Case Update: Court of Appeal Clarifies Leave for Bankruptcy against Guarantors under the Insolvency Act 1967

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The Court of Appeal decision in Hong Leong Bank Berhad v Ong Moon Huat [2018] 1 LNS 1612 has clarified two important points under the new Insolvency Act 1967 on bankruptcy actions against guarantors.

The first issue is to clarify the protection for guarantors where all modes of execution and enforcement must be first exhausted against the principal debtor alone. The second issue is that when seeking leave to proceed against the guarantor, the judgment creditor can apply for leave to proceed either upon the issuance of the bankruptcy notice or even prior to that, up to and immediately prior to the filing of a creditor’s petition. Continue reading →

Judicial Management Case Study – The Rise and Fall of Photon Bhd

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The Malaysia Insolvency Conference 2018 will be held this Thursday 22 November 2018. I am organising the case study session where it will feature a hypothetical judicial management case study. It is still not too late to sign up for the conference.

There is a strong lineup of speakers: The Honourable Judicial Commissioner Puan Wong Chee Lin, Melisa Tai of Adnan Sundra & Low, and Koo Yin Soon of Shearn Delamore & Co. The two speakers will take on the role of opposing counsel for and against a judicial management application. The Judicial Commissioner will then hear arguments, pose questions and then decide on the application. The counsel have already prepared their skeletal submissions and filed it before the Judicial Commissioner.

As a sneak preview, here are the background facts for this case study of the fictional Photon Bhd and how the company applies for judicial management. Will the judicial management application succeed? Will Photon Bhd rise again? Continue reading →

Largest Law Firms in Malaysia 2018: Domestic and Foreign Firms

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[Note: The 2019 edition of the largest law firms in Malaysia has now been posted up here.]

The year 2018 saw some mergers and consolidation among the larger Malaysian law firms in Kuala Lumpur. Other firms have seen organic growth and has started to overtake other established large firms in terms of number. The foreign law firms, Herbert Smith Freehills and Trowers & Hamlins, also appear to be slowly boosting their headcount in Malaysia. It also remains to be seen whether the Dentons combination with Zain & Co will lead to a bigger Dentons’ presence in Malaysia.

Here, we rank the size of the largest Malaysian law firms. We first cover the domestic firms and then make some observations on the foreign firms. The headcount is based on the Malaysian Bar directory listing at the time of writing. All images are from the firms’ website and the number of partners are also based from the firm’s website. Continue reading →

Case Update: Federal Court Rules on Scope of An International Arbitration under Malaysia’s Arbitration Act 2005

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In its recent grounds of judgment dated 31 October 2018, the Federal Court in the Jan De Nul decision clarified the effect of an international arbitration and the applicability of certain provisions of the Arbitration Act 2005 (AA 2005). The Federal Court also overruled the decision in the Court of Appeal AJWA case. The dispute gave rise to two separate appeals, one in relation to section 42 of the AA 2005 and another relating to the setting aside under section 37 of the AA 2005. This decision only deals with the section 42 aspect.

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World Bank Doing Business 2019 – Malaysia’s Improved Insolvency Ranking

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In the recent World Bank Doing Business 2019 report, Malaysia has improved its rankings from 24th up to 15th in the world. This confirms Malaysia’s place within the top-20 countries for business regulations and ease of doing business.

In particular, Malaysia has made significant improvement in one of the World Bank metrices, being Resolving Insolvency. As seen from the Doing Business 2016 – 2018 reports, Malaysia’s Resolving Insolvency rankings were between 45th and 46th. For the recent 2019 report, Malaysia has improved its global insolvency rankings to 41st position. Continue reading →

Selangor Properties Berhad: Proposed Selective Capital Reduction

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I read in the news about the proposed selective capital reduction exercise for the listed company Selangor Properties Berhad. The major 68.2% shareholder of Selangor Properties proposes to privatise the company and allow the remaining 31.8% shareholders to exit the company with a pay-out of RM5.70 per share.

I read the announcement dated 25 October 2018. I was interested to see that the proposed mechanism for the selective capital reduction will be by way of a court order under section 116 of the Companies Act 2016. This is instead of the alternative route of using the solvency statement. Continue reading →