Court upholds negligence ruling against Hong Leong Bank over seizure order breach
KUALA LUMPUR: The Court of Appeal has upheld a ruling that Hong Leong Bank was negligent in breaching a seizure order under anti-money laundering laws.
This breach resulted in the release of RM1.2 million paid by Ten Jing Enterprise Sdn Bhd to the insolvency department over a decade ago.
The court also affirmed the High Court's decision that the government was not liable for the bank's error.
Justice Ahmad Kamal Shahid, delivering the court's brief grounds of judgment, stated, "The appeals by the bank and the company (Ten Jing Enterprise Sdn Bhd) are dismissed as they have no merit."
The bank had appealed the judgment in favour of Ten Jing and the government, while the company appealed the dismissal of its claim against the government.
The panel, comprising judges S Nantha Balan and Azhahari Kamal Ramli, ordered the bank to pay the company RM30,000 and the government RM20,000 in costs. Conversely, Ten Jing was ordered to pay RM30,000 to the government and RM10,000 to the bank.
The Court of Appeal upheld the High Court's judgment requiring Hong Leong Bank to pay Ten Jing RM1,270,262.15, inclusive of 5 per cent interest from Oct 10, 2018 until the judgment sum is fully settled.
Lawyers V Jeya Kumar, Kee Hui Yee, and Jowyn Saw represented Ten Jing, while Karen Lee and See Yen Lin appeared for the bank. Senior federal counsel Siti Aishah Ramlan and Siti Syakimah Ibrahim acted for the government.
The case arose from a 2012 transaction in which Ten Jing paid RM1.2 million to TS Steel Sdn Bhd for steel supplies that were never delivered.
In early 2013, a seizure order was issued under the Anti-Money Laundering and Anti-Terrorism Financing Act (AmlaTFA) 2001 against TS Steel's assets, including the RM1.2 million deposited in its account with Hong Leong Bank.
After a series of legal battles, the Court of Appeal in 2018 ordered the return of the money to Ten Jing. However, when Ten Jing and the customs department requested the release of the funds, the bank informed them that it had, upon realising a winding-up order had been issued against TS Steel, remitted the funds to the insolvency department.
In 2019, Ten Jing filed a suit against the bank, the government, two customs officers, and the director-general of customs for breach of statutory duty and negligence in failing to preserve the money under the seizure order pending the disposal of proceedings under the anti-money laundering laws.
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