1. ) Globalmariner Offshore Services Sdn Bhd v 1. ) TH HEAVY ENGINEERING BERHAD (DALAM PENGGULUNGAN) (WA-28NCC-175-02/2024)

GLOBAL MARINER OFFSHORE

BOOMSLANG TECHNOLOGY SDN BHD (formerly known as Blackstone

DYNAC SDN BHD ... PETITIONERS AND TH HEAVY ENGINEERING BERHAD (In Creditors' Voluntary Liquidation) (Company No.: 200301032354 (634775D)) ... RESPONDENT JUDGMENT [1] Before the court is an application by the directors of a company under Creditors’ Voluntary Liquidation, seeking determination of whether they retain “residual powers” to oppose a petition that would convert the voluntary liquidation to a court-supervised one. The application raises fundamental questions about the scope of directors’ authority following the commencement of liquidation proceedings, particularly where the company is already under the control of a court-appointed Interim Liquidator. Central to this dispute is the directors’ contention that despite having initiated the voluntary liquidation process, they retain residual powers to oppose the conversion petition, a position vigorously contested by the petitioning creditors who argue that such powers ceased upon the commencement of liquidation. Salient Facts of the Case [2] The Respondent, TH Heavy Engineering Berhad, is a company that was classified as PN17 on 28.4.2017 and was ultimately delisted by Bursa Malaysia on 5.9.2022 after failing to present a regularisation plan to address its PN17 status. [3] On 8.9.2023, the Respondent, acting through its Board of Directors, commenced a Creditors’ Voluntary Liquidation (“CVL”) process. The Board members who executed the Statutory Declaration of Inability to Continue Business were Ahmad Al Farouk bin Ahmad Kamal, Jauhari bin Hamidi (“Jauhari”), Adinan bin Maning (“Adinan”), and Abdul Manap bin Hj. Hasan. Concurrently, Andrew Heng (“Andrew”) and Ashvin Mahendran (“Ashvin”) were appointed as Joint Interim Liquidators (“JIL”) of the Respondent. [4] According to the List of Creditors as at 8.9.2023, the total liabilities of the Respondent were recorded at RM391,041,742.24. [5] On 4.10.2023, a meeting of members of the Respondent was held, where the shareholders voted and resolved that the Respondent be wound up voluntarily and that Andrew and Ashvin be nominated as the joint and several liquidators for the Respondent. On the same day, a Creditors’ Meeting was held, but it did not proceed to completion as it was terminated by Ashvin, who was acting as chairman of the meeting. [6] Subsequently, on 30.10.2023, an injunction was granted by the court restraining the JIL from taking any steps pursuant to the ‘decision’ to convene, re-convene, or hold any creditors’ meeting of the Respondent. This injunction was granted pending the determination of an Originating Summons filed by the Petitioners. [7] The JIL wrote to the Official Receiver seeking an extension of time to act as interim liquidators and to hold the creditors’ meeting. Despite several extensions obtained, the final extension granted by the Official Receiver was until 31.1.2024. Due to the expiry of this deadline and the absence of a creditors’ meeting, the JIL vacated their office on 22.2.2024. [8] On 2.2.2024, leave was granted by Justice Ong Chee Kwan in Originating Summons No. WA-24NCC-574-10/2023 for the Petitioners to file a winding-up petition against the Respondent. Subsequently, on 21.2.2024, Global Mariner Offshore Services Sdn Bhd, Boomslang Technology Sdn Bhd, and Dynac Sdn Bhd (collectively “the Petitioners”) filed this Winding-Up Petition in Companies (Winding-Up) No. WA-28NCC-175-02/2024 (“Petition 175”) to wind up the Respondent pursuant to Section 464(1) and (2) and Section 465(1) of the Companies Act 2016 (“CA 2016”). [9] On 29.2.2024, the Petitioners filed a Summons in Chambers (Enclosure 28) seeking the appointment of private liquidators as interim liquidators of the Respondent pending the determination of Petition 175. [10] On 6.3.2024, the Respondent filed a Notice of Intention to Oppose (Enclosure 32) expressing its intention to appear at the hearing of Petition 175 and oppose it. On the same date, the Respondent filed a Summons in Chambers (Enclosure 33) to strike out Petition 175. Both actions were undertaken through solicitors instructed by the Directors of the Respondent. [11] On 7.3.2024, the Petitioners’ solicitors wrote to the Respondent’s solicitors querying the authority by which Jauhari purported to act on behalf of the Respondent, whether the Respondent was paying the legal costs and expenses of its solicitors out of the Respondent’s assets, and whether they were aware of any pending or intended proceedings affecting the Petitioners’ rights and interests. [12] Around this time, another creditor, Star Kris Services Sdn Bhd (“Star Kris”), also filed a separate winding-up petition in Companies (Winding Up) No. WA-28NCC-180-02/2024 (“Petition 180”) against the Respondent and applied for the appointment of its nominated private liquidator. [13] On 27.5.2024, both Enclosure 28 in Petition 175 and Star Kris’s application (Enclosure 16) in Petition 180 were heard by the court. the Respondent’s application to strike out Petition 175 (Enclosure 33) was withdrawn. The court in Petition 180 ordered that Petition 180 be struck out as it was filed without leave of court. In Petition 175, the court granted the Petitioners’ application and appointed the Official Receiver as the Interim Liquidator of the Respondent pending the disposal of Petition 175. The Order specified that the Interim Liquidator would have every function and power of liquidators provided for under the CA

[14] On 5.7.2024, the Respondent’s solicitors wrote to the Official Receiver inquiring whether the Official Receiver intended to oppose Petition 175, and if not, whether the “contributory” could seek leave of court to oppose the petition, without prejudice to the Board’s residual powers. [15] On 21.8.2024, the Official Receiver responded that they had no objections to a contributory opposing Petition 175, subject to leave of court being obtained under Section 486(2) of the CA 2016. [16] During case management on 5.9.2024, the Official Receiver did not take a position on the residual powers of the Directors but stated that they had no objections to Petition 175. The Senior Assistant Registrar directed the Respondent to file a formal application to determine the issue of residual powers before the next case management, which was fixed for 19.9.2024. [17] On 19.9.2024, the Respondent’s solicitors requested that a case management be fixed before the Judge for the purpose of determining the issue of residual powers. The Senior Assistant Registrar reiterated her earlier direction for the Respondent to file the necessary application before the next case management date fixed for 9.10.2024. [18] On 27.9.2024, the Respondent’s solicitors wrote to the Petitioners’ solicitors seeking confirmation whether they maintained their objections to the Directors’ locus standi. [19] On 7.10.2024, the Respondent, through its Directors, filed a Summons in Chambers (Enclosure 96) seeking an order or direction that the Directors of the Respondent, or any one of them, had residual powers to oppose Petition 175 and to affirm affidavits for that purpose. The application also sought to modify the Official Receiver’s “decision” in their letter of 21.8.2024 and requested an extension of time to affirm and file affidavits in opposition to Petition 175. [20] The application was supported by an Affidavit affirmed by Jauhari on 8.10.2024. On 12.12.2024, the Official Receiver filed an Affidavit in Reply opposing the application. The Petitioners also filed an Affidavit in Reply on 10.12.2024 opposing the application. [21] Written submissions were filed by all parties, and an oral hearing was held on 19.2.2025. The court reserved judgment, fixing 5.3.2025 for delivery of decision. The application in Enclosure 96 [22] The application in Enclosure 96 is a Summons in Chambers dated 7.10.2024 filed by the Respondent through its Directors. The application seeks several orders from the court: first, a declaration that the Directors of the Respondent, or any one of them, possess residual powers to oppose Petition 175 and to affirm affidavits in relation thereto; second, a modification of the Official Receiver’s decision in their letter dated 21.8.2024; third, an extension of time to affirm and file affidavits in opposition to the Petition; and fourth, costs in the cause. The application is made pursuant to section 517 of the CA 2016 and/or under the inherent jurisdiction of the court. [23] The grounds of the application are primarily that despite the commencement of CVL and the appointment of the Official Receiver as Interim Liquidator, the Directors retain certain residual powers, including the authority to oppose Petition

The Directors contend that common law authorities support the proposition that directors retain residual powers even after the appointment of liquidators or interim liquidators, particularly to oppose winding-up petitions or to appeal against winding-up orders. The application is also based on the contention that the powers of directors cease only upon appointment of a permanent liquidator under section 450(6) of the CA 2016, not upon appointment of a provisional liquidator. Additionally, the Directors argue that it would be unjust to deny the company the right to oppose the petition through its Directors, especially since the Official Receiver has indicated it does not intend to oppose the petition. Submissions of parties [24] The Directors of the Respondent submitted that despite the commencement of the CVL and appointment of the Official Receiver as Interim Liquidator, they retain residual powers to oppose Petition 175 by affirming affidavits and instructing solicitors, as the powers of directors cease only upon appointment of a full liquidator under section 450(6) of the CA 2016, not a provisional liquidator; they further argued that it would be unjust to deny the company the right to defend itself through its directors, especially when the Official Receiver has indicated no intention to oppose the petition. [25] The Petitioners contended that the Directors lack any residual powers to act on behalf of the Respondent as they had ceded their powers when commencing the CVL on 8.9.2023, and these powers were now vested in the Official Receiver as the court-appointed Interim Liquidator; they further argued that the application itself was flawed in form, being moved under inapplicable provisions of the CA 2016, and that directors have no interest in liquidation proceedings, with only creditors and contributories having the right to seek leave to act on behalf of the company during liquidation. [26] The Official Receiver opposed the application on the grounds that it should have been made by motion rather than a Summons in Chambers according to Rule 7 of the Companies (Winding Up) Rules 1972, that the Directors lack locus standi as only liquidators, creditors, or contributories may apply to court regarding questions arising in winding up under section 461(1)(a) of the CA 2016, which provides that “The liquidator or any contributory or creditor may apply to the Court to determine any question arising in the winding up of a company,” and that as Interim Liquidator, the Official Receiver possesses all powers of a liquidator under section 476(2), which states that “The interim liquidator shall have and may exercise all the functions and powers of a liquidator subject to such limitations and restrictions as may be prescribed in the rules or as the Court may specify in the order appointing him,” including the exclusive right to determine whether to oppose the petition. [27] NSF Engineering Sdn Bhd (“NSF Engineering”), a supporting creditor, opposed the application arguing that it had no legal basis under section 517 as there was no “act or decision” of the liquidator that required modification, that the relief sought was incompatible with section 486(2) which concerns the rights of contributories, not directors, and that the authorities relied upon by the Directors were distinguishable as they involved different factual scenarios where directors were defending orders they had obtained rather than opposing a petition that would place a liquidation they commenced under court supervision. [28] Section 517 of the CA 2016 provides: “Any person aggrieved by any act or decision of the liquidator may apply to the Court which may confirm, reverse or modify the act or decision complained of and make such order as it thinks just.” [29] Section 486(2) states: “The exercise by the liquidator in a winding up by the Court of the powers conferred by this section is subject to the control of the Court and any creditor or contributory may apply to the Court with respect to any exercise or proposed exercise of any of those powers.” [30] Star Kris, an opposing creditor, supported the Directors' application, contending that section 450 of the CA 2016 recognises the continuing role of directors in a creditors' voluntary winding up, particularly noting that section 450(3) allows “any director” to apply to court regarding liquidator nominations, which implies Parliament contemplated directors maintaining certain powers even after commencement of a CVL; they further argued that since no permanent liquidator had been appointed and only an interim liquidator was in place to preserve the status quo, it would be unjust to deny the company the right to oppose the petition through its directors. Section 450(3) provides: “Notwithstanding subsections (1) and (2), where different persons are nominated, any director, member or creditor may apply to the Court for an order directing that the person nominated as liquidator by the company shall be the liquidator or jointly with the person nominated by the creditors within seven days from the date on which the nomination was made by the creditors.” Analysis and findings of the court Procedural Propriety of the Application [31] The Directors, supported by Star Kris, contend that the application in Enclosure 96 is properly before the court despite being made by way of Summons in Chambers rather than Notice of Motion. The Directors submit that any technical error should not override the merits of the case and justice, relying on Order 1A and Order 2 Rule 1 of the Rules of Court 2012, which prioritise substantive justice over technical non-compliance. They further argue that Enclosure 96 is made under section 517 of the CA 2016 AND/OR under the inherent jurisdiction of this court, and that the court has jurisdiction to hear the application. The Directors acknowledge that there was an error in the title of the Affidavit in Support (Enclosure 97), which incorrectly referred to section 486(2) of the CA 2016, but maintains that the body of the affidavit and the contents of the application clearly relate to the determination of residual powers. They point out that the Petitioners’ own application to appoint a provisional liquidator also used a Summons in Chambers, to which the Official Receiver did not object, and submits that no substantive justice turns on this technical point. [32] The Petitioners, supported by NSF Engineering and the Official Receiver, argue that the application is flawed in form and misconceived in substance. They contend that the application lacks a proper legal basis under either section 517 or section 486(2) of the CA 2016. The Petitioners submit that section 517 is inapplicable because the Official Receiver’s letter dated 21.8.2024 does not constitute an “act or decision” requiring modification by the court. They further argue that section 486(2) is inapplicable because it can only be invoked by a creditor or contributory, not by directors of a company in liquidation. The Official Receiver specifically argues that pursuant to Rule 7 of the Companies (Winding Up) Rules 1972, the application should have been made by motion, not by way of Summons in Chambers, as this application involves issues post-winding up after the commencement of the CVL on 8.9.2023. [33] I have carefully considered the submissions of all parties regarding the procedural propriety of the application in Enclosure 96. I accept the Directors’ explanation that the reference to section 486(2) of the CA 2016 in the title of the Affidavit in Support (Enclosure 97) was an error, and that the application is in fact made under section 517 of the CA 2016 and/or the court’s inherent jurisdiction. However, despite this clarification, the procedural defects in the application remain substantial and cannot be overlooked. [34] Rule 7(1) of the Companies (Winding Up) Rules 1972 is clear and unambiguous: “Every application in Court, other than a petition, shall be made by motion and shall be served on the party effected thereby not less than two days before the days named in the notice for hearing of the motion.” This provision is mandatory and prescribes the specific form that applications must take in winding-up proceedings. The present application, being made by way of Summons in Chambers rather than by motion, fails to comply with this basic procedural requirement. [35] While I acknowledge the Directors' reliance on Order 1A and Order 2 Rule 1 of the Rules of Court 2012, which emphasise the overriding interest of justice over technical non-compliance, these general provisions must give way to the specific procedural requirements established for winding-up proceedings. The Companies (Winding Up) Rules 1972 set out a specialised procedural framework for winding-up matters, and adherence to these rules is crucial for the orderly administration of such proceedings. The case of Redang Paradise Vacation Sdn Bhd v Yap Chuan Bin & Other Appeals [2017] 10 CLJ (FC), cited by the Directors, involved appeals where duplicate copies of notices of appeal were served within the stipulated time frame but without court endorsement. The Federal Court recognised that while the Rules of Court 2012 prioritise substantive justice, it held that “it is only in extremely rare cases where the non-compliance cannot be condoned at all, the court will be obliged to strike out the matter. Those are the cases where the respondent can demonstrate prejudice as well as can establish that the breach cannot be compensated by costs.” The present case involves a more fundamental issue where the application fails to comply with mandatory procedural requirements and lacks proper legal basis under the Companies Act 2016. [36] Furthermore, even accepting that the application is made under section 517 of the CA 2016, this provision still does not provide a proper legal basis for the application. Section 517 allows for appeals against acts or decisions of the liquidator, but as correctly pointed out by the Petitioners and NSF Engineering, the Official Receiver's letter dated 21.8.2024 merely stated: “Pegawai Penerima sebagai penyelesai interim syarikat TH Heavy Engineering Berhad tiada halangan untuk pihak penyumbang (contributory) membantah Petisyen 175 yang difailkan oleh pemiutang-pemiutang di atas tertakluk kepada kebenaran dari Mahkamah di bawah Seksyen 486(2) Akta Syarikat 2016 [Akta 777].” [37] This cannot be regarded as an “act or decision” of the liquidator that falls within the ambit of section 517 requiring modification by the court. [38] The Directors' attempt to rely on the court's inherent jurisdiction is equally problematic. In Ngan Tuck Seng & Anor v Ngan Yin Groundnut Factory Sdn Bhd [1999] 5 MLJ 509, the respondent company applied to strike out a winding-up petition on grounds that it constituted an abuse of process, with the petitioners arguing that companies courts had no inherent jurisdiction to strike out such petitions. The High Court in that case, after considering the Federal Court decision in R Rama Chandran v The Industrial Court of Malaysia & Anor [1997] 1 MLJ 145, held that: “It is clear from the decision in R Rama Chandran that inherent jurisdiction, being part of the common law powers enjoyed and possessed by a High Court, of which a companies court is one, is a separate and distinct source of jurisdiction enjoyed by a court independent of any enabling statute or legislation... Accordingly, I have no hesitation in holding that a companies court does exercise inherent jurisdiction.” [39] While I accept this principle that the winding-up court possesses inherent jurisdiction, this does not dispense with the need to comply with the specific procedural requirements established for winding-up proceedings under the Companies (Winding Up) Rules 1972, nor does it permit an application that lacks a proper legal basis under the CA

[40] The Directors' reference to the case of Hock Seng Construction Sdn Bhd & Anor v Yeoh Poh Owi & Anor [2001] 4 CLJ 1 (CA) is misconceived as they appear to rely on the dissenting judgment of Abdul Hamid Mohamad JCA rather than the majority decision. The majority (Shaik Daud Ismail JCA and Abdul Kadir Sulaiman JCA) actually dismissed both the motion for extension of time and the appeal itself, holding that there was “was insufficient material placed before the court to warrant the exercise of discretion to allow for the extension of time. No reasons were advanced by the applicant in the affidavit in support of the application.” [41] In any case even if the dissenting judgment is correct, Hock Seng Construction is distinguishable from the present matter. There, the appellants sought extension of time to include only two and a half pages of witness statement evidence that had been inadvertently omitted from an appeal record that was otherwise filed within time, due to the recent practice of tendering typewritten witness statements. The present case involves more fundamental procedural defects where the application fails to comply with the mandatory requirement under Rule 7 of the Companies (Winding Up) Rules 1972 of being made by motion, and more importantly, lacks any proper legal basis under the CA 2016 as neither section 517 nor section 486(2) applies to the circumstances presented. [42] In light of these fundamental procedural defects, the application in Enclosure 96 must be dismissed. The application fails to comply with the mandatory procedural requirements for applications in winding-up proceedings and lacks a proper legal basis under the CA 2016. While I am mindful of the importance of substantive justice, this cannot be achieved by entertaining an application that is procedurally flawed to this extent. [43] Notwithstanding the determination I have reached above, I will, out of an abundance of caution, proceed to address the substantive issues raised in this application in the event that my decision is later found to be erroneous. Residual Powers of Directors in a Company Under Creditors’ Voluntary Liquidation [44] The Directors, together with Star Kris, contend that they possess residual powers to oppose the Petition, notwithstanding that the company is undergoing CVL and is under the control of the Official Receiver as court-appointed Interim Liquidator. Their primary contention is that while directors’ powers are generally transferred to a liquidator, directors universally retain certain residual powers, including the power to oppose winding-up petitions. They rely heavily on Twin Unitrade Sdn Bhd v TSK Hardware Sdn Bhd [2020] MLJU 2326 (HC), where Justice Nadzarin Wok Nordin held that directors of a company under judicial management retained residual powers to oppose an application to set aside the judicial management order. They submit that this case decisively supports their position, as it recognises directors’ residual powers in matters not falling within the purview of insolvency representatives. Additionally, they distinguish the Singapore Court of Appeal case of Hin Leong Trading (Pte) Ltd v Rajah & Tann Singapore LLP [2022] 2 SLR 253, arguing that it supports rather than undermines their position, as it acknowledges that residual powers would exist if the insolvency proceedings had been initiated by creditors rather than directors. [45] The Petitioners, together with NSF Engineering and the Official Receiver, oppose the application on the ground that directors of a company in CVL do not possess residual powers to oppose a petition to convert the voluntary liquidation to a court-ordered one. They rely on section 450(6) of the Companies Act 2016, which states that once a liquidator is appointed, the directors' powers come to an end unless their continuation is approved either by the committee of inspection or, in the absence of such a committee, by the creditors. [46] They cite the Federal Court decision in Zaitun Marketing Sdn Bhd v Boustead Eldred Sdn Bhd [2010] 2 MLJ 749, where the DGI granted a former director (who was neither a contributory nor creditor) permission to use the company's name to continue litigation after the company was wound up. The court held that since a director of a company in liquidation is not a party to the liquidation, “a court will not authorise him to launch or to continue proceedings or even to defend them. As such, the liquidator had no power to confer such authority since he could not do what the court would not do on his default.” The Petitioners further argue that even if residual powers exist, they are limited to challenging the very order appointing liquidators, as clarified in Hin Leong, and do not extend to opposing a petition to convert a voluntary liquidation which the directors themselves commenced. [47] I have considered the arguments of both parties and the authorities cited. The key issue for determination is whether the Directors of the Respondent retain residual powers to oppose the winding-up petition, notwithstanding that the company is under CVL and the Official Receiver has been appointed as Interim Liquidator by this court. [48] The starting point for analysis must be the statutory framework. Section 450(6) of the CA 2016 is clear: “On the appointment of a liquidator, all the powers of the directors shall cease, except if the continuance of the powers is approved by – (a) the committee of inspection; or (b) if there is no such committee, the creditors.” [49] This provision establishes the general rule that directors’ powers cease upon the appointment of a liquidator, with limited exceptions that require specific approval. In the present case, no evidence has been presented that any such approval has been given for the Directors to retain powers to oppose the petition. [50] The Directors seek to distinguish between a permanent liquidator and an interim liquidator, arguing that section 450(6) applies only to the former. I find this distinction artificial in the present context. Section 440(2) of the CA 2016 explicitly provides that an interim liquidator “shall have all the functions and powers of a liquidator in a creditors’ voluntary winding up subject to limitations and restrictions as may be prescribed by the rules relating to winding up.” [51] Similarly, section 476(2) of the CA 2016 provides that “The interim liquidator shall have and may exercise all the functions and powers of a liquidator subject to such limitations and restrictions as may be prescribed in the rules or as the Court may specify in the order appointing him.” The Court Order dated 27.5.2024 appointing the Official Receiver as Interim Liquidator explicitly granted every function and power of Liquidators provided for under the Companies Act 2016. These provisions, read together, indicate that an interim liquidator possesses substantially the same powers as a permanent liquidator, which necessarily includes the power to determine whether to oppose or not oppose the petition. [52] The concept of directors’ “residual powers” is a common law doctrine that must be understood within its proper scope and context. I accept that in certain limited circumstances, directors may retain residual powers after a winding-up order or the appointment of a liquidator. However, the authorities establish that such residual powers are of a narrow scope and apply in specific situations. [53] The leading case on this point is the Singapore Court of Appeal decision in Hin Leong Trading (Pte) Ltd v Rajah & Tann Singapore LLP [supra]. In that case, the directors themselves had initiated interim judicial management proceedings, but subsequently sought to obtain an injunction to restrain the company from getting advice from their lawyers, Rajah & Tann, who were advising the judicial manager. The Singapore Court of Appeal found this position fundamentally unfair, as the directors were attempting to exercise residual powers after they themselves had divested their management authority by commencing the judicial management. [54] There, the Singapore Court of Appeal, after considering the relevant authorities including the Malaysian cases of Sri Hartamas Development Sdn Bhd v MBF Finance Bhd [1991] 3 MLJ 325 (SC) and Taman Sungai Dua Development Sdn Bhd v Goh Boon Kim [1997] 2 MLJ 526 (CA), held at paragraph 62: “As the cases establish, upon a court order placing a company under judicial management or in liquidation, with insolvency representatives being appointed concomitantly over the company, the company's directors retain residual powers in the limited situation where the company seeks to appeal against or otherwise challenge the very order appointing the judicial managers or liquidators, and must therefore act through its directors. This residual power is necessarily of a narrow scope, to be invoked only in very specific situations.” Crucially, the Court of Appeal specifically acknowledged that while the company could not claim residual powers when it initiated the interim judicial management proceedings itself, the situation would be different, and such residual powers would exist, had the proceedings been initiated by the creditors. [55] The rationale for this limited residual power is clear: where the very juridical basis on which directors’ powers have been removed is being challenged, it would be circular to say that the directors lack power to mount such a challenge. This is because the authority of the insolvency representative stems from the very order being challenged. However, as the Singapore Court of Appeal in Hin Leong observed at paragraph 56, this rationale does not apply where the directors themselves initiated the insolvency proceedings: “However, it seems to us, that bearing in mind that a judicial management order can only be made at the instance of the company itself acting in accordance with the resolutions of the board or the shareholders or upon the application of a creditor, it would be incongruous to allow the directors power to challenge their own actions or those of the shareholders.” [56] In the present case, it is undisputed that the CVL was commenced by the Directors themselves when they executed a Statutory Declaration dated 8.9.2023 declaring that the Respondent cannot by reason of its liabilities continue its business. They appointed Andrew and Ashvin as JIL. Having voluntarily ceded their powers to manage the company to the JIL, they cannot now claim residual powers to oppose a petition that would merely place the liquidation under court supervision. This is not a case where the Directors are challenging the very order appointing the liquidator or the basis of the company’s insolvency. [57] The distinction between challenging the appointment of a liquidator and opposing a petition to convert a voluntary liquidation to a court-ordered one is crucial. The former falls within the narrow scope of residual powers recognised by the courts; the latter does not. In Taman Sungai Dua Development Sdn Bhd (Previously Known As Supershine (M) Sdn Bhd) v Goh Boon Kim [supra], the company applied for a stay of the powers and duties of provisional liquidators pending appeal against their appointment, with the petitioner raising a preliminary objection that directors had no capacity to instruct solicitors once provisional liquidators were appointed. The Court of Appeal rejected this objection and granted the stay application. The court held at page 533: “In the present case, the winding-up order had not yet been made... It is common ground that notwithstanding the appointment of a provisional liquidator, the board still has residuary powers, for example, it can instruct solicitors and counsel to oppose the current petition and, if a winding-up order is made, to appeal against that order.” [58] Crucially, the Court of Appeal considered it pivotal that the case before it was one in which “the company itself is appealing against the order appointing the provisional liquidators” and where the “winding-up order had not yet been made”. Similarly, in Sri Hartamas Development, the company was challenging a winding-up order. These cases do not support the proposition that directors retain residual powers to oppose a petition that would merely change the nature of a liquidation process they themselves initiated. [59] I note the Directors' reliance on Twin Unitrade Sdn Bhd v TSK Hardware Sdn Bhd [supra], where directors of a company under judicial management sought to oppose an application by a creditor to set aside the judicial management order they had obtained. The proposed intervener contended that the directors no longer had any jurisdiction to affirm affidavits and that only the Judicial Manager could do so. The Directors seek to rely on Justice Nadzarin's holding that “the director of a company under a JM Order does not lose his residual powers in the sense of or not involving any matters not coming within the purview of the Judicial Manager once a JM Order is obtained” and that “the board of directors do continue to hold certain residuary powers such as authority to instruct solicitors and counsel to oppose an Application to set aside the JM Order and to appeal against any such order made.” [60] However, while Justice Nadzarin did recognise residual powers of directors in that case, it is distinguishable on several grounds. First, Twin Unitrade involved directors opposing an application to set aside a judicial management order which they had obtained. There was, therefore, a parity of interest between the directors and the company in opposing that application, as the court noted that “it would be unjust to disallow and/or deny the Applicant in such situations the right to be heard and to oppose [the application] which has inter alia the effect of setting aside the very JM Order which the Applicant had applied for.” In contrast, here, the Directors are not defending an order they obtained but opposing a petition that would place a liquidation they commenced under court supervision. Second, Twin Unitrade was decided before Hin Leong, which provided greater clarity on the limited scope of directors' residual powers. Third, the factual context is entirely different - in Twin Unitrade, the Judicial Manager had no knowledge of events prior to their appointment, which was a key factor in the court's decision, whereas in our case, the issue is not about historical knowledge but whether directors can oppose a petition to convert a voluntary liquidation into a compulsory one. [61] Moreover, I find persuasive the Federal Court’s clear pronouncement in Zaitun Marketing at paragraph 20: “Since a director — or more appropriately a former director — of a company in liquidation is not a party to the liquidation a court will not authorise him or her to launch or to continue proceedings or indeed to defend them.” This principle was subsequently applied to voluntary liquidation in Tan Sri Datuk Tee Hong Seng & Ors v Lee Kin Tong @ Lee King Hoon & Ors [2017] 1 LNS 1053 (CA). [62] The Directors’ counsel asks rhetorically: “Who else can oppose the petition but the respondents themselves?” The answer is provided by the CA 2016: creditors and contributories. Section 486(2) specifically enables “any creditor or contributory” to apply to the court with respect to any exercise of power by the liquidator. Indeed, Star Kris is a creditor that is opposing the Petition. If any contributory wishes to oppose the Petition, it can apply for leave under section 486(2) of the CA 2016. The fact that none has done so is a matter of choice, not a justification for directors to assume powers they do not possess. [63] Finally, I note with concern the dangerous proposition advanced by the Directors. In the Respondent's affidavit affirmed by Adinan on 8.3.2024, they suggested that upon the expiry of the JIL's tenure on 31.1.2024, “the management and control of the respondent has now reverted back to the board of the respondent in their residual powers.” This assertion has no basis in law. In Re CW Constructions Pty Ltd (recs and mgrs. apptd) (in liq) [1996] 22 ACSR 78 (Supreme Court of South Australia), the liquidator had been released after completing his administration, leaving a vacancy in the office of liquidator. A former director sought to regain control of the company, arguing that the winding up had ended and directors could resume control. However, Burley J firmly rejected this proposition, holding that “I do not consider that the company is able to pursue any action against the applicant and/or the receivers unless a liquidator is appointed and makes a decision to pursue such proceedings. It is not open to Mr Cirillo to regain control of the company because, for the reasons I have stated above, the company may only remain in existence to enable the administration of the receivership to be completed or to enable proceedings to be brought against the applicant and/or the receivers.” The court emphasised that when there is a vacancy in the office of liquidator, the power does not revert back to the directors, and only the court can fill that vacancy. This is precisely what occurred when this court appointed the Official Receiver as Interim Liquidator on 27.5.2024. [64] For these reasons, I find that the Directors of the Respondent do not possess residual powers to oppose the winding-up petition. Residual Powers, If Any, Must Be Exercised Collectively By The Board [65] The Directors contend that even if the residual powers of directors are to be exercised collectively by the Board of Directors rather than individually, no challenge has been raised regarding Jauhari’s authority to affirm affidavits on behalf of the Respondent company. They argue, relying on the Court of Appeal case of Equiticorp Holdings Ltd v United Securities Sdn Bhd [2007] MLJU 890 (CA), that where a single director signed an affidavit in support and stated he was authorised to do so, the preliminary objection for lack of locus standi was dismissed. The Directors further submit that the Petitioners have not challenged Jauhari’s authority to affirm affidavits as not being duly authorised by the Board, and had they done so, “the relevant resolution or authorisation could have been produced.” [66] The Petitioners, together with NSF Engineering, argue that even if residual powers existed (which they deny), such powers would vest in the Board of Directors as a collective body, not in individual directors. They rely on Sanyan Sdn Bhd v Sanyan Lumber Sdn Bhd [2012] MLJU 110 (CA), where the court held that the authorities cited (Sri Hartamas and Equiticorp) refer to the residual power of the Board of Directors and not the power of any individual director. Similarly, they cite African Network Information Centre (AfriNIC) Ltd v Cloud Innovation Ltd & Anor [2024] SCJ 473 (Mauritius Court of Appeal), where the court confirmed that a single director would not be able to exercise residual power on his own as the company is managed by the board of directors. The Petitioners also point out that the Warrant to Act dated 5.3.2024 relied on by Messrs Wajdi Mohamad & Company was signed solely by Jauhari, not pursuant to any mandate or resolution by the Board of the Respondent. [67] I turn now to consider whether any residual power that might exist must be exercised collectively by the Board, and whether there is evidence that the director affirming the affidavit was duly authorised by the Board. The central issue regarding the exercise of any purported residual power requires an examination of how such power, if it exists at all, should be properly exercised. [68] It is a fundamental principle of company law that the power to manage a company vests in its board of directors collectively, not in individual directors acting unilaterally. In Sanyan Sdn Bhd v Sanyan Lumber Sdn Bhd [2012] MLJU 110, the High Court faced a similar issue where Mr Clement Wong purported to act for the respondent company but had been instructed by only one of two directors, with the other director affirming an affidavit stating that the Board had never appointed Wong to act for the company. This principle applies equally to any residual powers that may exist after the commencement of winding-up proceedings. The court in Sanyan expressly held that “the directors of a company act collectively and not individually unless there is an express delegation or authorization... The authorities cited above also refer to the residual power of the Board of Directors and not to the power of any individual director” and concluded that “it must be held that Mr. Clement Wong has no authority to act for the respondent company in this application” due to the absence of any board resolution authorising his appointment. This distinction is crucial in determining whether Jauhari could properly affirm an affidavit purportedly on behalf of the Respondent. [69] The more recent authority of African Network Information Centre (AfriNIC) Ltd v Cloud Innovation Ltd & Anor [supra] reinforces this position. In that case, the issue arose as to whether a single director, Mr. Eshun, could exercise residual powers on his own in respect of the company. The court had to determine whether residual powers vested in individual directors or the board collectively. The Mauritius Court of Appeal held that a single director (Mr. Eshun) “would not have been able to exercise the residual power on his own as the company is managed by the board of directors.” This clearly establishes that even where residual powers might exist, they are to be exercised collectively by the board, not by individual directors. [70] In the present case, the evidence indicates that Jauhari purported to act alone in affirming the affidavit in support of the application. The Warrant to Act dated 5.3.2024, which Messrs Wajdi Mohamad & Company relies on to establish their authority to act for the Respondent, was signed solely by Jauhari. There is no evidence before this court of any board resolution or collective decision by the directors authorising him to act on behalf of the Respondent in these proceedings. [71] The Directors' reliance on Equiticorp Holdings is misplaced for several reasons. In Equiticorp, a winding-up order had been made against the respondent company on 30.1.2007, and the company gave notice of appeal on 16.2.2007 seeking a stay of the winding-up order pending appeal. The Court of Appeal in Equiticorp specifically noted that “The summons was supported by the affidavit of Cheah Theam Kheng, a director of the respondent. In it he says that he is authorised to make the affidavit on the respondent's behalf.” The court accepted this assertion of authority without challenge because, crucially, the company was challenging the very winding-up order that had divested the directors of their powers - a situation falling squarely within the narrow scope of residual powers recognised in Sri Hartamas and other authorities. In the present case, there is no clear statement in Jauhari's affidavit establishing that he was duly authorised by the Board to affirm the affidavit on behalf of the Respondent, and more fundamentally, this is not a case where the directors are challenging the order that appointed the liquidator, but rather opposing a petition that would merely convert a voluntary liquidation they themselves commenced into a court-supervised one. [72] The Directors’ argument that the Petitioners have not specifically challenged Jauhari’s authority is also unpersuasive. The Petitioners have clearly argued in their written submissions (Enclosure 112) that “even assuming that the residual power exists, the powers is only given to the Board of Directors as a body and not to individual directors.” This challenge clearly encompasses the question of whether Jauhari was properly authorised to affirm the affidavit. Moreover, the burden of proving authority rests with the party asserting it – in this case, the Respondent. It is not incumbent on the Petitioners to disprove what has not been adequately established in the first place. [73] Furthermore, the suggestion by the Directors that “the relevant resolution or authorisation could have been produced” had a challenge been raised earlier merely underscores the fact that no such resolution or authorisation has been placed before this court. If such a resolution exists, it should have been exhibited to establish Jauhari’s authority from the outset. [74] It is also worth noting that according to the evidence, at the time the CVL commenced on 8.9.2023, the Board of the Respondent comprised of 4 Directors. A CCM search of the Respondent printed on 6.3.2024 revealed that there were 3 Directors remaining as at 6.3.2024 - Jauhari, Adinan, and Abdul Manap bin Haji Ali Hasan. Despite this, there is no evidence of any collective decision by these remaining directors authorising Jauhari to act on behalf of the Respondent. [75] In conclusion on this issue, I find that even if residual powers existed (which I have found they do not for reasons stated earlier), such powers would need to be exercised collectively by the Board of Directors, not by individual directors acting unilaterally. In the absence of any evidence of a board resolution or collective decision authorising Jauhari to affirm the affidavit on behalf of the Respondent, I find that he lacked the requisite authority to do so. This constitutes an additional ground for dismissing the application in Enclosure 96. Conclusion [76] In conclusion, having carefully considered all the submissions and authorities, I find that the application in Enclosure 96 fails on both procedural and substantive grounds. Procedurally, the application does not comply with the mandatory requirements of the Companies (Winding Up) Rules 1972 and lacks a proper legal basis under the Companies Act 2016. Substantively, I find that once directors place a company into Creditors’ Voluntary Liquidation, they do not retain residual powers to oppose a petition that merely seeks to convert that voluntary liquidation to court supervision. Any “residual powers” recognised in law are narrowly confined to challenging the very order appointing liquidators, not to opposing proceedings that would simply change the nature of a liquidation process the directors themselves initiated. The application is accordingly dismissed with costs to be paid by the individual directors personally. 23 June 2025 ATAN MUSTAFFA YUSSOF AHMAD Judge Kuala Lumpur High Court (Commercial Division) Counsel: For the Petitioners: David Mathews with Olivia Loh, Koh Jo Vin and Lai Ann Xing (Messrs Mathews Hun Lachimanan) For the Directors of the Respondent: Wajdi Mohamad with Hajar Mardhiah (Messrs Wajdi Mohamad & Company) For the – NSF Engineering Sdn Bhd: Joyce Pang (Messrs Joyce Pang) For the Opposing Creditor – Star Kris Services Sdn Bhd: Tay Li Sheng (Messrs S. Ravenesan) For the Official Receiver Wardah Nasuha Safian (Jabatan Insolvensi Malaysia)