Illegal forex deal: Director is fined

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.

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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.

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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.

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