Finally, some action after this issue was raised a few years ago and brought up in Parliament – but where does it leave the long-suffering small investors?

This was a report in the Daily Express yesterday:

Labuan: EC Trust (Labuan) Bhd had its company’s licence revoked, pursuant to Section 167 of the Labuan Financial Services and Securities Act (LFSSA) 2010.

Its Director and Trust Officer Peter Kent Searle was also disqualified at the same time.

The announcement was made by Labuan Financial Services Authority.

It advised companies (or their beneficial owners) to deal with Ooi Woon Chee of KPMG Transaction and Restructuring. The latter was appointed to assume control of the affairs of EC Trust on behalf of Labuan FSA, in accordance to section 193 (1) LFSSA 2010.

The now defunct company’s reputation had been questioned by Klang Member of Parliament, Charles Santiago, in the Dewan Rakyat during the sitting in December 2009, according to freelance journalist Anil Netto in his blog posting dated May 12, 2011.

Its controversy was brought to light in the Australian Courier Mail where some 400 investors from Australia and New Zealand claim having been cheated of US$23 million and additional millions of missing interests.

The victims, interviewed in the press, were mystified how the firm’s director could have served in that capacity in Capital One and his company EC Trust act as trustee.

In the same story, Searles dismissed the allegation of a conflict of interest, saying, “It would be ludicrous for the sole shareholder to renounce its responsibilities as director of the company.”

He maintained that he was doing everything possible to recover the money and took credit for stopping the alleged fraud in the early stages. “They were certainly conducting a scam in the latter stages because we suspected them. We stopped them making any investments on 19 November 2004 and started legal proceedings,” Courier Mail quoted Searles.

According to the paper, investors had placed their money with Capital One, operating as an entity domiciled under the Labuan International Business and Financial Centre, but its licence had since been cancelled.

Since 2005, a complex series of legal actions had been instituted in the Malaysian High Courts between Capital One, its trustee company EC Trust and three senior executives of the investment firm.

The former two had alleged in court documents that Australian nationals Phil Crane, David Young and David Ely and their companies had defrauded the investors between 2004 and 2005.

Most of the victims were senior citizens and pensioners who had to return to work after losing their life savings.

Labuan Company EC Trust (Labuan) Bhd. (Company No: LL03637) (“EC Trust”) was incorporated as a Labuan company in Labuan under the Labuan Companies Act, 1990 and is licensed as a trust company under the Labuan Financial Services and Securities Act 2010.

It stated in its website that over the years it had assembled a team of experts in legal, accounting, taxation, IT, company secretarial, trusts and marketing.

In its profile, it named Searles as managing director and staffed by five lawyers, three of whom were Malaysians and two Australians, a senior consultant, a certified public accountant, account executives, secretarial administrators and IT specialists with extensive experiences.

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