The High Court in the case of Re Sentoria Bina Sdn Bhd (grounds of judgment dated 9 July 2021) dealt with scheme of arrangement issues. First, that a restraining order could extend to the corporate guarantor of the applicant’s company. Second, the case dealt with the principles for sanction of a scheme of arrangement.
Today was the second day of the Malaysia Insolvency Conference 2021. I had a very engaging session with my fellow speakers, Alex Chiang of Rodgers Reidy and Eddie Goh of Deloitte. The session was titled Lessons from Recent Landmark Cases. The session was a blend of practical issues and legal changes from recent court decisions.
At the session, I promised to set out a summary of the cases and legal principles I referred to. I set them out here.
The Court of Appeal in Bursa Malaysia Securities Berhad v Mohd Afrizan bin Husain (grounds of judgment dated 2 July 2021) ruled that once a winding up order was made against a public listed company, Bursa Malaysia must de-list that company from the stock exchange.
The case dealt with interesting issues between the interplay of a liquidator’s role under the Companies Act and where the liquidated company is also subject to Bursa Malaysia’s Listing Requirement.
The Federal Court has granted leave to appeal against this Court of Appeal decision.
The INSOL-World Bank Group has updated its Global Guide on measures adopted to support distressed businesses through the Covid-19 crisis. The publication is now updated to the changes as at April 2021. I had earlier posted up the earlier edition of the guide as at April 2020.
The Global Guide covers 80 countries, and how each country had tackled the Covid-19 crisis through governmental, regulatory and legal relief measures.
Nathalie Ker and I contributed the Malaysia chapter for the INSOL-World Bank Global Guide.
In comparison with global trends, Malaysia has not been quick enough to update laws to provide the full range of reliefs for distressed businesses.
In the High Court decision of Bank Muamalat Malaysia Berhad v Prolink Marketing Sdn Bhd & 2 others [2019] 1 LNS 702, the Court held that Bank Negara’s Small Debt Resolution Scheme (SDRS) merely provided advice to a bank to observe a standstill in legal proceedings against distressed borrowers. It was not mandatory for the bank to halt legal proceedings.
The High Court in the decision of Top Builders Capital Berhad and two others (grounds of judgment dated 30 April 2021) set out certain important principles on scheme of arrangement law. The decision dived deep into issues on assessing the proof of debt for the creditors’ vote in a scheme and how to obtain leave to proceed against a restraining order.
