The Court of Appeal in Boulevard Plaza Sdn Bhd v Gas District Cooling (Putrajaya) Sdn Bhd  MLJU 1965 allowed the receiver and manager’s application to compel a chilled water provider to continue with the supply of chilled water to the company under receivership. This is a far-reaching ability to compel the continuation of certain essential supplies. This decision would also apply to the situation of a judicial manager seeking for the continuation of such supplies.
In response to COVID-19, the UK has fast-tracked its Corporate Insolvency and Governance Bill (the PDF copy of the Bill is here and with helpful Explanatory Notes). The overarching objective of this Bill is to provide businesses with the breathing space they need to continue trading during this difficult time and to avoid insolvency. I set out seven of the key measures that UK is introducing and the possible reforms that Malaysia can adopt.
Under Malaysia’s movement control restrictions and with COVID-19, companies are facing cash-flow issues and financial difficulties. With the employers facing such difficulties, the employees may also face salary cuts (for example, see this news report) or retrenchment. Companies may then slip closer towards financial distress and may have to pursue restructuring and insolvency options. This article sets out the insolvency issues relating to employees.
I set out the different scenarios where a company in distress may pursue a scheme of arrangement, apply for judicial management, end up placed in receivership or is compulsorily wound up. I touch on how these scenarios will affect the rights of employees. Continue reading
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) Act 2019 will now come into force on 15 January 2020. This makes the first set of amendments to the Companies Act 2016.
The enforcement date was gazetted through P.U. (B) 16/2020. On the same date of 15 January 2020, the Companies (Company Auditor and Liquidator Fees) Regulations 2020 will also come into force (see P.U. (A) 9/2020).
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