KUALA LUMPUR: Two founding partners of Kargo Xpress (M) Jets International Sdn Bhd have filed a RM50 million lawsuit in the High Court against MMAG Holdings Berhad (MMAG) and eight others for conspiracy to injure them.
M Gunasekar and Philip Phang are seeking the recovery of their initial investment of RM9.6 million, RM30.5 million in loss of profit, and a further RM9.8 million in lost incentive bonuses. They are also seeking general and aggravated damages.
Apart from MMAG, the suit names Chin Boon Long, Kenny Khow Chuan Wah, Chong Koon Meng, M Jets, R Shanmuganathan, M Saysu, Anton Alex Schubert and JT Aerotech Solutions (JTAS) Sdn Bhd as defendants.
Khow and Chong are directors in MMAG.
Gunasekar and Phang claimed that Chin is a shadow director of MMAG and is its directing mind, alter ego and a person who MMAG, Khow and Chong are accustomed to taking instructions from.
The duo are seeking a declaration by the court that the nine defendants had breached their legitimate expectation of managing and operating M Jets’ business so as to meet its investment targets without interference.
The writ and statement of claim, filed by solicitors Bodipala Ponnudurai De Silva on Monday, also want the court to declare that Shanmuganathan, Saysu, and Schubert had breached their fiduciary duties.
The plaintiffs say they had on Sept 11, 2020 entered a term sheet with Chin to acquire and convert M Jets into a cargo airline with a view to doing business under the name of Kargo Xpress.
They claim Chin acquired 80% of the equity in M Jets using MMAG as his corporate vehicle, while Gunasekar and Phang used M Jets to secure the balance of 20% stake for themselves.
On Nov 16, 2020, JTAS, MMAG and the original owner of M Jets entered into a series of back-to-back agreements to complete the M Jets acquisition.
The statement of claim says that at the time, M Jets was a non-operating passenger airline which did not own any aircraft. Its operating licences were also about to expire.
Upon acquisition, M Jets became involved in the business of aircraft charter, the provision of scheduled and chartered air cargo logistics, and the provision of ground handling, aircraft maintenance, multimodal logistics and warehousing services.
Gunasekar and Phang claim that some time early this year, Chin and MMAG lodged a complaint with the Malaysian Anti-Corruption Commission (MACC) alleging wrongdoing in the management and operation of M Jets.
On Feb 13, MACC raided M Jets’ office and opened investigations into Gunasekar and Phang, although no charges were framed against them.
They said the MACC complaint was baseless and was used as a device to unlawfully oust them from M Jets.
The duo also claim that a Feb 21 announcement by MMAG to Bursa Malaysia of their suspension by the company was unlawful and in breach of the terms of the shareholders’ agreement.
Gunasekar and Phang said they were removed as directors of M Jets and eventually sacked from employment as managing director and chief financial officer, respectively.
They claim the defendants had abused their positions and acted in concert to wrongfully oust them from the management and operations of M Jets and consequently injured their interest in its investment in M Jets.
The plaintiffs also claim that Shanmuganathan, Saysu and Schubert, who were minority shareholders and nominal investors in JTAS, conspired with other defendants to remove them from M Jets.