Introduction
This article is a retelling of the Malaysian High Court decision of OUJI SEIYAKU (M) SDN BHD v. LEONG KAH HOE & ORS [2026] MLRHU 2250. It exposes how a senior employee diverted RM14 million through secret profits, misappropriation, and shadow directorship. Key lessons for employers and directors.
Note: This article contains dramatized reconstructions of events based on the reported case text. Please contact for corrections.
The WhatsApp Message That Unravelled a RM14 Million Scheme
On the evening of 19 March 2020, two days after a new company called BTC Market Trading Sdn Bhd was incorporated, Tommy Leong sat with his phone and typed a message to his sister. He spoke of a contract between “our company and future company.” She replied with three letters: “BTC lo.” Then, almost as an afterthought, she decoded them—”Ben Tommy Choo”—and he answered with a single word: “ya.” Within weeks, that company would become the exclusive distributor for his employer, Ouji Seiyaku (M) Sdn Bhd. Tommy never told his bosses that BTC was family.
How a Senior Sales Manager Built a Hidden Empire
When Tommy Leong walked into Ouji Seiyaku’s offices on 2 March 2020, he carried the confidence of a man hand-picked to lead. Fresh from meetings with the founders of the Whealthfields Group in Singapore, the 34-year-old was appointed Senior Sales Manager, then promoted to Head of Sales before the year ended. His employment contract bound him to confidentiality and good faith. Behind the scenes, however, the judgment reveals that a different plan was already in motion.
Within fifteen days of starting work, Tommy had allegedly approached only two potential distributors—CHC Distributors and Yoong Shing Trading—without keeping any records of the meetings. Then, roughly two to three days before 17 March 2020, he turned to his brother-in-law, Ben Liew, and his colleague, Choo Chin Hua. On the very same day that BTC Market Trading was incorporated, Ouji signed a Product Distribution Service Agreement appointing BTC as its exclusive Malaysian distributor. The agreement carved out a 39% “Distribution Margin,” of which 18.5%—dubbed “BTC’s Portion”—was retained by the company. Between April 2020 and March 2022, that portion totalled RM9,786,414.92.
While Ouji’s products sold under the Walch and Ka brands, Tommy’s network allegedly operated from a warehouse in Kampung Subang Baru, Shah Alam. Every Thursday, Ouji’s marketing staff were required to attend weekly meetings there. A marketing executive named Nicole Ho would later swear in a statutory declaration that she watched, bewildered, as Tommy and his team spent almost all their working hours at BTC’s premises—appearing at Ouji’s actual office only on Monday mornings. She noticed Ouji’s own goods being packaged for courier delivery, and she heard whispers that “BTC” stood for Ben, Tommy, and Choo.
The judgment records that the corporate architecture was carefully arranged. Ben Liew and Tommy’s sister, Li Teng, were the named directors and majority shareholders of BTC Market Trading. A 30% stake was held by Ivy, Choo’s wife, who headed BTC’s finance department. Tommy’s name appeared nowhere in the corporate records. Yet WhatsApp exchanges showed him negotiating distribution terms, directing hiring decisions, and asserting “leadership” over BTC’s operations.
As 2021 wore on, the scheme allegedly expanded. In November 2020, Warhol Mac Sdn Bhd was incorporated with Tommy’s involvement and funding. By May 2021, it had applied to register the trademark “Blinic” for soap bars—products that would eventually sit on the same retail shelves as Ouji’s Walch line, priced lower and marketed through the same e-commerce platform. Meanwhile, invoices from River Pool Resources, a promoter deployment company Tommy had recommended, began billing Ouji for hundreds of retail promoters at Watsons and AEON Wellness when none, or very few, had actually been requested.
Ouji’s financial results turned catastrophic. The company recorded a net loss of RM4.4 million for 2020, and an audited net loss of nearly RM14.7 million for 2021. The Distribution Margin alone accounted for over 69% of the 2021 loss.
The end came swiftly. On 31 March 2022, Tommy resigned. His sister WhatsApped him: “Make it messy la. No need handover properly.” In the days that followed, an unauthorised “warehouse clearance sale” began at BTC’s premises—heavily discounted, cash-only disposals of Ouji’s goods that continued even after the court granted Mareva and Anton Piller injunctions on 15 April 2022. Nicole Ho’s statutory declaration, filed on 12 April 2022, lit the fuse for the lawsuit that followed.
The Legal Battle: Two Irreconcilable Versions of the Truth
Ouji’s counsel, Shahmi Nazir, painted the case as a textbook betrayal of trust. Tommy, they argued, was a senior fiduciary who had engineered a pre-arranged scheme from his first fortnight of employment. By funnelling Ouji’s distribution rights to a vehicle controlled by his own family, he had extracted a secret profit of nearly RM9.8 million. By diverting promotional samples and launching the competing “Blinic” brand through Warhol Mac, he had breached his duties not to misappropriate and not to compete. By rubber-stamping River Pool’s inflated invoices, he had caused Ouji to overpay by RM275,537.58. Ouji further argued that Tommy was the shadow director and alter ego of BTC Market Trading, Warhol Mac, and BTC Imperium, and that Ben Liew and Li Teng had knowingly assisted in and received the proceeds of these breaches. The claim was framed in breach of fiduciary duty, unlawful means conspiracy, dishonest assistance, and knowing receipt.
Tommy’s counsel, Arlene Tan, offered a radically different portrait. The appointment of BTC Market Trading, she submitted, was Ouji’s own independent commercial decision. The Distribution Margin was expressly negotiated, transparently documented in clause 6.1 of the Distribution Agreement, and approved by Ouji’s Director, Alicia Liew, who understood its structure. The renewal of the agreement in March 2021, without alteration, was proof of informed affirmation. BTC Market Trading had performed genuine distribution functions, nearly doubling Ouji’s sales from RM16.9 million in 2020 to RM28.7 million in 2021. Tommy maintained that his familial relationships were immaterial to the business and that “BTC” actually stood for “Bitcoin,” a cryptocurrency popular during the pandemic. As for the samples, every release had been approved through Ouji’s own two-tier Product Requisition Form system. As for River Pool, invoices had been processed by Ouji’s finance department and approved by Alicia. Tommy further argued that Ouji’s claim for the Distribution Margin was barred by the doctrine of total failure of consideration, or alternatively, that Ouji had failed to prove actual loss with the precision required in damages claims.
Ben Liew and Li Teng, represented by Goh Chiau Wee, insisted they were nominal “sleeping directors” with no day-to-day involvement. They argued that the Distribution Margin was paid pursuant to a valid contract which Ouji was bound to honour, and that familial relationships alone could not ground a finding of conspiracy or complicity. Warhol Mac and BTC Imperium denied being Tommy’s alter egos, stressing that they were separate legal persons and that BTC Imperium, as a non-trading shareholder, could not be liable for trading debts.
Key Authorities and Laws Considered by the Court
Statutes & Legislation
- Evidence Act 1950, ss 73A & 90A: Governing the admissibility of computerised accounting records. The Court ruled Ouji’s SAP Business One inventory audit reports met statutory requirements to prove the cost value of diverted stock.
- Evidence Act 1950, s 10: Admissibility of statements and actions in furtherance of a common intention in civil conspiracy cases.
- Companies Act 2016, s 259: Requirement to lodge financial statements. Warhol Mac’s total failure to lodge financial reports was cited as evidence of intent to conceal Tommy’s financial involvement.
- Competition Act 2010, s 2: Defines product markets based on functional substitutability.
Case Authorities
- Boardman v Phipps [1967] 2 AC 46 & Regal (Hastings) Ltd v Gulliver [1942] 1 All ER 378: Established that equitable rules against secret profits and self-dealing are strict. Liability to account for profits arises automatically from the breach regardless of good faith or whether the principal could have made the profit itself.
- Lazarus Estates Ltd v Beasley [1956] 1 QB 702 & Golden Plus Holdings Bhd v China Idea Development Ltd [2021] MLRHU 2001: Fraud unravels everything. Executive approvals or board decisions procured through material non-disclosure cannot sanitize tainted transactions.
- CIMB Bank Bhd v Maybank Trustees Bhd [2014] 3 MLJ 169: Set out the objective-subjective test for dishonest assistance in Malaysia and the high threshold required to establish shadow directorship.
- Royal Brunei Airlines v Tan Kok Ming Philip [1995] 3 All ER 97: Formulated the four-element test for third-party accessory liability in dishonest assistance.
- Ooi Meng Khin v Amanah Scotts Properties (KL) Sdn Bhd [2014] 6 MLJ 488: Applied a flexible, unconscionability-based test for knowing receipt of trust assets.
- Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229: Established that where oral testimony conflicts with contemporaneous documentary evidence (e.g., WhatsApp logs), the written record prevails.
- Taz Logistics Sdn Bhd v Taz Metals Sdn Bhd [2019] 3 MLJ 510: Reaffirmed that in civil conspiracy, courts must assess the cumulative chronology of events as a whole rather than analyzing overt acts in isolated vacua.
- Lim Swee Choo v Ong Koh Hou [2026] 1 MLRA 1 & Sunway City Sdn Bhd v Otis Elevator Company M Sdn Bhd [2025] MLRAU 206: Distinguished by the Court. Restitutionary principles on failure of consideration do not bar an equitable claim for an account of secret profits.
The Court’s Decision: Fraud Unravels Everything
Atan Mustaffa Yussof Ahmad J allowed Ouji’s claim in full, delivering a judgment that serves as a sharp reminder of the absolute nature of fiduciary obligations.
The Distribution Margin as Secret Profit. The court found that Tommy owed Ouji fiduciary duties not to make secret profits, not to misappropriate assets, and not to compete. The coincidence of BTC Market Trading’s incorporation date with the Distribution Agreement’s execution, combined with Tommy’s failure to disclose his familial connection to its controllers, established that the agreement was procured through an undisclosed conflict of interest. The court rejected the defence that a written contract and the director’s approval could cure this breach. Citing Golden Plus Holdings and Lazarus Estates, the judge held that board approvals procured through material non-disclosure cannot sanitise fraudulent transactions: “Fraud unravels everything.” The fact that BTC Market Trading generated genuine sales growth did not negate the breach; a distributor may generate sales and still misappropriate margins. The court also rejected Tommy’s argument that the claim was barred by total failure of consideration, holding that Ouji sought an equitable account of secret profits, not restitution for a failed contract. Tommy, BTC Market Trading, Ben Liew, and Li Teng were held jointly and/or severally liable to account for RM9,786,414.92.
Misappropriation of Goods and Samples. The court accepted that Tommy exploited his first-tier approval role under the Product Requisition Form system to divert goods to BTC Market Trading’s warehouse and onward to Warhol Mac. The documentary trail between BTC Market Trading and Warhol Mac—including a zero-value Goods Received Note and invoices with no corresponding bank payments—was found to be a sham designed to disguise diversion. The post-termination “fire sale” of Ouji’s goods at 50% to 80% discounts, conducted in cash immediately after Tommy’s resignation, was treated as powerful circumstantial evidence of an attempt to liquidate misappropriated stock. The court pierced the corporate veil, finding that Warhol Mac and BTC Imperium were not independent actors but vehicles interposed to receive and conceal the proceeds. Liability for RM3,892,043.50 was imposed jointly and/or severally on Tommy, BTC Market Trading, Ben Liew, Li Teng, Warhol Mac, and BTC Imperium.
The Competing “Blinic” Business. The court rejected the argument that soap bars did not compete with Ouji’s liquid body wash. Applying a functional substitutability test under the Competition Act 2010, the court found that both products served the same cleansing function, shared the same retail category, and were sold through the same modern trade outlets. Tommy’s admission that he incorporated and funded Warhol Mac, and his concession that “the profit comes to (him),” sealed the finding. Tommy and Warhol Mac were ordered to account for RM222,137.00 in secret profits.
Inflated River Pool Invoices. The court found that Tommy, as second-tier approver, had a duty to detect the glaring discrepancies in River Pool’s invoices—where hundreds of promoters were billed for months in which none had been requested. His blind reliance on conflicted subordinates did not absolve him. He was ordered to pay RM275,537.58.
Shadow Directorship, Dishonest Assistance, and Conspiracy. The court found Tommy was the shadow director and alter ego of BTC Market Trading, Warhol Mac, and BTC Imperium, lifting their corporate veils. Ben Liew and Li Teng were found liable for dishonest assistance and knowing receipt, the court preferring the contemporaneous WhatsApp evidence of 19 March 2020 over their oral denials at trial. The court also found Tommy, Ben Liew, and Li Teng liable for unlawful means conspiracy, holding that the overt acts, viewed cumulatively, admitted of no innocent explanation.
Significance and Practical Takeaways
For employers and HR professionals: The decision confirms that very senior employees in positions of special trust almost necessarily incur extensive fiduciary duties under Malaysian law. An employment contract alone does not exhaust these obligations. Employers should implement robust conflict-of-interest disclosure policies and require senior managers to declare familial or financial ties with vendors, distributors, and service providers before any appointment or contract execution.
For company directors and compliance officers: The judgment illustrates that internal approval structures are only as strong as the information flowing into them. Alicia Liew’s signature on requisition forms and distribution agreements did not protect Ouji because the approvals were procured through concealment. Businesses should ensure that no single employee controls both the recommendation and the filtration of information to the board.
For litigators and in-house counsel: The decision is a masterclass in the evidential weight of contemporaneous digital communications. The court repeatedly preferred WhatsApp messages over oral testimony, applying Tindok Besar Estate to hold that documentary evidence defeats contradictory oral evidence. The “Bitcoin” explanation for “BTC” was dismissed as entirely unsupported. Litigators should advise clients from day one that casual messaging apps create permanent, admissible records.
For the wider commercial community: The judgment clarifies that commercial success is not a defence to a breach of fiduciary duty. A distributor may double a principal’s sales while simultaneously misappropriating margins. The court also reaffirmed that the corporate veil will be pierced where entities are interposed as vehicles to receive or conceal the proceeds of wrongdoing, even when they conduct some genuine business. Passive shareholding structures will not shield participants if the substance of the arrangement is control by the wrongdoer.
Closing
Ouji Seiyaku v Leong Kah Hoe is more than a cautionary tale about one employee’s greed. It is a forensic study of how fiduciary duties, corporate governance, and evidentiary diligence intersect in modern Malaysian commerce. For businesses, the lesson is clear: trust must be verified, approvals must be informed, and the digital trail never forgets. If your organisation suspects that a senior employee has diverted opportunities, concealed conflicts, or siphoned value through related parties, early legal intervention—from forensic accounting to injunctive relief—can mean the difference between recovery and ruin. Seek proper advice before the warehouse clearance sale begins.
Important Notice.
This post is intended strictly for educational and informational purposes and does not constitute formal legal advice. If your organization is facing complex issues surrounding employee fiduciary breaches, corporate asset recovery, or supply chain distribution disputes, please consult a qualified legal practitioner to review your specific circumstances.