Xin Synergy Escalates Probe Into Former Directors Over Moneylending Operations

Xin Synergy Group Berhad has escalated an internal corporate governance dispute into a second police report, putting three former directors under renewed scrutiny after an independent review uncovered what the company described as serious irregularities in moneylending activities at its wholly owned subsidiary Total IPCO Sdn Bhd.

The latest police report names former directors Chong Wei Chuan, Chong Wei Liang and Khoo Yik Chou. Xin Synergy said the action followed an independent review covering Total IPCOs moneylending operations and related matters between May 1, 2021 and October 10, 2023.

At the centre of the matter are loans that the company says were approved and disbursed in circumstances that allegedly breached Total IPCOs internal procedures and applicable statutory requirements. Further investigation, according to the company, produced evidence raising serious regulatory and legal concerns.

The allegations are significant because lending operations depend heavily on controls designed to prevent weak credit assessment, conflicts of interest and inappropriate deployment of corporate funds. When those safeguards fail, the consequences can extend well beyond a single transaction, potentially affecting shareholder value, regulatory exposure and confidence in the companys management.

The review was conducted after Xin Synergy appointed NEK & Associates as an independent reviewer in August 2025. The appointment followed the company‘s earlier discovery of irregularities involving Total IPCO’s moneylending activities, which led to an initial police report against the same former directors.

The first review had identified concerns including weaknesses in loan risk assessment, reliance on recommendations without sufficient independent verification, possible conflicts involving related party borrowers, questionable loan drawdowns and repayment activity, as well as potential breaches of internal procedures and the Moneylenders Act 1951.

The latest police report indicates that the matter has not been closed by the earlier corporate response. Instead, the company appears to be pursuing additional avenues after the independent review identified further concerns. Xin Synergy said it was taking the necessary measures to safeguard the interests of the company and its shareholders.

Yet the announcement leaves an important question unanswered: how much money was involved?

Xin Synergy did not disclose the value of the loans or transactions covered by the latest police report, nor did it provide detailed information about the evidence uncovered during the subsequent investigation. That absence of a financial figure makes it difficult for investors to assess the potential scale of any eventual losses or liabilities.

The company has, however, indicated that the police report is not expected to have an immediate material financial effect on the group for the financial year ending March 31, 2027. The statement provides some reassurance to shareholders, although the longer term implications will depend on the outcome of investigations and whether any financial recovery, regulatory action or litigation follows.

Xin Synergy shares were under pressure following the announcement. The Edge, citing market data, reported that the stock fell 2.78 percent, or half a sen, to 18 sen by 3pm on September 2, putting the companys market value at approximately RM99.63 million.

For Malaysian investors, the next developments will therefore be crucial. Any confirmation of financial losses, regulatory breaches or recoverability issues could alter the markets assessment of Xin Synergy, while a failure to substantiate the allegations could produce a very different outcome. Until investigators establish the facts, the second police report represents a serious escalation of a corporate governance dispute rather than a final verdict.