High Court, 20 January 2020.

RM368 million lawsuit defendanrt Dato Sri Chong Ket Pen trialed in Kuala Lumpur High Court, 20 January 2020

Protasco Bhd RM368 million oil deal case suspect Dato Sri Chong Ket Pen in Kuala Lumpur High Court, 20 January 2020.

Protasco Bhd executive director's RM368 million Indonesia oil deal civil claims defendant Dato Sri Chong Ket Pen in Kuala Lumpur High Court, 20 January 2020.

Global Capital RM368 million civil suit claims on Indonesia oil deal fallout. Defendant and key suspect Dato Sri Chong Ket Pen in Kuala Lumpur High Court, 20 January 2020.

RM368 million Protasco Bhd oil deal law suit defendant Dato Sri Chong Ket Pen trialed in Kuala Lumpur High Court, 20 January 2020.

RM368 million legal suit defendant Dato Sri Chong Ket Pen attending trial in Kuala Lumpur High Court, 20 January 2020.

Dato Sri Chong Ket Pen attending trial in Kuala Lumpur High Court on RM368 million Protasco Bhd oil deal lawsuit, 20 January 2020.

Protasco Bhd new MD, Kenny Chong Ther Nen, the RM368 million lawsuit defendant son.