Thursday, August 02, 2012

Silver Bird Sues Its Former Directors

Another lawsuit has been filed. This time it is Silver Bird who is suing its former excutive directors.

  • Silver Bird sues former executives for RM125m fraud Posted on 1 August 2012 - 11:42pm
    Last updated on 2 August 2012 - 02:16am

    PETALING JAYA (Aug 1, 2012): Silver Bird Group Bhd and its subsidiaries, Stanson Marketing Sdn Bhd and Standard Confectionery Sdn Bhd, have lodged a lawsuit against its former group managing director, executive director and eight others alleging, among others, breach of fiduciary duties, breach of duty of fidelity and loyalty, abuse of power, conspiracy to commit fraud and for facilitating misappropriation of funds.

    The bread maker filed the RM125 million suit in the Kuala Lumpur High Court yesterday, and case management is fixed for Sept 3.

    The suit claims Datuk Jackson Tan Han Kook, Ching Siew Cheong and Lai Poh Mei had breached their fiduciary duties as group managing director, executive director and general manager of accounts and finance of the three companies, respectively, and is seeking to collect damages caused by their action to be assessed.

    The suit is also seeking a declaration that one of its defendants — Asia Food Link Sdn Bhd — had allegedly made fictitious sales of sweetened creamers amounting to RM44.287 million to Stanson Marketing and as such, it is not entitled to claim the sum of RM44.188 million from it.

    A declaration is also sought that the purported purchase of machinery for a new bread line by Lai from Triremis (M) Sdn Bhd and Triremis Asia Sdn Bhd for RM25.8 million is fictitious and non-existent.

    Asia Food, Triremis (M), Triremis Asia and Bill Davis & Associates Sdn Bhd are also alleged to have knowingly received payment out of the funds of Silver Bird and its subsidiaries, which were misappropriated by Tan, Ching and Lai in breach of the duties owed to the the three companies, among others.

    Apart from the seven defendants, the suit is also seeking a declaration that external auditor Crowe Horwath and internal auditors — Audex Governance Sdn Bhd and Focus Internal Audit Solutions — had conspired to defraud Silver Bird, Stanson Marketing and Standard Confectionery in reckless disregard of the interests and/or to injure the interests of the three companies.

    "The company will make the necessary announcements on further developments of the matter as and when necessary," said Silver Bird in a filing with Bursa Malaysia yesterday.

    On Tuesday, Ching had taken legal action against Silver Bird and its directors for alleged wrongful termination from the group and is seeking damages for alleged slander against him.

    However, in his statement of claim served to Silver Bird, Ching had clearly admitted that he, in his capacity as then executive director, had "dressed up" the financial accounts of Stanson Group from 2003 till 2010, albeit allegedly under the instructions of Tan, who he stated had a gambling addiction.
    In one paragraph, Ching had admitted to inflating the assets of Stanson Group by some RM31 million and by adjusting a combined loss of RM15 million for the period 2002-2004 to a profit of RM16 million

    He further stated that the "dressing up" of the accounts was divided between himself and other senior management staff.
This is a good development. Sue them for fraud!