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Illegal forex deal: Director is fined

Published on: Wednesday, February 07, 2007


Kota Kinabalu:
A company director was fined RM2,000 or three months' jail by the
Magistrate's Court here Tuesday for illegal involvement in a foreign
exchange (forex) deal with a foreign firm three years ago. Local Jeffary Mudi, 35, of Asset Forrich Sdn Bhd (AFSB), admitted
before Magistrate Azreena Aziz to committing the offence between Jan.
10 and May 20, 2005 at Lot A1202-7-11, 12th floor, Wisma Merdeka, here.
The company was also ordered to pay RM2,000 fine for the same offence. Mudi admitted to having been involved in the forex deal, without the
permission from the Foreign Exchange Controller, with a New Zealand
firm, Goldex Equities Limited, whose registered address was Level 2,
Windsor Court, 128-136, Parnell Road, Auckland. Mudi and the company had committed an offence under Section 4(2) of the
Foreign Exchange Control Act 1953 (Act 17) read with para 9(b), Section
2, fifth Scheduled of the same Act, which is punishable under para
7(2), Section 2, Fifth Scheduled of the same Act. The charge carries a maximum of RM10,000 fine or up to three years' jail, or both, on conviction. Prosecuting officers Anthony Kularaj Kulasingam and Jasmina Mohd
Mokthar appeared for Bank Negara Malaysia (BNM) while Mudi was
unrepresented. Kulasingam told the court that a team of BNM investigation officers
raided the AFSB premises on May 20, 2004 after receiving information
about the company conducting foreign currency business illegally. The team seized documents and related office tools when the company
failed to produce any permission or authorisation for the business from
the Forex Controller. Kulasingam said the trading licence issued by City Hall showed the
company conducted "business managing services, computer software and
hardware suppliers" and that Mudi was the company's director. Investigations revealed that AFSB had been appointed by Goldex Equities
Limited (GEL) as an agent and had been authorised to, among others,
attract investors into the business. It was also to conduct training and briefing to new employers and the
investors regarding the business to enable them to carry out trading at
the AFSB premises. AFSB was also to provide business equipment such as computer, computer
software and other online equipment at its premises so that the
investors conduct trading through GEL website. It was also allowed by GEL to provide administrative facility such as
opening a trading account, depositing money in GEL agent's account,
issuing user ID and password as well as GEL official receipt. Kulasingam further told the court that investors could carry out
trading in several foreign currencies such as Swiss France, Japanese
Yen, Euro Dollar and Great Britain Pound offered by GEL. Further investigations had proved that the seized documents and office
equipment including computer had connection with purchasing and selling
foreign currency activity. The court was told that search at the Foreign Exchange Administrative
Department, BNM found that AFSB had not obtained any authority or
permission to conduct such activity from the controller, Governor of
Bank Negara Malaysia.