Why was RM17.9m transferred to a law firm, not directly to a bank?

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Accepted Answer

The RM17.9 Million Transfer Was Allegedly Facilitated Through a Law Firm to Benefit Ahmad Zahid's Daughter's Share Purchase Deal

The prosecution contends that the RM17.9 million from Yayasan Akalbudi was transferred to the law firm Lewis & Co, rather than directly to another bank for investment, to facilitate Datuk Seri Ahmad Zahid Hamidi's daughter's acquisition of shares in a company that operated a hotel in Bali, Indonesia. This route was questioned as a genuine investment seeking higher interest rates would typically involve direct transfers between financial institutions under Yayasan Akalbudi's name.
Funds Allegedly Diverted for Daughter's Share Purchase

The prosecution's primary argument is that the RM17.9 million transfer was not for investment purposes aimed at benefiting Yayasan Akalbudi's charitable objectives. Instead, it is alleged that a significant portion of these funds, approximately RM8.6 million, was initially earmarked for Datuk Nurulhidayah Ahmad Zahid's purchase of shares in hotel operator Ri-Yaz Assets Sdn Bhd. The prosecution highlighted that the RM17.9 million from Yayasan Akalbudi was deposited into Lewis & Co's client account on June 28, 2016, and subsequently, an RM8.6 million cheque was issued by the law firm to Ri-Yaz Assets Sdn Bhd on June 30, 2016, on Ahmad Zahid's instructions.
Questioning the Rationale for Intermediary Transfer

A key point raised by the prosecution is the deviation from standard investment practices. It is argued that if the intention was to secure higher interest rates, Yayasan Akalbudi's fixed deposits could have been directly transferred and placed in another bank under the foundation's own name. The prosecution questioned why the funds were moved to Lewis & Co and then placed into fixed deposits, rather than being directly managed by Yayasan Akalbudi for investment purposes.
Law Firm's Client Account and Ownership Dispute

Further complicating the matter, the prosecution noted that Lewis & Co recorded the receipt of the RM17.9 million in a ledger under a file opened in the name of Yayasan Al-Falah, which belongs to Ahmad Zahid's family, not Yayasan Akalbudi. While Yayasan Akalbudi's lawyers argued that the foundation remained the beneficial owner with the law firm acting as a trustee, the prosecution countered that Ahmad Zahid himself lacked the authority to entrust the funds to the law firm on behalf of Yayasan Akalbudi; such an entrustment should have been directly from the foundation. A partner from Lewis & Co also testified that Yayasan Akalbudi was never a client, and the client account used was opened under Yayasan Al-Falah.

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Why was RM17.9m transferred to a law firm, not directly to a bank?

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