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Public Ministry Office
Criminal Prosecutor Twenty First Province of Lima
Complaint No. 643-2012
NOTIFICATION OF RULING
Attention: FERNANDO IVAN FLORES ZUNIGA. Legal Representative of ZAPATA S.A.
Address : JIRON MONTERREY N? 341. OFICINA 1002. CHACARILLA.
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Date: 29 th day of January 2013
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?You are herewith notified of the Public Ministry?s ruling in the complaint filed against LEOW SUN SENG and other responsible parties regarding alleged crimes committed against company assets: 1) Fraudulent misappropriation of equity in the administration of a legal entity; and 2) Criminal conspiracy committed against the Public Good. In compliance with the law, a copy of the ruling is attached.? Public Ministry Office Criminal Prosecutor Twenty First Province of Lima January 29, 2013 RE: Complaint: 643-2012 LET IT BE KNOWN:
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In the complaint filed by Zapala S.A., a Panamanian corporation registered in the Public Registry of Panama, represented by Ivan Flores Fernando Zu?iga, against LEOW SUN SENG and other responsible parties, for the alleged commission of crime against company assets: 1) Fraudulent misappropriation of equity in the administration of a legal entity; and 2) Criminal conspiracy committed against the Public Good.
FINDINGS:
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Defendant LEOW SUN SENG, Malaysian citizen with passport Number A24778610, residing in: No 3, Susuran Shabab Shabab Perdana, Lebuhraya Sultanah Baniyah, 05150 Alor Setar, Kedah, Malaysia, and with registered address in Panama being Calle Aquilino de Ia Guardia No. 8, IGRA Building, PO Box 0823-02435, Panama, Panama, is the agent of record for GANO EXCEL SAC a Peruvian business entity founded in 2006 and dedicated to the importation, distribution, wholesaling and retailing of coffee combined with "ganoderma lucidum", natural or synthetic, through multilevel marketing, Unilaterally, without authorization and / or power of attorney, LEOW SUN SENG transferred, on November 14 th of 2010, 432 of the 437 shares issued to Peruvian entity GANO EXCEL SAC by sister company GANO EXCEL SA (a Colombian business entity) to GANO RISING CORP (a Panamanian business entity), owned by LEOW SUN SENG.
Doing so without proper notice or the necessary authority to take such action constitutes an act of conspiracy against the greater good of Peruvian entity GANO EXCEL SAC shareholders, in that to date LEOW SUN SENG has failed to reinstate the shares illicitly misappropriated and transferred to GANO RISING CORP. As a result of LEOW SUN SENG?s actions, the Peruvian entity GANO EXCEL SAC went from holding 88% of the shares issued by Colombian entity GANO EXCEL SA, to holding 1% of the shares. LEOW SUN SENG?s unauthorized transfer was further done without remuneration to shareholders at market value, so shares were transferred well below face value.?
Once the shares in Colombian entity GANO EXCEL SA were transferred to GANO RISING CORP, LEOW SUN SENG began to hire Malaysian staff in the Colombian entity in order to strategically place them in key positions where they were provided with a number of questionable benefits used to justify the withdrawal of cash from the company. Also the defendant LEOW SUN SENG had Colombian entity GANO EXCEL SA sign a false trademark license agreement with yet another company belonging to the accused LEOW SUN SENG identified as GANO EXCEL INDUSTRIAS OF BRUNEI, by which the Brunei entity licensed the trademarked GANO EXCEL brand to the Colombian entity so they
could claim the right to market the GANO EXCEL branded products in Colombia without proper approval of the Peruvian entity GANO EXCEL SAC which holds title to those rights.
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The Peruvian entity GANO EXCEL SAC was deceived by LEOW SUN SENG who committed fraud by never informing the shareholders of the Peruvian entity of his actions and abused his authority as its legal agent by failing to act in the best interests of the Colombian entity GANO EXCEL SA. As for the crime of fraud and misappropriation of equity in the administration of a legal entity, LEOW SUN SENG abused his status as legal agent with the sole intent of harming
the aggrieved Colombian entity by obtaining cash benefits surreptitiously. Finally, regarding criminal conspiracy, it is evident that to commit these criminal acts, the accused acted in collusion with third parties. His actions were organized and structured to achieve his purpose, which was none other than to transfer assets from the aggrieved Peruvian entity into the Colombian entity where he simultaneously assumed control while acting as agent.
LEGAL?PRECEDENCE
First: Constitutional Law. The Constitutional Court?s ruling of Article 159, subsection 1 of the Peruvian Constitution, File Number 6167-2005-PHC/TC, dated February 28, 2006, charges the Public Ministry?s Office with responsibility to prosecute ex officio or upon request and take any legal action necessary to protect the rights and interests of the public. Also, in item 5) of this same Constitutional Article, the Public Ministry?s office is charged with prosecuting criminal acts ex officio or upon request. Therefore, the Criminal Prosecutor of the Public Ministry is charged with taking legal action once a criminal complaint becomes known and with bringing said action before the criminal court when deemed appropriate, according to the constitutional law that established and governs the Public Ministry?s office and was approved by Legislative Decree Number 2.
Second: Jurisdiction. The sovereignty of the State, understood here as the ability to effectively impose a criminal penalty for the realization of a crime, is limited to the geographic territory in which that State is located. For this reason, contemporary legislation, must consider jurisdictional application of criminal law to determine which criminal laws shall be adjudicated within that territory. Jurisdictional law dictates that Peruvian criminal law is applicable to all criminal
infractions committed within the national territory, regardless of the nationality of the perpetrator or the nature of legal interests.
According to Article 1 of the Criminal Code: "Peruvian Criminal Law applies to anyone who commits a punishable offense within the territory of the Republic, subject to exceptions delineated in international rules of law. Sovereign jurisdiction also applies to punishable offenses committed in: 1) Publicly owned transportation, whether by land, sea or air, wherever they may be located, and 2) Privately operated transportation by land, sea or air, where no other state exercises sovereign jurisdiction".
Third: Application. Upon preliminary evaluation of the case, we find that the alleged criminal actions of LEOW SUN SENG took place outside of Peruvian jurisdiction since LEOW SUN SENG, is a foreign citizen of Malaysian nationality
who, without authorization of the Peruvian entity GANO EXCEL SAC, transferred shares of the Colombian entity GANO EXCEL SA, constituted in Colombia in 2009, to the Panamanian entity GANO RISING CORP which the defendant
owns. LEOW SUN SENG is also accused of hiring Malaysian staff in the Colombian entity GANO EXCEL SA, in order to justify withdrawals from company funds. Since there is no evidence whatsoever on record to infer that these criminal actions took place inside Peruvian sovereign jurisdiction, especially when the transfer of shares went to yet another foreign entity owned by the accused, therefore according to Article 1 which governs sovereign jurisdiction, the Peruvian Penal Code does not apply.
Fourth: Exceptions. Notwithstanding the precedent mentioned above, Article 2 of the Penal Code provides for exceptions to sovereign jurisdiction, allowing the Peruvian Penal Code to prosecute certain offenses and injurious behaviors
committed outside the territory when these offenses break Peruvian law as outlined in Section 2 of the Penal Code which justify the punishment of acts not covered by sovereign jurisdiction. These rules of sovereign jurisdiction consider
whether an infraction is Active or Passive. Sovereign Jurisdiction, Active/Passive Test
"The Peruvian Criminal Law applies to any offense committed abroad when:
1. The perpetrator is a government official or public servant in discharge of their public duties; 2. The infraction threatens the security or the public peace or constitutes acts described by treaties as money laundering, or other infractions that may circumvent the laws and interests of the Republic 3. The infraction threatens national security, interferes with constitutional order of the government or economic order; 4. The infraction was perpetrated against or by a Peruvian citizen when said crime is subject to extradition under Peruvian law, and when said crime is also punishable in the jurisdiction where it was committed if and when the perpetrator enters the sovereign jurisdiction of the Republic; 5. Peru is obliged by international treaty to prosecute punishable offences. Fifth: Analysis. As mentioned previously and having made the respective analysis in the present case to determine whether it is possible to justify the punishment of acts not covered by jurisdictional principle, as required by Article 2 of the Penal Code.
We determine the following:? 1, Accused LEOW SUN SENG is not a Peruvian citizen charged with acts made while performing duties as a government official or public servant. It is understood that it is in the State?s interest to monitor the proper execution of public duties by government officials and public servants who perform their duties abroad, such that crimes committed within this context shall be punishable under Peruvian criminal law
2. The allegations made are not deemed to threaten the public good or security, nor is the offense related to money laundering or misappropriation of legal assets in a collective nature. Although one of the offenses is criminal conspiracy which legally threatens the public good, according to Article 317 of the Penal Code, criminal conspiracy occurs when two or more people conspire to commit a criminal act. The illicit setting required to legally define the existence of criminal
conspiracy is that a group, formed by agreement or pact between two or more people, is created in order to commit crimes. This agreement may be explicit or implicit. When conspiracy is explicit there is a clear expression of will by participants. When conspiracy is implicit, participants? commit a number of crimes in union as demonstrated by various other criminal proceedings. The requirements for conspiracy are not met in the present case. Although the
accused LEOW SUN SENG conspired with others in an organized and structured way to achieve their joint purpose, LEOW SUN SENG is not charged with belonging to or being included in any unlawful group whose sole purpose is to
commit crimes.
Furthermore, there is no supporting evidence of conspiracy. Furthermore, according to the provisions of paragraph 2 of Article 2 of the Criminal Code, acts of conspiracy must result in wrongful acts against the public good to establish jurisdiction in Peruvian territory. Nevertheless, the results of the crime committed should not be viewed as typical, due to the disturbing detrimental consequences associated with a legally protected good.
3. According to the statement of facts, the State is not aggrieved, nor is there any threat to national security, rule of government, constitutional order, economic order and no publicly owned assets have been harmed.
4. Another precedent demanded by Peruvian criminal code: in order for criminal law to be enforced with regard to criminal acts committed abroad, said acts must be perpetrated against or by a Peruvian citizen wherein the infraction is deemed susceptible to extradition under Peruvian law, and is also deemed punishable in the sovereign jurisdiction where it was committed, and wherein the perpetrator has entered the territory of the Republic. This requirement does not apply.
However, let it be noted that according to the passive principle of jurisdiction, offenses deemed punishable by Peruvian criminal law committed by Peruvians abroad or against Peruvians abroad, the Peruvian state must have a factual
possibility of successfully prosecuting and convicting the perpetrator who committed said crime. If the accused is not found in the national territory, given the intent of the principles of jurisdiction, it is logical that the sovereign jurisdiction of the State in which the crime was committed should apply and said State should process and procedure punishment of the crime.
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