Federal Court says lender can recover RM50mil despite invalid loan
Court says a defective moneylending agreement does not automatically relieve borrowers of the obligation to repay funds received.
The Federal Court has ruled that KBH Marine Industry Sdn Bhd cannot challenge a ruling allowing moneylender Ace Credit to recover RM50 million. A three-judge panel dismissed KBH Marine's appeal, stating the questions of law raised did not meet the threshold for review under Section 96 of the Courts of Judicature Act 1964. KBH Marine had pledged three Penang properties as collateral for the loan, which was later found invalid under the Moneylenders Act.
Ace Credit had lent RM50 million to KBH Marine's parent company, Pioneer Conglomerate, in October 2017. Despite the invalid loan agreement, Ace Credit was entitled to recover the funds, the court ruled, citing Section 66 of the Contracts Act 1950. The court emphasized that repayment of the disbursed money, while separate from enforcing the loan agreement, could still be ordered to prevent unfair advantage. Ace Credit was also awarded RM50,000 in legal costs.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
