IOUpay (ASX:IOU) has been served with legal proceedings in the Federal Court of Australia by Clee Capital, which represents a group of shareholders (5.08% of the company) seeking to remove the board and install its own nominated directors.
IOUpay says it will resist the application today, and that the legal claim includes a witness statement by Kenneth Kuan Choon Hsuing, the company's former CFO who was dismissed just a couple weeks ago.
IOUpay says Mr Kuan is currently being investigated by Malaysian police in relation to the suspected significant fraud involving misappropriation of the company's funds.
Clee Capital is seeking a number of orders including that IOUpay be restrained from making any payments or incurring any liabilities other than ordinary business, that it hand over all hard drives and data services, and that an independent investigator be appointed, as well as a receiver and manager for all the company's property.