CEO and his wife ordered to pay WRP Asia Pacific RM15.6m for breach of duty

KUALA LUMPUR (Nov 27): The High Court has awarded medical glove maker WRP Asia Pacific Sdn Bhd a sum of RM15.6 million from its chief executive officer Datuk Lee Son Hong and his wife Too Sooi Keng, who are both directors of the company, for breach of their fiduciary duties.

In one of her last judgments before retiring as High Court Judge, Liza Chan Sow Keng ruled on Nov 17 that the pair had breached their fiduciary duties to WRP Asia Pacific under the Companies Act 2016 and ordered the pair to pay the sum, comprising RM13.1 million and a finance charge of RM2.53 million.

She also ordered that interest be charged at 5% per annum from the date of judgment until the full payment of the judgment sum.

Chan made the order after ruling that Lee and Too had funnelled RM13.1 million from the RM32.78 million that was paid by WRP Asia to its glove dipping line contractor, KSG Engineering Sdn Bhd, into Equatorion Sdn Bhd — a company controlled by Too with a 66.7% stake.

The funds were channelled into Equatorium purportedly for the supply of auxiliary equipment to WRP Asia, but no such equipment was provided, causing WRP Asia a loss of RM13.1 million.

In her judgment, Chan said the couple had been found to be in breach of their duties to WRP, which resulted in the company suffering the loss.

“In the face of demonstrably overwhelming evidence, the couple in my view has a case to answer in respect of the fictitious supply of auxiliary equipment by Equatorion through fabricated invoices and receipts, secretly profiting from the sum of RM13.1 million, and gaining a personal benefit from that point through their breaches of duties as directors,” she said.

She also said their fate was sealed when the couple declined to testify during trial, in which 10 witnesses were called.

“The couple irrevocably undermined their position by not testifying. It can be forgiven for concluding that both were avoiding cross examination. It behoves them to give evidence to rebut the plaintiff’s (WRP’s) case,” she said.

Hence, from evidence adduced in the course of the trial, the couple had “undoubtedly personally profited from the KSG transactions”, because a “substantial portion of the money” ended up in Lee’s personal accounts, she added.

“It is a pure and simple case of the proverbial harap pagar, pagar makan padi (rely on the fence, the fence eats the paddy),” Chan added.

Nathalie Annette Kee from Messrs Thomas Philip represented WRP Asia in the case, while Emily Wong from Messrs Wong & Co represented the couple.