ACE Holdings is embroiled in legal turmoil as it faces action from the Securities Commission Malaysia regarding its attempted takeover of Apex Equity Holdings Bhd, alongside multiple lawsuits from investors dissatisfied with unmet investment returns.
KUALA LUMPUR (May 11): The list of investors pursuing legal action against ACE Holdings Bhd for failing to fulfill promised investment returns continues to expand, with another investor initiating a lawsuit seeking nearly RM8.3 million in damages from the company.
The plaintiff, who has chosen to remain anonymous, filed the suit in April against ACE Credit Sdn Bhd, a subsidiary of ACE Holdings, and two of its directors. The plaintiff alleges that she entered into four agreements with the company in 2019, committing a total investment of RM7 million. According to the statement of claim obtained by The Edge, the plaintiff was assured an annual return of 12% on her investment.
However, ACE failed to honor its commitment, prompting the plaintiff to exercise her right to early termination. The statement of claim highlights that ACE presently lacks a valid moneylending license as mandated by the Moneylenders Act 1951.
The plaintiff argues that the agreements stipulated ACE must maintain a valid license throughout their term, constituting a fundamental basis for the investments. Furthermore, ACE’s failure to renew the license constitutes a material breach of the agreements.
On March 8, the plaintiff’s solicitors, Messrs Haris Ibrahim Kandiah Partnership, issued a notice to ACE, outlining the defaults and breaches and granting them a 14-day window for rectification. ACE allegedly did not respond to the notice, leading the plaintiff’s solicitors to terminate all four agreements on March 24.
In correspondence dated April 24, ACE informed Messrs Haris Ibrahim Kandiah Partnership of ongoing efforts to finalize restructuring plans, citing negotiations with new partners and relevant parties. However, the plaintiff discovered ACE faced similar lawsuits from other investors, indicating a pattern of non-compliance.
The plaintiff contends that the two directors of ACE are central to the company’s operations and are involved in fraudulent activities targeting investors. Consequently, she seeks to pierce the corporate veil to hold the directors personally liable.
Additionally, the plaintiff seeks various reliefs, including general, punitive, and exemplary damages. Eugene Jayaraj, the plaintiff’s lawyer, informed The Edge that ACE and its directors are yet to respond to the lawsuit, with a deadline of May 16 for their appearance.
Efforts to serve the directors personally have been unsuccessful, prompting the plaintiff’s legal team to seek alternative methods. The next case management hearing is scheduled for May 24 to address the status of serving the directors.
Earlier, ACE Holdings filed a petition for judicial management, slated for a hearing on May 17. Judicial management serves as a corporate rescue mechanism for companies facing financial distress, allowing the appointment of a judicial manager.
ACE Holdings seeks the appointment of Datuk Robert Teo Keng Tuan from RSM Corporate Restructuring (Malaysia) Sdn Bhd as its judicial manager, with a proposed six-month period for judicial management. The company also seeks a stay on winding-up proceedings and enforcement actions during this period.
TheEdge previously reported on ACE Group’s mounting legal challenges and investor dissatisfaction.
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