Also seized were their fishing boat and 20 tonnes of giant clam shells all worth about RM1.2million.
State Commissioner Police Datuk Hamza Taib said the men, aged between 20 and 40, were detained under Section 168 of the Land Ordinance (Cap 68) for harvesting corals without permission from the State Government and could face a fine of RM100,000 or a period of up to five years prison if convicted.
He said a team from the Kota Kinabalu Marine Police patrolling the area located one nautical mile south off Pulau Mengalum, chanced upon the fishing boat with the 42-year-old skipper and his eight crew on board at about 10.30am that day.
"Further inspections led to the discovery of the giant clam shells worth about RM400,000 or RM200 per kilo," he told a media conference at the Kota Kinabalu Marine Police base, Monday.
The men and the seized items were brought back to the marine police base and referred to the Land and Survey Department for further action, adding that this was the first such arrest in Sabah.
"These are protected species and I was made to understand that nine out of ten such giant clamshells in the world can only be found in Sabah.
"This is our sea heritage and by the end of the day, we will be left with nothing if we allow this to go on.
I urge the local community, particularly those staying near the islands, to channel any such information to the police so that action can be taken to stop it," he said.
Information from intelligence showed that the group worked as fishermen in a joint venture business between a local company and a Vietnam based company.
It was also believed that they used the fishing boat to reach shallow waters where they would harvest the giant clam shells, supposedly without the boat owner's knowledge. The giant clam shells are believed to have been sold directly to Vietnam or via ships sailing through the area and believed to be used for medicine, cosmetics and jewellery.