PUTRAJAYA, Oct 7 — When money from an investment scam landed in a company’s bank account, the government moved to seize everything in it, but the Court of Appeal has now drawn a line on how far such confiscation can go.

A three-judge panel ruled that authorities can take money proven to be linked to a crime, but cannot automatically seize the rest of the money in the same account without evidence connecting it to the offence, news outlet Free Malaysia Today (FMT) reported today.

The ruling came after LWC Good Service Sdn Bhd challenged a High Court order allowing the government to forfeit RM1.36 million from two of its bank accounts under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Amla).

The prosecution was able to trace RM360,000 directly from a bank account linked to the Comoncaps investment scam into LWC’s Hong Leong Bank account, according to the FMT report.

But the court found there was no evidence showing that the rest of the money in LWC’s accounts came from the scam.

As such, the panel comprising Datuk Azman Abdullah, Dean Wayne Daly and chaired by K. Muniandy, ordered the RM360,000 to be forfeited, while directing that RM863,179.84 in the Hong Leong Bank account and RM139,329.24 in LWC’s CIMB account be returned to the company.

In delivering the unanimous judgment, Muniandy said suspicion alone was not enough to justify taking money that had not been proven to be linked to criminal activity, FMT reported.

“Suspicion, however compelling or grave, does not take the place of legal proof,” he was quoted as saying in the written grounds.

The judge said Amla could not be turned into a broad tool for confiscating money simply because a company had irregularities or dealt with business partners who failed to comply with financial requirements.

In simple terms, the court said the money that could be traced to the scam had to be separated from the rest rather than treating the entire bank account as criminal proceeds.

LWC was among 28 respondents in civil forfeiture proceedings arising from the Comoncaps investment fraud, in which 22 victims allegedly lost about RM3.49 million.

The High Court had previously ordered the entire balance of RM1.223 million in LWC’s Hong Leong Bank account and RM139,329.24 in its CIMB account to be forfeited.

The Court of Appeal said the High Court had erred by failing to distinguish the RM360,000 that was proven to be linked to the scam from the remaining funds, according to FMT.