Bank fails in bid to recover RM400mil loan from 30 parties

2026-02-25 - 03:23

The High Court dismissed Bank Pembangunan Malaysia Bhd’s suit to recover the loan proceeds received by 30 individuals and companies via borrower Aries Telecoms (M) Bhd, with costs totalling RM325,000. KUALA LUMPUR: The High Court has dismissed the attempt by Bank Pembangunan Malaysia Bhd (BPMB) to recover the proceeds of a RM400 million loan from 30 individuals and companies, named as defendants, allegedly channelled through a telecommunications firm. Justice Quay Chew Soon said BPMB could not claim the amount from the defendants as the bank had already obtained a summary judgment at the Federal Court against Aries Telecoms (M) Bhd, the loan recipient. Aries was not named as a party in this suit. The loan was sought for the development of a 1,562km coastal fibre-optic network around Peninsular Malaysia. Quay said the suit was unsustainable due to BPMB’s lack of locus standi. “Even assuming it has locus standi, the allegations are barred by res judicata,” he said in the decision delivered on Monday. The res judicata doctrine bars parties from pursuing civil claims that have already been decided or ought to have been litigated between them. BPMB obtained the summary judgment against Aries in 2022 for recovery of the loan. Quay observed that in the suit against Aries, BPMB had claimed that it was not concerned about how Aries used the loan proceeds. “BPMB took and maintained this position in its written and oral submissions to the Court of Appeal and Federal Court in its suit against Aries. Having accepted this position as correct, it cannot now bring a claim in its own name. “The bank has already satisfied itself by obtaining the summary judgment (against Aries). If there is any misapplication of the loan, it is only Aries that can claim the same. “BPMB has casually bypassed the recipient of the loan (Aries) and now intends to go after monies that are not its own,” the judge said. On BPMB’s contention that locus standi was not pleaded, Quay said it was a threshold issue the court must determine before examining the merits of the case. “Locus standi is a fundamental issue that goes to the jurisdiction of the court. If the bank is found to lack standing to sue, then the action fails in limine (at the outset) and there is no inquiry into the merits of the case,” he said. The court awarded costs totalling RM325,000 to the 10 legal firms representing the 30 defendants. Lawyer Sreedhara Naidu, who represented one of the defendants, said BPMB’s lawyer had indicated to the court that they would file a notice of appeal.