ASX-listed IOUpay Limited has been placed into voluntary administration after “significant fraud” was uncovered within the company’s Malaysia operations.

IOUpay acknowledged the action was made due to a “number of outstanding debts”, adding that there is “no reasonable prospect” of repayment. PwC’s Daniel Walley and Philip Carter have been appointed to head the voluntary administration.

In March this year, IOUpay dismissed its chief financial officer Kenneth Kuan for suspected misappropriation of company funds, with the matter referred to local police including officers from the Commercial Crime and Anti-Money Laundering divisions of the Royal Malaysia Police. In a letter to shareholders, IOUPay added that Kuan had also refused “to obey the board’s lawful instructions”.

The “sophisticated fraud” involved the concealment of around AU$7 million in cash “held in a reputable stakeholding firm in Malaysia”.

Kuan, along with other former management personnel, is also suspected to be involved in making several questionable unauthorised loans of company funds to Piminik Investments (with close links suspected between Kuan and Piminik associate Anthony Dunlop; Kuan’s sister also serves as Piminik director) and Birch Capital, which is jointly owned by Kuan’s wife and Piminik.

In total, the IOUpay board suspects that up to $19 million has been siphoned out of the business over the past 12 months.

Kuan is also linked to legal action launched by corporate advisory firm Clee Capital, arguing it was never issued 15 million IOUpay options at an agreed exercise price of $1 as part of a $50 million capital raise by IOUpay.

In early April, the Federal Court threw out Clee Capital’s case, dismissing its allegations of “oppressive conduct” as “weak”, and ordering the company to pay costs.

While IOUpay’s core operations are in Southeast Asia, the appointment of PwC relates exclusively to its Australian parent entity. The company confirmed that its subsidiaries in Malaysia will continue to operate as usual with “minimal business disruption”.

The company’s shares have been in a trading halt since March (with a price of $0.04) when details of the investigation were first revealed.

The fintech said it had met a with number of potential investors from Australia and Malaysia to secure funding as part of its recovery action, with Finran offering a non-binding debt funding proposal. The proposal has since been withdrawn.

The company has commenced civil recovery actions against Kuan.

Founded in 2000 and based primarily within Malaysia and Southeast Asia, IOUpay develops and provides commerce software and payments services.