Ahmad Syafiq & Anor v EAS Management PLT & Ors [2025] MLJU 4286
There was an exclusive webinar. The slides looked highly professional. They were filled with impressive Islamic finance terminology — Shariah-compliant, Tawarruq, LLP, RPS-i. Everything appeared structured, organised, and convincing.
But before the High Court, the entire “decorative structure” eventually unraveled. What was presented as an investment opportunity turned out to be a fraudulent scheme hidden behind complex corporate documents and arrangements.
In this case, 249 investors filed a class action suit against several companies and individuals. They were promised fixed monthly sales returns through a Tawarruq structure that was said to be “safe and Shariah-compliant.”
The investors signed substantial documentation — an LLP Agreement and a Tawarruq Agreement. Funds were pooled into one entity and then transferred to a parent company which supposedly invested in the fintech sector. It Started Beautifully, Then Turned Ugly.
At first, payments were made as scheduled. Then delays began. Excuses followed one after another. The narrative shifted from “extraordinary growth” to “financial challenges.” Eventually, payments stopped altogether. Silence.
When the case was dissected in court, several startling findings emerged:
The court held that there was a clear contractual obligation to make monthly payments as stipulated in the Tawarruq Agreement. The defendants could not later argue that payments were subject to company performance when they had initially promised fixed returns.
The scheme collected more than RM100 million from the public. Yet there was no credible evidence of genuine investments to support the promised returns. The audits were unclear, and the use of funds was opaque.
The court found elements of fraudulent misrepresentation. The Shariah-compliance certificate, webinars, and investment memoranda were used as bait to attract investors. When promises were not honoured and funds were not managed transparently, this was no longer business risk — it was fraud. The Corporate Veil Is Not a Shield.
Most significantly, the court pierced the corporate veil. The companies used as collection vehicles could not serve as protective shields. When corporate structures are deliberately abused to conceal wrongdoing, the court will not hesitate to hold the individuals behind them personally liable.
The result? The defendants were ordered to repay RM23,108,685.30 to the investors, together with interest and legal costs. (Notably, some investors’ claims were dismissed because they failed to produce complete agreement documents as evidence — a crucial reminder to always retain original documentation.)
Lesson learned:
Corporate structures are not licences to deceive. Religious certification or terminology is not a magical shield that renders a scheme immune from the law. If you collect public funds based on false promises, the court will dig to the root of the matter — and the individuals behind the scheme will have nowhere left to hide.
