Linear Corporation Bhd has not authorised a law firm here or in Sweden to file a notice of suspicious activities with the Swedish Financial Supervisory Authority (FSA), involving possible fraud committed against its subsidiaries.
In a statement to Bursa Malaysia Securities yesterday, the company said it had received an email on Wednesday from the law firm, Messrs Sivananthan, acting on behalf of its former director Alan Rajendram, about an alleged fraud totalling US$8.09 million (RM26 million) committed against its subsidiaries, LCI Global Sdn Bhd and Imux (Asia) Ltd.
Linear was responding to a news report yesterday that four parties — LCI, Imux, Alan and his private vehicle Stanton Technologies Ltd — had lodged a report with the Swedish police after losing US$65 million due to fraud allegedly committed by a Swedish Financial Credit Union known as Prime Savings and Trust Ekonomisk forening (PST).
Linear said it had neither knowledge of Datuk N Sivananthan’s purported appointment by Alan Rajendram nor had it approved of the counsel’s actions in Malaysia and Sweden in purportedly acting for its subsidiaries.
Linear was also informed that Sivananthan had through his Swedish solicitors, Advokatfirman Lindahi KB, filed a notice of suspicious activities with the FSA on the matter, as it needed to be investigated.
“The board of Linear has not authorised... the alleged filing of action in Sweden by the Swedish solicitors as alleged by Datuk Siva,” Linear said, adding that the company, through its solicitors, would be writing to Alan Rajendram to obtain further particulars of the claim of the fraud.
Linear reiterated that it had made an announcement to Bursa Securities on June 21, 2010 that “a sum of RM36 million has been advanced by LCI to Global Investment Group Inc (GIG) in relation to the King Dome Project as a result of actions by a director who acted on his own without the board’s approval”.
It said the funds for the King Dome project were paid out from two accounts in PST where the alleged fraud was claimed to have been made.
Linear said Alan Rajendram had at a board meeting on May 18, 2010 confirmed that he had committed RM36 million to GIG.
It said this was later confirmed in his letter of indemnity dated June 17, 2010 to Linear, agreeing to fully indemnify the Linear group and directors to the full extent of RM36 million in the event he failed to deliver the King Dome project by Linear by Nov 30, 2010.
“The accounting records of both the subsidiaries reflect that whatever monies that were recorded in the PST accounts have been wholly paid out on the instruction of Alan Rajendram to GIG as performance consideration sum in respect of the award of contract for the district cooling plant in relation to the King Dome project,” Linear said.
This article appeared in The Edge Financial Daily, July 23, 2010.
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