Following the two instances, the company has put in controls such as having two persons to sign for the release of funds from the offshore account, Linear executive director Yap Chee Keong said.
Linear had told Bursa Malaysia earlier this month that it advanced the RM36 million, or almost all of its cash, to Global Investment Group Inc (GIG) as a performance consideration for a RM1.66 billion cooling tower project in Manjung, Perak.
"The first time the RM36 million was advanced to GIG was at the end of December last year," Linear executive director Mevin Nevis told reporters after the company's annual shareholder meeting in Seberang Prai on mainland Penang.
The closed-door meeting, which lasted not more than 15 minutes, was attended by five shareholders, reporters were told.
When the company's auditors told the board that the money should not have been paid out without the board's approval, the RM36 million was refunded to Linear by GIG in February this year.
"In April this year, Rajendram made a RM36 million payment again to GIG without the board's approval," Nevis said. "He claimed he was under pressure from GIG to move forward with the project."
However, the board had agreed in February that future payments to GIG could not be released without full board approval, a formal contract and an extraordinary general meeting.
Rajendram could not be immediately reached for comment.
Yap said that Linear was now working with Rajendram to either deliver the project or refund the RM36 million by November this year.
Yap, who was appointed to Linear's board last month to turn around the company, described the recent developments as "self-inflicted internal weaknesses which we have addressed over the last two months".
Linear's outstanding loans currently total RM39 million. This is made up of RM18 million in secured and RM21 million in unsecured loans.
It will only take legal action to recover the money from Rajendram if he fails to meet the November 30 deadline, Yap said.
When asked to comment on the fact that both Rajendram and Linear executive director Bryann Pillay had been charged by the Securities Commision with securities fraud involving LFE Corp Bhd, Yap said:
"The company is not related to Linear and we maintain they are both innocent until proven guilty."
As for Linear, it may sell and lease back its main asset, its factory in Prai, to generate cash. That factory has an open market value of RM19 million.
Yap maintained that Linear still enjoyed a good brand name and a favourable order book. He did not elaborate.
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