PUTRAJAYA: The Court of Appeal has upheld a High Court ruling ordering two former Protasco Bhd directors to pay the company RM84.64 million in damages over a fraudulent US$27 million investment in an Indonesian oil and gas venture.
A three-member bench chaired by Justice P Ravinthran found no basis to overturn the High Court’s ruling that Tey Por Yee and Ooi Kock Aun had breached their duties as directors and fraudulently induced Protasco into the investment.
The High Court had found that the pair concealed their beneficial ownership of companies involved in the deal and diverted the US$27 million paid by Protasco through entities under their control.
However, the trial court declined to award exemplary and aggravated damages, prompting Protasco’s cross-appeal.
In the 38-page written judgment released yesterday, Ravinthran dismissed the appellants’ contention that they were denied a fair trial because the trial judge issued brief oral grounds and then released a detailed written judgment two months later.
“In the circumstances, there was no breach of the principles of natural justice or failure to accord a fair trial to the parties,” Ravinthran said, sitting with Justices Choo Kah Sing and Ahmad Fairuz Zainol Abidin.
The appellate court also rejected the argument that the High Court’s 11-page oral grounds constituted the final judgment, holding instead that they were merely broad reasons preceding the comprehensive written judgment.
“We disagree that the trial judge had supplemented the first 11-page brief oral grounds with the second 196-page judgment,” he said, adding that the principle of functus officio had not been breached.
“It bears repeating that at the heart of Protasco’s case was the contention that the appellants failed to disclose the material fact that they had beneficial ownership or exercised control over PT Anglo Slavic Utama and the other companies.”
The court also found that the appellants had ample opportunity to challenge the allegations during the 42-day trial and could have sought further details earlier if they found the pleadings unclear.
The dispute stemmed from Protasco’s investment in PT Anglo Slavic Indonesia, which held interests in an oil and gas concession in Aceh, Indonesia.
Protasco claimed it was induced into investing after being led to believe the project would secure a long-term extension of its production rights and that shares in another Indonesian company provided adequate security.
The High Court found that Tey and Ooi had secretly controlled PT Anglo Slavic Utama, PT Anglo Slavic Indonesia and several related entities, failed to disclose their interests while serving as Protasco directors, and caused the US$27 million paid by Protasco to be diverted through companies under their control.
It also dismissed Protasco’s cross-appeal, leaving intact the High Court’s refusal to award exemplary and aggravated damages.
Malik Imtiaz Sarwar, C Vignesh Kumar, R Jayasingam, Lim Yvonne, Rubanyah Sedopathy and Chen Jia Ern appeared for Tey and Ooi, while Peter Skelchy, Joycelyn Teoh, Tan Zhixin and How Chen Hee represented Protasco.
