in the court of appeal malaysia (appellate jurisdiction)

(2) charging to the Petitioner the salaries of three
staffs of the 2 nd Respondent; and
(3) Using the Petitioner’s staff to look after the affairs
of the 2 nd Respondent’s store in Lawas, Sarawak
(1) RM3.78 million loan and interest charged
The books of the Company showed that the 2 nd Respondent had
advanced to the Company the sum of RM3.78 million as on 31
May 2003 but this was queried by the Petitioner and also
queried was the rate of interest charged. This resulted in the
appointment of Ernst & Young, a firm of auditors, to verify the
matter and the firm came back with their report on 17
September 2004 after the petition was filed. The report was of
the view that of the alleged RM3.78 million loan, the sum of
RM861,366.35 was not supported by any verifiable documents.
But it was recorded in the minutes of the Company’s board
meeting held on 10 November 2005 that Liew Tuck Wah, the
area manager of the Company, “had furnished all the
documentation to Ernst & Young to provide him with a written
confirmation that the amount of RM861,000/- had been
reconciled in the year 2004”. When Liew Tuck Wah testified,
he was not questioned as to his said assertion in the board
meeting that the sum had been reconciled and as to how it was
reconciled. What is established at most was that there was
some accounting deficiency, in that credits and debits were
raised without the usual consent or the necessary supporting
documents, and not that there was any attempt on the part of
any of the Respondents or any of them to inflate the amount of
the indebtedness so as to siphon the money of the Company
away. It was not suggested to any of the witnesses who
testified on behalf of the Respondents and neither did the
auditor’s report so suggest. However, whether the sum of
RM861,000 had been reconciled as asserted by Liew Tuck Wah
depends very much on the auditor’s confirmation for which
Liew Tuck Wah was supposed to obtain for tabling at the next
board meeting. There is no evidence as to whether the auditor
will or will not confirm the reconciliation. Given the manner in
which the accounts were kept and kept by the same internal
accountant working for the Company, the 2 nd Respondent and
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