According to an announcement from iCandy Interactive (ASX: ICI) posted on Listcorp on November 5, 2024, the company has initiated legal action in Malaysia against former executives of its subsidiary, Lemon Sky Animation Sdn. Bhd., for alleged breaches of fiduciary duty and other misconduct.

Background

In 2021, iCandy acquired Lemon Sky, a prominent Malaysian video game development and animation studio, as part of its strategic expansion. Known for delivering high-quality projects, Lemon Sky has contributed to global franchises like Resident Evil, Overwatch, and Final Fantasy. This reputation has firmly established Lemon Sky as a leading player in Malaysia’s rapidly growing game industry.

As part of their agreement, former Lemon Sky CEO Cheng Fei Wong and COO Ka King Foong worked under a three-year management contract, which concluded on August 31, 2024. As the contract neared its end, iCandy’s Board of Directors initiated an investigation into financial transactions involving Momodica Sdn. Bhd. This inquiry revealed that Wong and Foong controlled Momodica. Furthermore, an internal audit identified payments totaling RM1,505,750 (approximately A$524,542) made to Momodica without adequate quality or service validation.

Legal Proceedings

Following these findings, Lemon Sky filed a lawsuit in the High Court of Malaya in Kuala Lumpur, citing Wong and Foong for alleged breaches, including fiduciary duty and trust violations. iCandy’s board emphasized its commitment to maintaining high governance standards and protecting shareholders’ interests. Consequently, it has not ruled out the possibility of further legal action against additional parties involved if warranted.

Looking Forward

iCandy assures shareholders and clients that Lemon Sky will continue to operate and deliver its usual high standard of service despite the ongoing legal matters. This assurance underscores iCandy’s dedication to stability and quality for its partners.

About iCandy Interactive

Since its listing on the Australian Securities Exchange in 2016, iCandy Interactive has gained recognition as an award-winning game development group. Headquartered in Melbourne, with additional offices in Malaysia, Singapore, and Indonesia, iCandy boasts a team of over 650 developers. Together, they have produced more than 350 titles across mobile, console, PC, and Web 3.0 platforms, collaborating on numerous globally acclaimed franchises. For more information, visit iCandy’s official website.