Mudajaya wins appeal, court raises compensation to RM72.2 mil in fund misappropriation case

KUALA LUMPUR (April 20): Mudajaya Group Bhd (KL:MUDAJYA) has secured a favourable ruling from the Court of Appeal in its fund misappropriation case against former employee Michael Chua Khian Keng, with compensation increased to RM72.2 million from the earlier High Court award of RM43.5 million.

In a Bursa Malaysia filing on Monday, the construction group said the appellate court ruled it is entitled to its primary claim and reliefs sought, with the revised award subject to deductions for sums already recovered.

The case stems from legal proceedings against Chua and his wife, Tan Kah Lua, over alleged misappropriation of funds linked to a RM720 million power plant project awarded in June 2011.

Delivering its decision on Monday, the Court of Appeal allowed Mudajaya’s appeal with costs of RM150,000, while dismissing Chua’s appeal with costs of RM50,000.

Despite the higher award, Mudajaya said the ruling is not expected to materially impact earnings for the financial year ending Dec 31, 2026 (FY2026), until the judgement sum, interest, and legal costs are fully recovered.

The group added it will provide further updates to Bursa Malaysia as developments arise or upon receiving additional court directions.

The dispute dates back to 2015, when an internal management working group conducted a review of additional costs incurred on a project disclosed in the group’s fourth quarter results for FY2014. Announced on Feb 27, 2015, the review uncovered irregular transactions that contributed to the cost overruns.

Mudajaya noted that findings from the internal investigation indicated the issue was isolated, involving a single former employee and confined to one project.

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