Amin Shah and the Singapore-Batam ferry

From time to time two parties fight it out in the court room, a good moment for outsiders to get a glimpse of what is going on behind the Malaysian scenes.

In Singapore, a judgment  has been made on August 3, 2012, in a case between Chenet Finance Ltd and (Allene) Lim Poh Yen and others. This article can be found on the website of the Singapore Law Watch. The article is 82 pages, and it will be revealing what was all going on in this case. I recommend the reader first to skip to page 78-80, for a description of the people and companies involved.

Shares held on other people's names, a "sham transaction", a valuation that didn't make any sense at all, a former mistress, a bankrupt, a BVI company, and even allegations of physical and verbal abuse and money laundering.

Needless, to say, something was bound to go wrong, and that was exactly what happened. A messy affair, giving the readers a rare opportunity to peek in this world of business.

Some snippets: 

Berlian’s main business is the operation of the ferry route between HarbourFront Centre in Singapore and Harbour Bay Terminal in Batam (an island of the Republic of Indonesia), over which it enjoys a monopoly.

The shareholders of Berlian are Chenet (88.9%), Abu Bakar (9.6%) and others (1.5%).

Each of the defendants alleges that the true beneficial owner of Chenet is Tan Sri Amin Shah ("Amin Shah").

It was not really disputed that Chenet acts on the wishes of Amin Shah, irrespective of the true identity to the beneficial owner of Chenet, although Eranur Shahda ("Eranur"), Amin Shah’s daughter, sought to suggest that an uncle was in control of the Trust together with Amin Shah.

Amin Shah was made a bankrupt in Malaysia by order of court on 9 October 2007.

Chenet gave notice to Berlian that it wished to transfer the Shares to Hopaco for $2.2m (a rather surprising valuation, since the net profit in 2008 was $5.8m, an accountant valued the company in 2011 on $15.8 million).

At Amin Shah’s behest, his good friend and fellow Malaysian businessman Andrew Lee Choong Lim ("Andrew Lee") further injected a sum of $2.5m into Berlian, and also assumed its debts of $1.8m. In return, Andrew Lee received 55% of Berlian’s shares. However, at that time, Andrew Lee did not wish to hold the Berlian shares in his own name, so he accepted Amin Shah’s recommendation of a loyal servant – Abu Bakar – to act as his nominee. According to Amin Shah, that was how Abu Bakar, a man of little means, came to hold those shares registered in his name, and that also explained why he was made the Chairman and a director of Berlian. Abu Bakar was further made a guarantor for the loan.

Sometime in early 2009, Amin Shah decided that Chenet should transfer the Shares to Hopaco, a company owned by Andrew Lee. The idea was that Andrew Lee’s high net worth would be enough to comfort Caterpillar. The initial plan devised in early May 2009 by Amin Shah’s Malaysian lawyer Thanggaya was to have a loan agreement under which Hopaco would purportedly lend $2.2m to Chenet, with the Shares acting as security.

The loan agreement would be backdated to 19 April 2007 and Chenet would then "default" on the loan in 2009, resulting in the transfer of the Shares to Hopaco.

Eranur (Amin Shah's daughter) admitted on the witness stand that it was not meant to be a genuine transfer:

Court: [The transfer to Hopaco] is not supposed to be a true transaction, it was meant to be a sham transaction because Hopaco is not supposed to be the real owner of the shares. It’s just supposed to show to Caterpillar that now one of our shareholders is Hopaco, who has got a high net worth individual, [Andrew Lee].

A: Yes.

Court: So even this 2.2 million deal is not really meant for Hopaco to acquire the shares, but it’s just a sham to satisfy Caterpillar’s enquiry.

A: Yes.

Abu Bakar accepted that he had once worked as a technician with the Federal Employee’s Provident Fund (EPF) for a salary of RM1,000/month.

Abu Bakar gave evidence of companies which he had incorporated. The first, Atlantic Range Sdn Bhd, was incorporated in 1991 with a paid up capital of RM1m.

When questioned about where he had got the RM1m from, he answered that the money was from his profits from brokering contracts through his political contacts.

He also started two other companies – Integrated Maker Sdn Bhd in 1993, with a paid up capital of RM1m; and Integrated Steel Industries Sdn Bhd in 2000, with a paid up capital of around RM20m.