3Lyon Holdings: A Legal Counsels' Findings

EXECUTIVE SUMMARY

The brutal truth is this: 3Lyon Holdings Berhad was not a failed investment company. It was a deliberate, related-party recycling vehicle designed to raise funds from new RPS investors and immediately channel them to entities controlled by management — particularly Datuk Wira Ranjeet Singh Sidhu — while using fresh capital to pay “dividends” to earlier investors to maintain the illusion of a legitimate, high-yield Islamic-structured investment.

The company’s own audited financial statements for the year ended 31 December 2021 (signed by the directors) constitute most damning pieces of evidence.

Over 170 victims were induced to invest. Only 149 were ever registered in the Register of Members or Annual Returns. At least 21–34 were non-accredited retail investors, some investing below RM250,000. Fake insurance guarantees were used. Bank officers were impersonated. Customer data was stolen from Alliance Bank. An SC acknowledgment letter was weaponised as false regulatory approval. The Information Memorandum’s stated use of proceeds was systematically ignored.

The company is now in court liquidation (commenced 9 October 2025). The liquidator has recovered nil assets. Directors have failed to file a Statement of Affairs. This is a multi-layered criminal enterprise involving securities fraud, cheating, criminal breach of trust, fraudulent trading, money laundering and egregious breaches of directors’ duties. The forensic auditors’ opinion, when read together with the IM, marketing materials, consent judgment, statutory demand and liquidator’s accounts, renders the directors’ position — particularly Ranjeet as the controlling mind — indefensible.

Personal liability, criminal convictions, director disqualification and meaningful recovery through tracing and clawback are not merely possible; they are the probable outcome if the matter is pursued with the urgency and coordination this case demands.

PRIMARY CAUSES OF ACTION / CORE LIABILITIES

(a) Capital Markets and Services Act 2007 (CMSA)

Sections 229 & 230 (read with Schedule 6): The excluded-issue regime was abused from the outset. The offering was not confined to accredited or sophisticated investors. Active retail solicitation occurred via unlicensed agents. The forensic findings prove the IM’s representations regarding business activities and use of proceeds were false — new funds were never deployed into real estate, consumer finance or high-growth industries but were immediately on-lent internally.

Regulated activity licensing: External agents carried on the business of dealing in securities without a CMSL.

Misleading the SC and investors: The SC acknowledgment letter was used as marketing collateral to imply regulatory approval or prospectus status. 

(b) Companies Act 2016 (CA 2016)

Section 51 (Register of Members) & Section 68 (Annual Return): At least 21 victims were deliberately omitted to avoid regulatory scrutiny.

Financial reporting obligations: Complete failure to prepare, audit or lodge financial statements after FYE 31.12.2021. The 2021 accounts themselves are now evidence of the false narrative presented to SSM and investors.

Section 213 (Directors’ Duties): Systemic breaches. The forensic opinion demonstrates that directors authorised or permitted the immediate diversion of RPS proceeds to related entities, payment of dividends while insolvent, extraction of disproportionate remuneration and advances, and reliance on Ranjeet’s personal support letter despite having raised over RM128 million. Conflicts of interest were never properly managed.

Related Party Transaction rules: The extreme concentration of assets in related-party lending (RM51.64 million + RM124.09 million) without proper approval, disclosure or impairment constitutes clear breach.

Section 540 (Fraudulent Trading): This is the core liability. The forensic auditors’ opinion provides direct, quantified evidence that the business was carried on with intent to defraud creditors and for a fraudulent purpose: new RPS funds were raised and immediately on-lent to management-linked entities while earlier investors were paid dividends to sustain the scheme. Ranjeet and the other directors who authorised these transactions or signed the accounts are knowingly parties. The court may declare them personally liable, without limit, for the company’s debts. 

(c) Penal Code (Act 574)

Sections 415 & 420 (Cheating): Multiple deceptions — fake insurance guarantee, false SC imprimatur, impersonation of bank officers, false partnerships (Great Eastern, Bursa Islamic), and false representations as to use of proceeds and business activities. The forensic findings prove these representations were false at the time they were made.

Sections 405, 406 & 409 (Criminal Breach of Trust): Investor funds were entrusted for specific purposes under the Subscription Agreement and IM. They were dishonestly misappropriated by immediate on-lending to related entities (RM51.64M + RM124.09M) and used to pay earlier investors’ “dividends”. Section 409 applies given the business context.

Forgery and falsification: Creation/use of fake insurance documents and the recording of related-party interest income and dividends while the group was structurally insolvent.

Section 120A/120B (Criminal Conspiracy): Agreement between directors (led by Ranjeet) and agents to commit the above offences. 

(d) Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA)

The entire operation constitutes money laundering: placement via RPS subscriptions, layering through related-party loans with minimal cash movement (RM65.01M RPS raised, cash barely moved), and integration via dividend payments and director extraction. The forensic cash-flow mismatch is powerful evidence of layering. 

(e) Personal Data Protection Act 2010 (PDPA) & Financial Services Act 2013 (FSA 2013)

The use of Alliance Bank customer data by Jocephin Goh Lai Yee (a long-standing unit trust agent still linked to the bank) to target victims constitutes unauthorised processing and breach of bank secrecy. This is reportable to the PDPC and Bank Negara Malaysia. 

(f) Additional Liabilities Strengthened by the Forensic Opinion

Winding-up clawbacks: The RM9.25 million RPS dividends paid while insolvent, RM4.27 million directors’ remuneration and RM7.91 million advances to directors are strong candidates for preference, undervalue transaction and misfeasance claims.

Tracing and knowing receipt: The related-party loan and receivable balances (over RM175 million) are traceable into Ranjeet-linked entities. Knowing receipt and dishonest assistance claims lie against those recipients.

Common law deceit and constructive trust: Non-registered victims have particularly strong claims as they are not bound by any constitutional or IM limitations.

THE LEGAL BULLETS

For the Liquidator (the primary actor with statutory powers)

The forensic auditors’ opinion should be treated as core evidence. It justifies:

Immediate public examination of Ranjeet Singh Sidhu and other directors focused on the related-party loan book, fund flows from the RM65.01 million RPS increase, and recoverability of the RM51.64 million + RM124.09 million balances.

· Section 540 CA 2016 application for personal liability declarations.

· Misfeasance proceedings and clawback of dividends, remuneration and advances.

· Aggressive recovery actions against related-party recipients (including veil-piercing applications where appropriate).

· Coordination with SC, Police and AMLA authorities for asset tracing and freezing.

For Victims

· File proofs of debt in the liquidation (as creditors for money had and received or damages).

· Pursue separate High Court (Commercial Division) proceedings against the company (in liquidation), directors personally, agents and related-party recipients for deceit, breach of fiduciary duty, knowing receipt and constructive trust. The forensic opinion proves the falsity of the core representations.

· Non-registered victims have cleaner claims and are not constrained by any internal company documents.

 Standard defences collapse in the face of the company’s own audited accounts, the forensic analysis, and the pattern of impersonation, forgery and deliberate non-registration of victims.

AS A VICTIM, WHAT CAN YOU DO?

To overcome the liquidator’s current inertia (nil recoveries, pending Statement of Affairs) and maximise pressure:

· Annex the forensic auditors’ opinion to every complaint lodged with Police, SC Enforcement, SSM, PDPC, Bank Negara Malaysia and MACC. Its independent, quantified nature drawn from the company’s own signed accounts carries exceptional weight.

· Use the forensic findings to justify urgent court applications for public examination and freezing orders specifically targeting the web of related-party receivables.

· Pursue parallel regulatory complaints against enablers (Jocephin Goh’s licensing status, Alliance Bank’s data governance and supervision failures) to generate additional documents and leverage. 

IMMEDIATE STEPS 

1. Deliver this consolidated opinion together with the forensic auditors’ report to the liquidator (Gabriel Teo Chun, GTC Corporate Recovery) with a formal demand that the report be used immediately to:

o   Apply for public examination of Ranjeet and other directors.

o   Investigate the current status and recoverability of the RM51.64 million related-party loans and RM124.09 million other receivables.

o   Consider preference/misfeasance claims in respect of the RM9.25 million dividends and director extraction. 

2. Update and re-submit the master complaints to Police (Commercial Crime), SC Enforcement and SSM, annexing the forensic opinion as a key exhibit. Request urgent asset preservation and coordinated investigation. 

3. Parallel complaints: Lodge or update complaints with PDPC (data breach) and Bank Negara Malaysia (bank secrecy breach by Jocephin Goh). 

4. Circulate key extracts of the forensic opinion to all known victims to encourage further participation and strengthen collective action. 

5. Instruct experts (working with or directing the liquidator) to map the precise flow of the hundreds of million from RPS increase into the related-party accounts and onward movements. 

6. Prepare High Court writs against directors, agents and related-party recipients for deceit and trust remedies while simultaneously filing proofs of debt in the liquidation.

7. If the liquidator does not demonstrate decisive action on the related-party investigation and public examination within 7–10 days, prepare an application to court for directions or replacement. 

This consolidated opinion represents the definitive legal assessment. The combination of the Information Memorandum, marketing materials, victim evidence, consent judgment, statutory demand, liquidator’s accounts and — most powerfully — the company’s own 2021 audited financial statements as analysed by the forensic auditors, establishes a clear, documented pattern of fraud, misappropriation and breach of duty on a significant scale.

The only remaining variables are the speed, coordination and determination with which the liquidator, regulators and victims’ legal team act. With proper execution, the prospects of personal liability against the directors, criminal convictions and material recovery are strong.

Note: Some of the information used for the legal opinion was provided by Ms Far**** who wrote to us with the details. She is willing to become authorities’ witness if requested.

Lets see who is iltimately responsible for this Ponzi Scam according to 3Lyon Holdings: