Properties Held Under Trust – Can It Be Seized Under AMLA?

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We all know a public prosecutor can order the seizing of properties of an accused1 charged under AMLA. However, can they seize properties that are under trust? The short answer is NO. The long answer can be observed in the Court of Appeal case of Tetuan Khana & Co v Saling Bin Lau Bee Chiang & Ors And Others Appeals2. We will briefly take a look at the case.

Brief facts of the case

The Johor Government acquired a large piece of land in the Linggui Valley in Kota Tinggi in the 1990s. This acquisition deprived 52 Orang Asli families in three villages of the use of their ancestral land and traditional sources of income as they were restricted from entering the acquired area to forage for their livelihood and food.

Stemming from that, the Orang Asli appointed a lawyer from Tetuan Khana & Co to bring an action (claiming compensation) against the government. The matter was fought all the way to the Court of Appeal, where the court sided with the Orang Asli and gave (amongst others) the following orders:

  1. A sum of RM22 Million as compensation to be paid to the Orang Asli;
  2. The sum is to put under a trust;
  3. Tetuan Khana & Co, the representatives of the Orang Asli and the Director-General of Jabatan Hal Ehwal Orang Asli Malaysia is to be appointed as trustees; and
  4. The trustees have the liberty to apply in relation to the implementation of the trust and the performance of their duties under the said trust.

The compensation was duly paid to Tetuan Khana & Co by the Johor Government. However (and to cut the long story short), it was subsequently found out that the lawyer from Tetuan Khana & Co had mismanaged the trust funds by withdrawing some of the funds to buy 27 condominiums under the lawyer’s name (which purportedly/ allegedly done for the benefits of the Orang Asli under the trust). The lawyer, Tetuan Khana & Co and the parties that were involved in the transaction were sued by the Orang Asli and the Orang Asli successfully obtained an injunction against them to prevent them from further dissipating the 27 condominiums and the trust funds and also to deliver the 27 condominiums to them (the first suit). They were also prosecuted under AMLA, and while they were cleared for the charge of criminal breach of trust (CBT), the properties of the parties involved were nonetheless seized under AMLA3 (the second suit).

Tetuan Khana & Co and the parties involved in the condominium transaction appealed the first suit to the Court of Appeal claiming that the first suit contravenes Section 54(3) of AMLA, which states that as long as the seizure of any property remain in force, no civil proceedings can be instituted/ no pending suit (such as the first suit) be maintained or continued in any court. This, as they claim, effectively renders the first suit null and void as the 27 condominiums effectively part and parcel of the lawyer’s property.

The court’s decision and rationale

The court dismissed the appeal. In coming to its decision, the court (amongst others) pointed out that:

  1. The properties in question, i.e. the 27 condominium units do not belong to the lawyer but belong to the trust, and the said 27 condominium units are the subject matter of the injunctions ordered by the High Court which remain in force. As such, the 27 condominium units do not fall within the ambit of the notice of seizure issued to the lawyer.
  2. The appeals involved the enforcement of the trust and the allegation of mismanagement of the trust by the trustees. AMLA can only be invoked for the offence of money laundering, the measures to be taken to prevent money laundering and terrorism financing offences. The Act empowers the relevant authority to forfeit property involved in or derived from money laundering and terrorism financing offences, as well as terrorist property, proceeds of unlawful activity and instrumentalities of an offence and for matters incidental thereto and connected therewith.
  3. Since the 27 condominium units were purportedly purchased by the lawyer as a trustee to the trust, to invest on behalf of the Orang Asli, they cannot fall within the scope of the notice of seizure issued. The 27 condominium units are also the subject of the injunctions which have not been lifted, set aside or varied and therefore remain enforceable. What it meant was this- as the 27 condominiums involved did not derived from the offences listed under AMLA, the condominiums CANNOT be seized.

Other related articlea:

  1. AMLA Malaysia – What Are The Rights Accorded To An Information Provider?
  2. AMLA Malaysia – Challenging An Act of Seizure By Way Of Judicial Review
  3. AMLA Malaysia – How To Report A Suspicious Transaction?
  4. Forfeiture of Properties 12 Months After Seizing/ Freezing-Is It Possible?

Have more questions regarding AMLA (Anti-Money Laundering, Anti-Terrorism Financing And Proceeds of Unlawful Activities Act)? Consult with our lawyer today:


1. Section 51 (1)(a), Anti-Money Laundering Anti-Terrorism Financing and Proceeds Of Unlawful Activities Act 2001 (AMLA)

2. [2019] 3 MLJ 258.

3. Under section 51 (1)(a) of the Anti-Money Laundering Anti-Terrorism Financing and Proceeds Of Unlawful Activities Act 2001 (AMLA).