judicial management order

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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9 Key Restructuring Insolvency Changes in Malaysia’s Companies Amendment Bill 2023

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Malaysia’s Companies Amendment Bill 2023 has been tabled before Parliament’s House of Representatives (see Hansard for 10 October 2023). There will be a fuller Parliamentary debate towards the end of November 2023.

This article focuses on the 9 key restructuring and corporate rescue amendments.

All references below will be to the existing and proposed new sections in the Companies Act 2016 as referred to in the Companies Amendment Bill 2023.
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Case Update: Further Decision That Listed Companies Cannot Apply for Judicial Management

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This update is further to the earlier High Court decision in Re Scomi Group Bhd which held that public listed companies cannot apply for judicial management.

Another public listed company, Dolomite Corporation Berhad, has also failed in its judicial management application.

On 8 March 2022, Dolomite announced that the Shah Alam High Court had dismissed its judicial management application. Among others, the Court held that public listed companies are not allowed to apply for judicial management pursuant to section 403(b) of the Companies Act 2016 i.e. being a company subject to the Capital Markets and Services Act 2007. Continue reading →

Case Update: Filing of Judicial Management Will Restrain Advertisement of Winding Up

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The Court of Appeal in Kumpulan Liziz Sdn Bjd (in liquidation) v Pembinaan Azam Jaya Sdn Bhd (grounds of judgment dated 25 November 2021) ruled that the judicial management moratorium will extend to restraining any advertisement or gazetting of a winding up petition.

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Ex Parte Appointment of Interim Judicial Manager over Khee San Food Industries

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On 19 November 2021, The Edge reported that the candy manufacturer, Khee San Food Industries Sdn Bhd (KSFI), has been placed under interim judicial management. KSFI is the wholly-owned subsidiary of the public-listed Khee San Bhd.

On 17 November 2021, the Court made an ex parte Order to appoint an interim judicial manager, Datuk Adam Primus Varghese Abdullah of Messrs ADAMPRIMUS, over KSFI. The interim judicial management of KSFI  in turn resulted in Khee San Bhd triggering Practice Note 17 (PN17). PN17 is essentially the financial distress criteria set by Bursa Malaysia Securities. KSFI’s assets account for over half of the total assets of Khee San on a consolidated basis.

I believe this is the first time a financial institution creditor has applied to place the debtor company under judicial management. I set out some of the guiding legal principles and the facts of this case.

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Case Update: Not Mandatory for Proposed Judicial Manager’s Affidavit

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The High Court in Re Federal Power Sdn Bhd (grounds of judgment dated 11 October 2021) granted a judicial management order over a high voltage cable manufacturing company. The Court dealt with the issue of whether the proposed judicial manager candidate must affirm an affidavit in support of the application or not.

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