suit filed against mer...
Tuesday September 14, 8:03 pm Eastern Time
Malaysian investor sues Merrill Lynch over disclosure
NEW YORK, Sept 14 (Reuters) - A Malaysian investor who said he was unwittingly ensnared in the 1994 Rakyat Bank scandal sued Merrill Lynch and Co Inc.(NYSE:MER - news) for $140 million on Tuesday, claiming Merrill employees improperly revealed his name to Singapore authorities.
Maung Ng We and his Cayman Islands-based Massive Atlantic Limited Co., in a lawsuit filed in U.S. District Court in Manhattan, said he had been assured of ''absolute confidentiality'' when he opened a $50 million investment trust with Merrill Lynch Investment Bank Ltd, a London unit of the U.S. investment bank.
In the lawsuit, Maung claimed he had purchased a controlling interest in a Malaysian public company, Khong Guan Holdings Berhad , and two other public companies and then sold the investments to the now-defunct Rakyat Merchant Bankers Berhad for a total profit of US$125 million.
However, Rakyat was taken over by Bank Negara Malaysia, the Malaysian Central Bank, in early 1994 when Bank Negara uncovered financial improprieties at Rakyat.
Maung claimed that Singapore officials believed anyone involved with the sale of investments to Rakyat was ''dirty'' and traced the holdings he sold to Rakyat to Merrill Lynch Investment Bank. Employees of the Merrill's London unit then revealed his name to Singapore's Ministry of Finance, he said.
Within an hour, Maung said in the lawsuit, he was picked up and interrogated for a week in Singapore, his passport was seized, and he was ultimately forced to ''return'' $44 million in shares of the companies he had sold to Rakyat to buy his escape from Singapore.
Merrill Lynch is not accused of any financial misdeeds in the suit. But Maung is seeking recovery of the $44 million plus interest that he said he was compelled to forfeit, and punitive damages against Merrill of $100 million for emotional suffering.
A Merrill spokesman said the company believes the action has no merit and that any actions it took in regard to Maung were ''pursuant to applicable law and legal process in Singapore.''
Maung's attorney was not immediately available for comment.
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