The High Court in its grounds of judgment dated 10 June 2020 in Goldpage Assets Sdn Bhd v Unique Mix Sdn Bhd held that unsecured creditors can intervene in a judicial management application. The unsecured creditors’ views can then be heard in opposing the making of the judicial management order. This is an important decision clarifying this often argued point.
On 10 April 2020, the Companies Commission of Malaysia (SSM) announced that seven reliefs will be provided to companies in light of the COVID-19 outbreak and Malaysia’s Movement Control Order (MCO). These initiatives are very much welcomed. They range from temporary protection from winding up of companies, extension of time to lodge statutory documents, and an extension of time for the annual general meeting.
The coronavirus pandemic gives rise to the major risk of companies and small businesses going insolvent. In this article, I set out the restructuring and corporate rescue options for businesses in Malaysia. For example, companies can pursue the corporate rescue mechanisms under the Companies Act 2016. For small businesses who are sole proprietors, they may face bankruptcy. These individuals consider the voluntary arrangement under the Insolvency Act 1967.
Qualified persons can now apply to be licensed as liquidators, or also known as insolvency practitioners, in Malaysia. This allows for the licence holder to take on appointments as: (i) liquidator; (ii) receiver or receiver and manager; (iii) judicial manager; and (iv) a nominee in a corporate voluntary arrangement.
The Accountant General of Malaysia recently issued its Guidelines for Qualification as Liquidator under the Companies Act 2016 (CA 2016) dated 21 January 2020 (only available in the Malay language). This now allows for qualified persons to apply for a liquidator licence under the CA 2016.
I write about the past qualification route for liquidators under the Companies Act 1965 (CA 1965) and this new qualification regime under the CA 2016. Continue reading
The Companies Amendment Bill 2019 was tabled for First Reading before the Dewan Rakyat (i.e. the House of Representatives) on 8 July 2019.The amendment Bill was passed by the Dewan Rakyat on 10 July 2019 and by the Dewan Negara (i.e. the Senate) on 31 July 2019. [edit: The Companies (Amendment) Act 2019 has since come into force on 15 January 2020 as I have written about here.]
The amendment Bill will make amendments to the Companies Act 2016 (CA 2016). I have since updated this article to take into account the Parliamentary debate of the amendment Bill.
I highlight seven of the more significant amendments. There will be welcome clarification of the effect of section 66 on the execution of what sort of documents, as well as the redemption of preference shares out of capital.
But I can see issues relating to the appointment of receivers or receivers and managers after liquidation. There is a severe dilution of the ability to apply for judicial management.
#1: Section 66 to Only to Apply to Specific Types of Documents
I had earlier written about the possible uncertainty of validity of signed documents under section 66 of the CA 2016. Would all documents executed on behalf of the company require at least one director to sign that document? Under the CA 2016, the term document meant a document referred to under the Evidence Act. Continue reading
Sweet & Maxwell is publishing an upcoming book: Law and Practice of Corporate Insolvency in Malaysia. It will be the first dedicated text in Malaysia covering restructuring and insolvency law. Each chapter is written by a lawyer, an insolvency practitioner or a combination of both. The book should be a good blend of the latest legal developments and practical tips.
The book will cover all the areas of winding up, receivership, schemes of arrangement, corporate voluntary arrangement and judicial management. Continue reading