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Chong Ket Pen Abused Of Power Ende A Civil Suit, Claims USD 88 Million

The case of a civil suit proposed by major shareholder of Protasco Berhard’s against the company Group Executive-Vice Chairman and Managing Director, Dato’ Sri Chong Ket Pen whose alleged abuse of power, has made the Oil and Gas industry of neighboring countries Indonesia and Malaysia being a highlight.

All were start at early November 2012. Chong Ket Pen, assured an Indonesian venture capital and asset management company Global Capital Limited (GCL), approach and assisting inject a fund to maintain his positions at Protasco Bhd company. In return, Tey Por Yee will be set as the Board member of Protasco Bhd by buying over major shares – conditions also knows as business take-over. These were the conditions and negotiations that concluded in the Investment Guarantee Agreement.

As for the business take-over, there were also a process of undertake a new oil and gas business subsidiary, viewed as a ‘premium’ deal was done by the assurance of Protasco Bhd’s planned venture into the oil and gas sector. A deal which concluded within a month of discussions and negotiations, followed by the acquired of 27.11 % Protasco’s stake, or for USD 24 million or a 33% premium over the market price. 

Part of the suit stated: “The acquisition of the shares at a huge premium was a risk for the plaintiff, given the performance and financial situation of Protasco Bhd. Nevertheless, that risk was undertaken, given that the plaintiff was under the impression that their investment was protected by the assurance given by the defendant, inter alia his guarantees and obligations under the Investment Guarantee Agreement”.

In a short time after the suit, Protasco Bhd announce that it was set to buy 76% of equity interest of PT Anglo Slavic Utama (PT ASU), an Indonesian oil and gas company with a value of USD 55 million (Rp 800 billion). However, the deal did not materialize due to non-fulfillment of conditions.

Therefore, major shareholder of an Indonesian-based company is claiming USD 88 million from Chong Ket Pen over his act of contract breach, these included loss of investment and future profits for the stake in Protasco Bhd; loss of margin to finance the acquisition of shares up to USD 18 million; liability of USD 55 million to PT ASU – which guaranteed by Chong Ket Pen that pursuant to the Investment Guarantee Agreement; and USD 15.5 million as payment for the profit guarantee under the Investment Guarantee Agreement.

Afterward, it was revealed that Chong Ket Pen, through the Investment Guarantee Agreement, had made the proposal for the transaction of Protasco Bhd’s shares without disclosing to the Board that he has personal interest in obtaining control over the company.

As the consequences of this, Chong Ket Pen maneuvered by putting the blame on GCL investors. They were Tey Por Yee and Ooi Kok Aun, putting them both under the limelight in 2014 on allegations of criminal breach of trust due to the non-disclosure of interest in a transaction involving USD 20.3 million. However, they were granted a discharge not amounting to an acquittal by the sessions court in September 2017, which also proved what was brought by Chong Ket Pen as sham documents.

There were also another case of Chong Ket Pen, as Bursa Malaysia public information also revealed him has been drawing unrealistic remunerations from Protasco Bhd at the peak of USD 576,000 in 2017 and USD 1 million in 2016 after he gained control over the company, respectively. Chong Ket Pen suggested to act only for his own benefit, as for doing business transactions and decisions for operation, remuneration, payments of dividends and salaries at the expense and the best interests of the company.

At other side, GCL was also came into thought that Chong Ket Pen has failed to ensure that Protasco Bhd was profitable, with a profit before tax of USD 7,1 million in the third and fourth year under the Investment Guarantee Agreement. In addition, a total of USD 26,2 million profit was also guaranteed over the four years.

Moreover, Protasco Bhd was also reported has had lost a huge contract recently, as its subsidiary HCM Engineering Sdn Bhd received a letter of termination from Tumpike Synergy Sdn Bhd (TSSB) due to delays in the project, suggesting a USD 622,000 earnings impact. Subsequently, CIMB IB-Research has therefore maintained its “Reduce” rating on Protasco Bhd at MYR 20 cents-, decreasing price at MYR 17 cents (from MYR 30 cents). Shares price which is likely weigh by weak job execution and poor contract visibility.

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  1. So, he only has a weak capability?

  2. Jadi si mister ini kurang tepat ngasih solusinya atau gimanakah?

  3. Orang kalo udah kaya, investasi nya di berbagai bidang

  4. This is the case of the world that has had a profound impact on Indonesia. Hopefully the future can be better.


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