A motor racing team owner has been revealed as a wanted Malaysian businessman accused of a $26.5 million fraud after private investigators found him in New Zealand. Sam Hurley reports.
A Malaysian businessman wanted over an alleged $26.5 million fraud was found by private investigators living a luxury life in New Zealand as the owner of a professional motor racing team.
Michael Chua Khian Keng "fled" Malaysia in September 2015 after Mudajaya Corporation Berhad (Mudajaya), a large public company in the South-East Asian country, accused its former employee of defrauding it of $26.5m in 2012 and 2013.
The 44-year-old came to New Zealand where he has been better known as Michael Chua, the owner of Mike Racing, the Weekend Herald can reveal after a June judgment was released by the High Court at Auckland.
Mudajaya claims Chua confessed when it confronted him with the allegations of "secret profits", or bribes, from subcontractors in a major power plant construction project.
The company also claimed Chua agreed he was indebted to the company for $23.5m and would transfer all, or at least most, of his and some of his family's property to Mudajaya.
But Chua, who says he made the admission under threats of violence, left with his family for New Zealand in September 2015.
Mudajaya responded by reporting the alleged fraud to the Malaysian police and also engaged in civil proceedings in Malaysia last year to recovery some of the money, the High Court judgment shows.
"[Chua and his wife] appear to have deliberately fled Malaysia in order to avoid the police and frustrate [Mudajaya's] attempts to recover the amounts stolen and enforce the Malaysian judgment," according to High Court documents.
Malaysian authorities, however, failed to locate Chua.
Growing frustrated with the lack of progress by the Malaysian police, the managing director and CEO of Mudajaya, James Wong, began searching for Chua himself.
Knowing that his former employee had an interest in motor racing, he began looking online for such connections, an affidavit from Wong reads.
What he discovered was Chua living life in the fast lane through his ownership of racing companies and "exotic cars" in Palmerston North.
Chua had founded Mike Racing in 2008, a motor racing company he moved to New Zealand.
Photos on the company's website and social media pages show Chua travelling around the world for races and events.
"I've always had a certain fondness of cars, or anything on wheels," a statement from Chua on the Mike Racing website reads.
"This fondness eventually grew into a deep passion for motorsports and with that goal in mind, I took a risk."
Wong then instructed private investigators to make contact with Chua, the High Court judgment reads.
The private investigators posed as intermediaries for potential buyers from Chua's high-end car business and took photos of him which Wong positively identified.
They also found Chua's luxury vehicle company, Crux International Ltd, owned a commercial property in New Zealand, while he and his wife Tan Kah Luan also owned a residential property.
Property records show the pair own a five-bedroom home on more than 25,000 square metres of land with a valuation of $875,000, just south of Palmerston North.
Chua also owned a black 1955 Porsche 356 speedster, public records show.
After finding Chua in Manawatu, Wong and Mudajaya went after his New Zealand assets.
The company applied for a without notice registration of the Malaysian civil judgment in New Zealand and for freezing orders.
The orders would freeze Chua's Kiwi assets, including his property, registered companies Mike Racing Ltd, Mike Motorsport Ltd and Crux, and "substantial loans" in excess of $1m to Crux and a trust.
Chua is the director and sole shareholder of Mike Racing and Mike Motorsport, records with the New Zealand Companies Office show. He is also the director of Crux and owns 85 per cent of the shares.
Auckland High Court Justice Sally Fitzgerald heard the application on an urgent basis, because of the pending sale of the Crux commercial property, and granted the freezing orders in February.
The orders, however, were rescinded by Justice Fitzgerald in her June ruling after an application by Chua, his wife, Mike Racing, Mike Motorsport and Crux.
She was not satisfied there was a tenable argument that the Malaysian civil judgment, if registered in New Zealand, would not be set aside because of a lack of notice and disclosure from Mudajaya.
Varied and interim freezing orders, however, remain in place pending further legal action, the High Court at Auckland heard during a hearing yesterday.But in a twist of events in March, Chua was arrested in Bangkok and taken back to Malaysia, the Malaysian national newspaper the Sun reported.
He has now been charged over the alleged misappropriation of Mudajaya property.
Mudajaya claims the fraud included bribes from three subcontractors on the power plant project which Chua arranged to be paid to him, another Malaysian company and a further corporation controlled by his brother.
It also alleges that in early March 2015, during three meetings with senior Mudajaya executives, Chua admitted his involvement and agreed for him and his family - including his wife and mother - to hold all existing and future assets on trust for Mudajaya to resolve the debt.
At the hearing yesterday afternoon before Justice Mark Woolford, the court heard Chua has applied for the Malaysian civil judgment to be set aside and will defend the criminal prosecution.
The court also heard Mudajaya has obtained "worldwide freezing orders" in Malaysia.
Chua also claims his alleged admissions were obtained through threats of violence, which were recorded on audio tapes, Justice Fitzgerald's decision reads.
At a meeting with Chua on March 11, 2015 a Mudajaya executive is recorded saying in Cantonese: "If not, I'll let, the police deal with you ... You know how they work inside? ... They will beat you until [you're] crazy. They won't sit down nicely like us and talk to you."
In an affidavit by Chua, he also claims that in September and December 2015 he returned voluntarily to Malaysia to meet with police about their investigation and denies he absconded to New Zealand.
However, in her judgment, Justice Fitzgerald said it did not appear Chua's "admissions" were influenced by threats and the "overall impression" from the transcripts was that he was accepting of his involvement and sought to make amends.
Chua said in the March 11 meeting: "I want to settle this ... it's part of the reason I sit down with you guys here. Of course it's not that easy just to admit everything."
Justice Fitzgerald said: "There is also no clear explanation by Mr Chua (or his wife) of how they came to fund what on any view was a substantial property portfolio in Malaysia, as well as a racing car business.
"There remains a question mark over the source of funds to maintain the racing 'hobby' and lifestyle which Mr Chua evidently enjoys."
The judge, however, wished to "make it clear" she was not suggesting Chua took or received bribes while working for Mudajaya.
"Rather, it simply reflects that on the evidence currently before the Court, there is a tenable argument to that effect."