case update

Case Update: Court Allows KNM to Convene Scheme Meeting but Rejects Restraining Order

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In the latest chapter of KNM Group’s high-stakes restructuring, the High Court has allowed the company to proceed with its fifth scheme of arrangement proposal. However, the Court declined to grant a restraining order, which would have given KNM a moratorium on legal proceedings filed against it.

This is one of the first reported decisions on the amended scheme of arrangement provisions. The decision deals with repeat restructuring attempts, related-party creditor classification concerns, and the ‘VC George Test’ for the grant of restraining orders.

I briefly analyse the decision of Judicial Commissioner Tuan Saheran Suhendran in his Grounds of Judgment dated 12 March 2025. I had earlier set out the legal framework for the amended scheme of arrangement and restraining order.
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From Tether to Trouble: Court Denies Mareva Relief in RM3 million Crypto Dispute

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A RM3.2 million crypto dispute has landed in the Malaysian High Court, centering on Tether (USDT) and allegations of misappropriation.

The plaintiff sought a Mareva injunction to freeze assets, but the Court ruled there was not enough evidence of risk of dissipation of assets.

I write on the case of Sim Kwang Kai Adrian v Johnathon Wong Futt Po (see grounds of judgment dated 28 April 2025). Continue reading →

Ex Parte Interim Judicial Manager Appointed Over Listed Company

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Financially-distressed public listed company, Sarawak Cable Berhad, is placed under interim judicial management. Its former lawyers obtained an ex parte order to appoint an interim judicial manager over the company.

With the amendments to the Companies Act 2016, this is the first instance of a judicial management application being applied to a listed company.

I have had a read of the judicial management court papers and also read the various Bursa announcements to piece together the following chronology.

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Case Update: Court of Appeal Confirms Liquidator Cannot Grant Sanction for Legal Proceedings

Lee ShihLeave a comment

On 16 November 2023, the Court of Appeal in Oren Venture Sdn Bhd v Small Medium Enterprise Development Bank Malaysia Berhad (Court of Appeal Civil Appeal No. W-02(IM)(MUA)-587-04/2022) upheld the High Court decision (reported at [2022] 12 MLJ 247 and where I had written about it here).

Set out below is the extract from the Court of Appeal cause list website and with the Court setting out the brief grounds of decision (in the Malay language only). The full written grounds of decision do not appear available yet. I may write a fuller update once I have read the written grounds.

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Case Update: Federal Court Rules on Related Party Creditors in Scheme of Arrangement

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The Federal Court in MDSA Resources Sdn Bhd v Adrian Sia Koon Leng has ruled on the issue of the votes of related-party creditors in a scheme of arrangement. This has an impact on the classification of related-party creditors for schemes of arrangement in Malaysia.

With the Federal Court’s 2-1 split decision, I share the majority judgment  and the dissenting minority judgment.

Summary of the Decision and Significance
Majority Grounds by: Nordin Hassan FCJ

The scheme company, MDSA Resources Sdn Bhd (MDSA), had undertaken a scheme of arrangement to restructure its debts of more than RM370 million.

Both the High Court and the Court of Appeal refused the sanction of MDSA’s scheme of arrangement.

The scheme of arrangement only had a single class of unsecured creditors. The High Court and Court of Appeal upheld the objection that related party creditors should not have been in the same class as the other unsecured creditors.

Leave to appeal to the Federal Court was allowed for 10 questions of law.

The Federal Court’s majority decision upheld the objection based on the related party creditors voting in the same class.

The Federal Court’s majority decision answered two questions of law as follows:

1. Whether the votes of related-party creditors are to be treated differently from the votes of other creditors in the same class in a scheme of arrangement.

[Answer: Yes]

 

2. If the answer to 1 is yes, whether the votes of related-party creditors in a scheme of arrangement should be discounted or not be counted altogether.

[Answer: Yes]

 

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Case Update: Dismissal of employee arrested by Malaysian Anti-Corruption Commission (MACC) deemed unfair

Marcus van Geyzel1 Comment

In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.

Employers are frequently caught off-guard when they have to respond to a sudden development that threatens to damage their corporate image or reputation. These days, a common example would be where an incident involving an employee goes viral on social media, in a negative way.

Although social media virality does spread a lot faster than traditional media, the legal issues are not new. I have advised employer-clients many times over the years on the proper process to follow when employees are the subject of negative media coverage, including instances where employees have been arrested.

Despite the urgency and sensationalism that comes with an employer being named in media reports, employers have to be clear-headed in responding to such situations (See: “Handing employee dismissals properly under Malaysian law”), as an over-reaction can have expensive consequences.

This was illustrated in the recent Industrial Court award in Abas Tuah v Malaysia Airports Holdings Bhd (Award No. 1749 of 2022).

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