Asset recovery: Court of Appeal affirms bona fide third-party rights to monies seized under Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001

22 September 2026

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On 17 July 2026, the Court of Appeal affirmed the High Court decision in Essilor Manufacturing (Thailand) Co Ltd v Pendakwa Raya & Ors [2025] MLJU 2055 that allowed the application by a bona fide third party for the release of assets seized under section 61 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (“AMLA”). The High Court allowed a foreign corporate victim’s appeal of a cross-border fraud and money laundering syndicate, setting aside the Sessions Court’s order forfeiting RM1,425,000 in seized cash to the Government of Malaysia, and ordered the return of the monies to the victim.

The decision is also notable for the High Court’s decision to admit fresh evidence on appeal under section 317 of the Criminal Procedure Code, namely a judgment of the Thai Criminal Court convicting the perpetrators, which was delivered only after the Sessions Court’s forfeiture order.

Our Partner Kwong Chiew Ee, Principal Melvin Ng, and Associate Richard Selestine acted for the successful applicant in this matter.  

This article provides an overview of the High Court’s decision.

Snapshot

Essilor Manufacturing (Thailand) Co. Ltd (“EMTC”) was the victim of a large-scale fraudulent scheme perpetrated by its former chief financial officer. In aggregate, approximately US$272 million was misappropriated from EMTC’s account with JP Morgan Chase (“JPM Account”) and withdrawn or transferred to other parties either in or outside Thailand. EMTC discovered the unauthorised withdrawals only around 5 to 12 December 2019.

On 29 November 2019, as part of the scheme, EMTC’s former manager transferred US$350,000 from the JPM Account to the account of Amaco International Co. Ltd (“Amaco”) with Siam Commercial Bank in Thailand, without EMTC’s knowledge or authorisation. The second respondent, the sole director of Amaco, and the third respondent then withdrew the US$350,000 (equivalent to RM1,425,000) in cash from Amaco’s account and attempted to carry it  into Malaysia. On 3 December 2019, they were detained at the Perlis border by the Royal Malaysian Customs Department and the cash was seized on suspicion of being proceeds of money laundering. Both subsequently pleaded guilty to charges under section 28B of the AMLA.

A notice to third parties was published in the Federal Government Gazette calling upon any third party claiming an interest in the seized monies to show cause why the monies should not be forfeited. Upon learning of the seizure, EMTC applied to be added as a third party and sought the return of the monies under section 61(4) of the AMLA on the basis that it was a bona fide third party with a legitimate legal interest in the monies, which originated from its own account. The Public Prosecutor opposed the application.

On 9 November 2021, the Sessions Court dismissed EMTC’s claim and ordered that the seized monies be forfeited to the Government of Malaysia under sections 28L(1) and 61(2) of the AMLA. Among other things, the Sessions Court held that EMTC had failed to establish the chain of possession of the monies from the point of withdrawal to Amaco or the second and third respondents, and that the filing of a civil suit against another receipient of funds in Malaysia was insufficient to show that EMTC had taken all reasonable steps to prevent the illegal use of the monies. EMTC appealed to the High Court.

At the High Court, EMTC applied under section 317 of the Criminal Procedure Code to adduce fresh evidence, namely the judgment of the Thai Criminal Court dated 29 December 2021 - delivered after the Sessions Court’s decision - convicting the second and third respondents of money laundering, fraud, and related offences under, among other things, the Thai Anti-Money Laundering Act B.E. 2542 (1999), including the transfer of US$350,000 from EMTC’s account to Amaco’s account.

Judgement

The High Court allowed the appeal and set aside the Sessions Court’s forfeiture order in its entirety. On 17 July 2026, the Court of Appeal upheld the High Court’s decision and findings in full, without issuing separate grounds of decision. The High Court’s key findings are summarised below.

Adducing fresh evidence

The High Court allowed EMTC’s application to adduce the Thai Criminal Court judgment as fresh evidence. The judgment could not have been obtained with reasonable diligence during the proceedings before the Sessions Court, as it was delivered only after that court’s decision. It also had a determining influence on the outcome, as it clearly demonstrated that the seized monies originated from EMTC’s account. The court further found the judgment to be a valid and authentic official court document, both credible and relevant. It held that it should form part of the evidence in the appeal in the interests of justice, particularly as none of the respondents adduced any contradictory evidence.

Burden of proof

The court affirmed that in forfeiture proceedings the applicable standard of proof is the balance of probabilities as in civil cases. To succeed, EMTC need only prove on the balance of probabilities that it was a bona fide third party with a legitimate legal interest in the seized monies under section 61(4)(a) of the AMLA and that the monies originated from EMTC.

Totality of evidence

The court found that EMTC had successfully proven the chronology and chain of funds from its account through to the cash seized at the Perlis border. The court considered the totality of the evidence, including the affidavit of EMTC’s representatives, the written admission of EMTC’s former manager that the US$350,000 had been transferred from the JPM Account to Amaco’s account on behalf of the syndicate, the Thai public prosecutor’s report tracing the withdrawal of the cash from Amaco’s account at Siam Commercial Bank, and the fresh evidence of the Thai Criminal Court judgment. Notably, none of the respondents challenged or rebutted the contents of EMTC’s affidavits.

Accordingly, the court found that EMTC was the victim of a fraud syndicate and had established on the balance of probabilities that it was a bona fide third party with a legitimate legal interest in the seized monies under section 61(4) of the AMLA, and that the monies originated from EMTC.

The High Court therefore held that it was appropriate under the law for the sum of US$350,000, equivalent to RM1,425,000, to be returned to EMTC.

Comment

First, the decision affirms that the bona fide third-party provisions in section 61 of the AMLA provide a real and effective avenue for victims of fraud to recover misappropriated assets seized by Malaysian enforcement agencies, notwithstanding that forfeiture proceedings are brought by the Public Prosecutor and that the wrongdoers may have pleaded guilty to money laundering offences in respect of the very assets seized.

Second, the decision takes a commercially realistic approach to the tracing of funds in cross-border fraud. The Sessions Court had faulted the claimant for failing to establish the chain of possession of the physical cash. The High Court, by contrast, accepted that the chain of funds could be established through the combination of affidavit evidence, the fraudster’s written admission, foreign investigation reports, and the foreign criminal conviction, recognising that a defrauded party cannot realistically be expected to trace physical cash withdrawals carried out covertly by the perpetrators.

Third, the case illustrates the circumstances in which appellate courts will admit fresh evidence under section 317 of the Criminal Procedure Code. A foreign judgment delivered only after the decision under appeal, which could not have been obtained earlier with reasonable diligence and which has a determining influence on the outcome, may be admitted in the interests of justice. Foreign criminal convictions of the perpetrators can be powerful corroborative evidence in domestic forfeiture proceedings.

Finally, the decision underscores the importance for victims of cross-border fraud to act promptly and on multiple fronts. For example, lodging police reports in the relevant jurisdictions, pursuing civil recovery proceedings, and intervening in any forfeiture proceedings in which the misappropriated assets are implicated. Such steps are relevant to demonstrating that the claimant did all that could reasonably be expected of it for the purposes of section 61(4)(e) of the AMLA.