KOTA BARU: A 46-year-old man, who operated his wife's company, was fined RM120,000 by the Sessions Court yesterday for running an illegal investment scheme involving the cultivation of mahogany saplings.

Mohd Zaki Abdullah of Kampung Pak Mali, Gunung in Bachok, managed to collect RM5 million from the illegal scheme.

He pleaded guilty to two counts of conducting illegal operations.

Under the scheme, which he ran through a company owned by his second wife, investors were promised RM7,000 in returns within 15 years for buying a mahogany tree sapling which costs RM330, plus RM50 as registration fee.

The scheme was also advertised in the Harakah newspaper and over the radio.
Some 10,000 investors, most of them from Kelantan, were told that their investments would be returned when the trees matured and were cut down to be sold as logs.

The father of nine was charged with carrying out the illegal activities through Akar Korporat Sdn Bhd in Jalan Kebun Sultan here between Jan 1 and Dec 31, 2000.

In mitigation, Mohd Zaki's lawyer, Mohamad Ilias Mohd Nor, submitted that his client should only be fined as he had suffered depression and mental problems.

He also applied for his client to be allowed to pay the fine in scheduled payments as he was facing financial problems since the company closed down in 2005.

In pressing for a heavy sentence, prosecuting officer Narainasani Alagu from the Companies Commission said the accused had collected millions of ringgit for himself at the expense of his investors.



Judge Gulam Muhiaddeen Abdul Aziz fined Mohd Zaki RM100,000 or two years' jail for the first offence, and RM20,000 or six months' jail for the second.

Gulam Muhiaddeen also allowed the defence application for Mohd Zaki to pay RM20,000 first and the balance of RM100,000 in scheduled payments until the end of the year.

Outside the courtroom, Narainasani said it was the first case for the Companies Commission involving a private company.



"It is also the first time we are taking action against a de facto director who is not listed, but actually runs the whole operation.

"Let this be a lesson to others because we know there are many more companies which operate in a similar manner."