Court allows pre-trial discovery in RM3.53mil dealership fraud suit

Kuala Lumpur High Court judge Leong Wai Hong said his ruling did not determine whether fraud had occurred because that issue will only be decided at the trial scheduled later in the year. (Reuters pic)KUALA LUMPUR: A businessman seeking to recover RM3.53 million allegedly lost in the fraudulent sale of his Proton dealership has secured a court order compelling a group of companies and people to disclose extensive financial and corporate records ahead of trial.High Court judge Leong Wai Hong allowed Teo Yun Hock's application for discovery, saying the documents sought were relevant and necessary to trace the alleged movement of funds through a network of companies linked to the defendants.However, he said the ruling did not determine whether fraud had occurred because that issue will only be decided at the trial scheduled later in the year.Teo claims he sold his Proton 3S dealership, Autohome Motor Sdn Bhd, for RM6.48 million in 2021 to the second defendant - one of the firms - but is still owed RM3.532 million.He alleges that the third defendant, Sheikh Azli Sheikh Nasimuddin Kamal, diverted company funds and obtained financing by using the dealership's assets through a network of related companies instead of paying the outstanding purchase price.The case has a total of 18 defendants and they all deny the allegations.Ahead of the fraud trial, Teo sought bank statements, loan agreements, records of payments from the defence ministry, board minutes, inter-company transfer records and communications between the defendants.The defendants opposed the application, arguing that the requests were irrelevant, unnecessary and amounted to a "fishing expedition".Leong rejected those arguments, holding that where fraud is alleged, courts should permit broad discovery if the documents are needed to trace the movement of money.He also clarified that an application for discovery must satisfy four requirements: the documents must be identifiable, relevant, in the opposing party's possession or control, and necessary for the fair disposal of the case or to save costs.