15 April, 2023 Kuala Lumpur Malaysia. Details emerge about how YU KUAN HUAT and his brother YU KUAN CHON, leaders of the so-called YU Syndicate and controlling directors and shareholders of YNH Property Bhd (KLSE:YNHPROP) use family members and employees to systematically commit fraud in behalf of the Syndicate. Leaked documents confirm suspicions that secret Joint Venture Agreement and huge deposits of YNH funds for Imaginary future property projects are actually used to embezzled vast sums of money by the organization.
Finding demonstrates that LAU SHENG MING and NGIO YEN LIM, the father of YNH General Manager NGIO HUA JIAN, worked together with CHAN WENG FUI, whom is YU KUAN CHON’s stand-in and Director of YNH public relations. They created bogus Joint Ventures with YNH using shelf companies at the instruction of the members of YNH Property Bhd Board of Directors. These endeavours demanded that YNH prepay the shelf companies with hypothetical future earnings. This technique efficiently avoided regulatory oversight, made it possible to steal substantial sums of money from YNH, and ultimately gave YNH Directors tax-free dividends.
No legitimate businessman would give away huge sums of public capital as profit or deposits for future profits of a Joint Venture that has not even started. In many cases the amounts paid are far above the paid-up capital amounts of these Joint Ventures leaving YNH shareholders with no recourse for recovery when the projects fail to materialize.
Every one of these companies are located at the same address, 91 Jalan PPMP 8, 32040 Manjung, Perek (Location is one of the YNH past developments and home to many of its subsidiary and imaginary project companies).
Each company has the same company secretary (CHENG GHEE CHENG, long time internal YNH COSEC) and is audited by Lee, Yip & Associates ( a company owned by Rapid Synergy Director Lee Chun Weng).
Rapid Synergy Bhd (KLSE:RAPID), like YNH is controlled by YU KUAN HUAT and YU KUAN CHON. Both are Executive directors and combined with others including YNH employee CHAN WENG FUI are the controlling shareholder of both companies.
All of these parties are related and connected persons to YU KUAN CHON and YU KUAN HUAT. Therefore, require appropriate disclosures, reporting and approvals to do business with each other or any related party company.
Although this story is not all of the wrong doing resulting and embezzlement by this group, it accounts for RM138,584,000 of the more than RM 1 billion believed to be the actual amount.
The public record or lack thereof of proves beyond any doubts of the wrong doing by the group of people mentioned in this article. The Annual report of YNH operations for 2021 released in July of 2022 confirms these facts along side documents obtained from SSM and the public record. The following companies and Connected Party Directors were used as corporate vehicles to embezzle at least RM138,584,000:
|Year||Company||JV Deposit Paid||Director and/or Shareholder|
|2007||Irama Gigih Sdn Bhd||RM27,669,000||Ngio Yen Lim & LAU SHENG MING|
|2010||Golden Trio Sdn Bhd||RM34,848,000||Ngio Yen Lim & LAU SHENG MING|
|2011||Trilink Moderate Sdn Bhd||RM10,500,000||Ngio Yen Lim & CHAN WENG FUI|
|2012||Genius More Sdn Bhd||RM65,567,000||Ngio Yen Lim & CHAN WENG FUI|
These companies each received a JV deposit prior to purchasing land for future development. Much of the land was sold to these companies by other members of the YU Syndicate or connected persons to the YU Family.
The deposits paid were far in excess of the value of the land. In the case of Genius More Sdn Bhd, the directors spend RM9 million on property, and then loaned the rest of the money (RM 20 million) to themselves. The next fiscal year the directors wrote off the loans as a loss to the company and kept the money.
In the case of Irama Gigih Sdn Bhd, the directors opened a trading account and used the YNH JV Deposit funds to miniplate the share price of YNH Property. For some reason YU KUAN HUAT and YU KUAN CHON do not disclose that the shares of this company are connected to them even though the Directors are immediate family of YNH employees.
All the properties owned by the companies listed above in this article are listed as a part of the land bank of YNH Property under Joint Venture Deposits paid in the 2021 Annual report issued in 2022. The value of these properties as stated by the Independent Auditor of each company report assrts that are far below the deposits paid with most companies with no cash in the bank. The Independent Auditor of these companies is actually not Independent, so we really don’t know what to believe. Rapid Synergy Director Lee Chun Weng owns the company that provides the Independand Audited reports of each company.
One has to ask the question, why does the YNH Board of Directors instruct its employees and family to open shelf companies and find property to buy to later Joint Venture with YNH? Why pay some future profits that will never materialize in advance of a deal? Who does that in the business world? Keep in mind these 4 companies have had some of these deposits now for at least 15 years with no progress.
I think we all know the answer to that question.
here is a list of the Malaysian laws and acts that would apply against the wrongdoers:
Companies Act 2016:
Section 213: Breach of directors’ duties, such as acting in good faith and in the best interest of the company
Section 228: Misuse of company property, information, or opportunities
Section 230: Disclosure of interest in transactions, property, and offices
Section 446: Fraudulent trading by company officers
Section 591: Failing to maintain proper accounting and other records
Capital Markets and Services Act 2007 (CMSA):
Section 179: Insider trading
Section 182: Market manipulation
Section 188: Fraudulently inducing persons to deal in securities
Section 210: Disclosure of information in the prospectus and annual reports
Section 317: Disclosure of interest by substantial shareholder
Section 369: Offences related to financial statements and reports
Malaysian Anti-Corruption Commission Act 2009 (MACC Act):
Section 16: Soliciting or accepting gratification by an agent
Section 17: Offence of giving gratification by an agent
Section 23: Using office or position for gratification
Income Tax Act 1967:
Section 114: Failure to furnish returns, submit information or keep records
Section 113: Evasion of tax and tax fraud
Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA):
Section 4: Money laundering
In conclusion, this story reveals a complex web of fraudulent activities, embezzlement, and manipulation allegedly orchestrated by YU KUAN HUAT, YU KUAN CHON, and their associates in connection with YNH Property Bhd and related companies. The accused parties have allegedly misused their positions, resources, and relationships to divert significant amounts of money from YNH Property Bhd through a series of undisclosed related-party transactions, ultimately benefiting themselves at the expense of shareholders and the integrity of the Malaysian corporate landscape.
The various activities described in the story potentially breach several Malaysian laws and regulations, including the Companies Act 2016, Capital Markets and Services Act 2007 (CMSA), Malaysian Anti-Corruption Commission Act 2009 (MACC Act), Income Tax Act 1967, and Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA).
As a legal expert would say, it is crucial to emphasize that an in-depth investigation would be necessary to fully determine the extent of the wrongdoings and to gather sufficient evidence to support any legal actions against the individuals and companies involved. If the allegations are proven to be true, it is essential that the relevant authorities take appropriate actions to hold the wrongdoers accountable, protect the interests of shareholders, and uphold the integrity of the Malaysian corporate and financial sectors.
This is the first of a series of articles dedicated to the Joint Venture Deposits paid out in the past 20 years by the YU Brothers to family and connected persons. Stay tuned for more as we investigate the YU Syndicate’s world of Fraud and Fortune as we follow the money!