Asset Recovery Asia Conference 2019: How to Choose the Right Legal Route with Limited Information

On 14 May 2019, I spoke at the Asset Recovery Asia Conference in Singapore. It was organised by Knect365 as part of its Asset Recovery series. I thoroughly enjoyed attending the conference, hearing from other fraud and asset recovery specialists, and meeting new friends.

I shared a panel with other lawyers from different jurisdictions, an investigator and a litigation funder to share our perspectives. The session was on how victims of fraud have to make a decision early on, without all the facts, about which recovery route to go down Рlitigation or insolvency proceedings. These strategic decisions can have implications on the remainder of the case.  I set out below some of the views I shared on the panel session. Continue reading

Case Update: Court of Appeal Rules on Removal and Remuneration of Liquidator

The Court of Appeal issued its Grounds of Judgment dated 11 December 2018 in the case of Ong Kwong Yew and others v Ong Ching Chee and others. It is a cautionary tale for liquidators on the grounds for their removal as liquidator and their conduct in terms of seeking fees for work done.

The conduct of the liquidator was serious enough for the Court of Appeal to remark that the liquidator ought to be sanctioned by the Malaysian Institute of Accountants or the Director-General of Insolvency.

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Case Update: When there are competing nominees to be appointed liquidator

The High Court in its Grounds of Judgment dated 20 June 2018 in Abdul Rahman bin Ismail v Pembangunan Qualicare Sdn Bhd (Penang High Court Winding Up Petition No. 28-6-01/2013) made an interesting observation when there are competing nominees to be appointed as liquidator in a court winding up.

The High Court raised the possibility of a need for a mini trial in order to test the suitability of the two competing liquidator nominees. Continue reading

1MDB is Insolvent: Directors’ Liabilities for the Debts

In a Media Release on 23 May 2018, Malaysia’s Ministry of Finance announced that it had met with 1MDB’s Board of Directors. The directors confirmed that 1MDB was insolvent and was unable to pay its debts. 1MDB’s debts may be in the region of RM42 billion. This figure is based on the declassified Auditor General Report¬† issued in 2015.

 

With this tremendous amount of debt, I touch on one aspect of directors’ liabilities. The directors and other officers of 1MDB, when allowing 1MDB to take on so much debt, can be held personally liable for these debts. Continue reading

Liquidators’ Conflict in Abandoned Housing Projects

Abandoned housing projects still occur in Malaysia. From 2009 to 2016, it was reported that there were 225 abandoned housing projects affecting more than 40,000 house buyers. In the worst case scenario, the housing developer may go bust and will get wound up. A liquidator is then appointed over the company.

abandoned-housing

In such a scenario, the liquidator may play a crucial role in reviving the abandoned housing project. The liquidator may be able to obtain funding from a white knight investor, or with help from the relevant ministry, the Ministry of Urban Wellbeing, Housing and Local Government.

However, the liquidator may face a conflict between two competing roles. Firstly, a liquidator undertakes duties and obligations under the Companies Act 1965 (and also under the new Companies Act 2016 when it comes into force). The liquidator’s role is to sell off the assets of the wound up company and distribute the monies to the creditors. Secondly, in an abandoned housing development, the liquidator may attempt to revive the project and to effectively carry on the duties of a housing developer, raise funds, and to collect money.

A recent Court of Appeal decision may cast some doubt on permitting a liquidator to revive an abandoned housing project.

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