Imagine losing millions because someone you trusted allegedly abused their power. That's the situation Microlink Solutions Bhd finds itself in, as they're suing their former CEO for a staggering RM38.7 million!
Microlink, a company specializing in digital banking solutions, is taking Chia Yong Wei to court over accusations of fiduciary duty breaches and outright fraud. The lawsuit, filed in the Kuala Lumpur High Court on Friday, alleges that Chia's actions caused significant financial losses and harm to the company. Microlink and its subsidiary, Microlink Innovation Sdn Bhd, are seeking US$9.39 million (RM38.74 million) in damages.
Specifically, the company claims Chia is guilty of fraudulent misrepresentation and breach of trust related to company funds and operations. They are demanding a court declaration confirming his guilt, payment of the nearly US$10 million in damages, and additional punitive damages, plus coverage of their legal expenses, which could be substantial. Think of it as adding insult to the (already potentially devastating) injury!
But here's where it gets controversial... These are, at this point, just allegations. Chia Yong Wei hasn't yet had his day in court, and he hasn't publicly responded to the suit. It's crucial to remember that everyone is presumed innocent until proven guilty. This legal battle could drag on for months, even years, before a final verdict is reached.
Chia served as Microlink's CEO for over six years, from his appointment in March 2016 until his departure in September 2022. He's since been replaced by Ramlee Abdullah. During Chia's tenure, Microlink navigated a dynamic period, eventually transitioning to the Main Market of Bursa Malaysia in 2023. Interestingly, around the same time, Insas Bhd emerged as Microlink's largest shareholder, acquiring a substantial 29.81% stake in July 2023, boosting their total ownership to 32.89%.
Financially, Microlink has experienced mixed fortunes. According to AskEdge data, the company has been profitable in four of the last five financial years. And this is the part most people miss... However, a recent extended 15-month financial year (ending June 30, 2025, due to a change in their financial year end), revealed a net loss of RM95.77 million on a revenue of RM413.01 million. This raises questions about the company's recent performance and whether the alleged actions of the former CEO contributed to these difficulties.
The market has reacted to the news. Microlink shares closed at nine sen on Friday, a 5.26% drop, giving the group a market capitalization of RM144.77 million. The stock has plummeted by over 62% year-to-date, indicating significant investor concern.
This begs the question: What responsibility, if any, does a CEO have for the long-term financial health of a company after they leave? Is it fair to hold them accountable for decisions made years prior, especially if market conditions or other factors have changed? Is the timing of this lawsuit – after Chia's departure and a period of financial losses – purely coincidental, or is there more to the story? What are your thoughts? Share your perspective in the comments below!
