Teoh Sze Wei v Qa Advisory Sdn Bhd (WA-28NCC-1236-12/2024)

TEOH SZE WEI (NRIC No.: 810906-08-5851)

WONG SUT YI (NRIC No.: 800601-14-5308) … PETITIONERS

QA ADVISORY SDN. BHD. (Company No.: 202201031254 (1476951-D))

CHUA KEE SEONG (NRIC No.: 771213-11-5393)

TAN WENG KHAI (NRIC No.: 870112-06-5351) … RESPONDENTS

These Grounds concern an Appeal (Encl 57) filed by the Petitioners (“P1&P2”) against my decision on 28.10.2025 dismissing the Amended Petition (Encl 7) dated 25.2.2025.

Encl 7 was filed to wind up the First Respondent (“QA”) under s. 456(1)(h) of the Companies Act 2016 (“CA 2016”) on the basis it was just and equitable to do so.

Encl 7 also prays that a liquidator be appointed to enquire into the affairs of QA and for other ancillary relief. The ancillary relief sought include, inter alia, a claim against the Second (“R2”) and Third (“R3”) Respondents for an indemnity for all losses suffered by QA for the late submission of the Financial Statements of QA for the Financial Year ended 31.12.2023 (“AFS 2023”).

The winding-up was sought on the ground that the substratum of QA had failed. The Petitioners also allege that there have been acts of gross mismanagement of QA by R2 and R3, for: a. operating the business of QA without a valid licence; b. irregular dealings with third parties; c. payment of commissions not accounted for, which are to be held on constructive trust for the benefit of QA; d. the refusal by R2 and R3 to approve the Draft AFS 2023.

P1&P2 claim that the cumulative effect of the above is that pursuant to Encl 7, it is just and equitable QA be wound up under s. 465(1)(h) of CA 2016. And that a Liquidator be appointed to enquire into the affairs of QA together with ancillary relief be granted against R2 and R3.

All references to shares herein are references to paid up ordinary shares in QA. All references to ‘sections’ are with reference to sections of CA 2016.

The contents of these Grounds are as set out in the table below: Contents Para No INTRODUCTION 4-7 THE MODE OF PROCEEDINGS 8-12 BACKGROUND FACTS 13-18 The Roles of the Players 19-20 QA’s Business 21-30 SUBSTRATUM HAD FAILED 31-39 The Ancillary Complaints 40-45 The Audited Financial Statements 46-52 CONCLUSION 53-54

It is trite that the burden to prove that QA should be wound-up under s. 456(1)(h) lies squarely with P1&P2.

In Tay Bok Choon v Tahansan Sdn Bhd [1987] 1 MLJ 433 at the headnote at (3): “(3) if allegations are made in affidavits by the petitioner and those allegations are credibly denied by the respondent’s affidavits, then in the absence of oral evidence of cross-examination, the judge must ignore the disputed allegations. The judge must then decide the fate of the petition by consideration of the undisputed facts.”

In the absence of a viva voce enquiry and resolution of the disputed facts, the winding-up Petition should be dismissed. The Federal Court in Serac Asia Sdn Bhd Sepakat Insurance Brokers Sdn Bhd [2013] 5 MLJ 1 at para 40, following Tahansan (supra) held: “The courts in such a situation should only confine themselves and decide the outcome of the case by considering only the incontrovertible facts. In Tay Bok Choon v Tahansan Sdn Bhd [1987] 1 MLJ 433, a case involving a petition for the winding up of a company, with both sides presenting contradicting affidavits, the Privy Council in their advice stated that: “If allegations are made in affidavits by the petitioner and those allegations are credibly denied by the respondent's affidavits, then in the absence of oral evidence or cross-examination, the judge must ignore the disputed allegations. The judge must then decide the fate of the petition by consideration of the undisputed facts.”

P1&P2 did not apply to cross-examine R2 and R3 and it is trite that absence of cross-examination, the Court must ignore disputed allegations and may only decide the fate of the Petition on undisputed facts.

As such, if the allegations made by P1&P2 in Encl 7 which would justify winding-up QA are disputed and credibly denied by R2 and R3, then Encl 7 must be dismissed.

P1 and P2 are directors and shareholders of QA.

QA was established to provide services, inter alia, in relation to human resource affairs and business management.

R2 and R3 are also directors and shareholders of QA. QA was incorporated on 23.8.2022 with R2 and R3 as the first directors.

At the time of incorporation, QA had paid-up capital of RM100.00 comprising 100 shares, of which P1 and R2 each held 40 shares and R3 held 20 shares. Further shares were allotted by QA on 12.10.2022, and thereafter, P1 and R2 held 120,000 shares each and R3 held 60,000 shares.

On 22.1.2024, P1 and R2 transferred 30,000 ordinary shares each to P2. Thereafter, P1 held 90,000 shares, P2 held 60,000 shares, R2 held 90,000 shares and R3 held 60,000 shares.

On 22.1.2024, P2 was appointed as a director of QA.

P1 was to provide the initial working capital and invested approximately RM300,000.00 in QA. In addition, P1 procured investments from third parties of approximately RM2.7m. P1 was not involved in the day-to-day operations of QA and generally just monitored the financial position of QA in order to safeguard his and the third parties’ investments.

P2 was appointed as director of QA on 22.1.2024, specifically to monitor the financial transactions of QA and was primarily in charge of collections. P1 and P2 allege that R2 was to secure an Agensi Pekerjaan Swasta Class C Licence (“APS Licence”) issued by the Ministry of Human Resources for use by QA. R2 was to be involved in the day-to-day operations of QA, having prior experience in human resource affairs and the procurement of foreign workers. R3, with similar prior experience, was appointed as Managing Director of QA and was therefore primarily responsible for QA’s operations.

In Encl 7 at para 13 and 14, it is P1&P2 pleaded case that in or around August 2022, P1 was approached by R2 to invest in the business of providing consultancy services, inter alia, in relation to human resource affairs and business management (“the Consultancy Services”). And that R2 informed P1 of his intention to incorporate a company for the purpose of providing such Consultancy Services.

And also, that R2 represented that the intended company, once incorporated, would be able to make use of the APS Licence granted to Agensi Pekerjaan Sinar Jaya Warisan Sdn Bhd (“Sinar Jaya”), in which R2 had an interest.

It is important to appreciate the difference between providing Consultancy Services and with the business of providing services of actually procuring foreign workers for clients (“Procurement Services”). The former did not require an APS Licence. However, an APS Licence was necessary for Procurement Services, being actual procurement of foreign workers for clients.

R2 further informed P1 that R3 would also be involved in the provision of the Consultancy Services as he had the necessary experience.

P1&P2 claim that based on the representations made by R2 to P1, P1 agreed to participate in the intended company purely by providing investment funds, as P1 had no experience in providing Consultancy Services.

QA was thus incorporated.

In this respect, R2 and R3 contend that QA is in the business of providing Consultancy Services. On that basis, R2 and R3 maintain that QA’s business was only to render Consultancy Services for guiding, advising and assisting customers with their respective needs of human resources and foreign labour workforce, not procurement.

Upon understanding the needs and requirements of QA’s clients, QA would then cooperate with Sinar Jaya, with its APS Licence, that was able to procure foreign labour, see Encl 15, para 53 and Exhibit CKS-4 (pp. 132 to 144) where Sinar Jaya would bill QA for procurement services.

In contrast, P1&P2 claim that QA was incorporated for the sole purpose of providing Procurement Services to clients. For that purpose, it is said that QA required an APS Licence. To procure foreign workers without such a licence would be illegal, and to which, it is said, P1 would never agree.

It is not disputed that QA did not possess an APS Licence.

The crux of this case is the nature of the business undertaken by QA. The issue is whether, as P1&P2 claim, QA undertook Procurement Business or as R2 and R3 claim, QA undertook only Consultancy Business.

P1&P2 claim that QA required an APS Licence and without which, QA was unable to lawfully provide Procurement Services. And therefore, the entire substratum of QA had failed. In Liew Jui Hua & Ors v Johor Property (M) Sdn Bhd (1996) MLJU 454, it was held that a loss of substratum would be enough to wind-up a company under s. 465(1)(h).

P1&P2 submit that by reason of the failure of the substratum, an order for the winding-up of QA ought to be granted.

I accept that that if QA did carry on the business of Procurement Services without an APS Licence, it would amount to carrying on business unlawfully. And this would be unacceptable. However, the carrying on of Procurement Business by QA is heavily disputed by R2 and R3. They maintain that QA only provided Consultancy Services.

In support, R2 and R3 submit that QA’s CCM records show that its purpose is not to procure foreign workers but to provide consultancy services on human resources. QA’s purpose as per a CCM search is as follows: “Nature of Business: Business management consultancy services; human resources affairs; human resources consultancy services”.

Indeed, R2 and R3 maintain that QA was never formed to provide Procurement Services. Nor did it carry out such Procurement Services. What is telling is that by Encl 7 (see paras 21 and 22 above), P1&P2 pleaded case that P1 was approached by R2 to invest in the business of providing Consultancy Services, inter alia, in relation to human resource affairs. And further, that R2 informed P1 of his intention to incorporate a company for the purpose of providing such Consultancy Services. No mention is made in Encl 7 of QA providing Procurement Services. P1&P2’s pleaded case appears to support R2 and R3’s version of events. Further reliance on R2’s representation that QA could make ‘use’ of Sinay Jaya’s APS Licence does not help P1&P2’s case, as such reliance is consistent with R2 and R3’s version of relying on Sinay Jaya to provide Procurement Services, when required.

In contrast, in paras 21 to 28 of Encl 7, P1&P2 allege that there were several agreements with QA which stated that it possessed an APS Licence. And further, it is also alleged that R2 and R3 agreed for QA to provide such services to third parties based on quotations by QA signed by R3 as MD; in such quotations, there were misrepresentations that QA had a valid APS Licence.

I must say P1&P2’s evidence is unconvincing. In my mind, this dispute as to whether QA carried out actual Procurement Services without an APS Licence or merely provided Consultancy Services, cannot be decided on affidavits alone. The failure of QA’s substratum has therefore been genuinely disputed. This part of P1&P2’s case therefore fails.

Further, in my assessment of P1&P2’s case, it appears that the loss of substratum for being unable to provide Procurement Services in the absence of an APS Licence, is the main plank of their case. And the other complaints are largely ancillary to and rest on this primary complaint. For the reasons below, without succeeding on the primary complaint (which I have found that P1&P2 have not) their ancillary complaints will similarly fall.

The ancillary complaints deal with 4 main areas, but all where QA was allegedly denied fees for Procurement Services. It seems clear that these complaints cannot succeed if QA has not conducted Procurement Services. Indeed, I have held that P1&P2 have failed to prove that QA did carry out Procurement Services.

First, it is claimed that the services for procuring foreign workers for QA’s clients were provided by QA’s employees acting on behalf of Sinar Jaya, instead of QA. The complaint is based Sinar Jaya charging fees for Procurement which allegedly, should have been earned by QA. The claim fails in limine as QA was not in the business of providing Procurement Services,

Secondly, it is claimed that QA entered into arrangements with Afia Overseas and Sinar Jaya, both foreign worker recruitment agencies for services for the recruitment of foreign workers. For Sinar Jaya, in which R2 had an interest, a commission was payable by QA to Sinar Jaya for each successful worker recruitment application. The complaint is that QA should not pay for procurement when such Procurement Services should have been done by QA. Again, this could only succeed if QA was in the business of providing Procurement Services, which fails.

Thirdly, there were irregular dealings between QA and Bear Living Sdn Bhd and with Archi Metal Sdn Bhd for the recruitment of foreign workers from Bangladesh. And with SNT Universal Corporation Sdn Bhd, to obtain approvals from the authorities for the recruitment of such foreign workers.

Fourthly, based on QA’s records, SNT paid total commissions of RM7,653,162.25 to R2 and R3 and RM703,000.00 from Afia Overseas, which should be payable to QA (“Commissions”). P1&P2 submit that the Commissions are to be held on constructive trust for QA.

These complaints are made on the basis that it is QA which should be earning fees for Procurement Services for foreign workers. These claims fail as QA did not provide Procurement Services nor were they qualified to do so. If no Procurement Services are shown to have been provided by QA, then the ancillary claims fail.

The Draft Audited Financial Statements and tax returns of QA for the Financial Year ended 31.12.2023 (collectively, “the Draft AFS”) were prepared by QA’s auditors by 15.7.2024 and were circulated to P1&P2 and R2 and R3 for their approval and confirmation. P1&P2 claim that R2 and R3 failed or refused to approve the Draft AFS. And therefore, there was a breakdown of the relationship between the parties. P1&P2 want an order for an indemnity from R2 and R3 for losses caused by the late filing.

However, R2 and R3 maintain that there was no such refusal and that this allegation is also heavily disputed.

In Encl 15 at paras 61 and 62, R2 and R3 maintain that P1&P2 did not consult with R2 and R3 on the preparation of the Draft AFS. There were no board meetings called to address this alleged issue, which it is said, was the proper forum for resolving such issues and not by the Petition in Encl 7.

It is also said that not only were R2 and R3 not consulted, but demands were also made of them to sign and approve the Draft AFS without a reasonable time to review it before approving, see for example, in Exhibit A-25 of Encl. 3.

Given the heavily disputed events of the failure to finalise the Draft AFS, it cannot be said that P1&P2 have proven that R2 and R3 should indemnify QA for losses caused by such failure.

In any event, in a Petition filed to wind-up a company under s. 456(1)(h), the only remedy available is a winding-up order, see the Court of Appeal in See Teow Guan v. Kian Joo Holdings Sdn. Bhd. [1995] 3 MLJ 598 at pp. 604 to 605.

As such, orders against R2 and R3 for the indemnity in prayer e of Encl 7, cannot succeed. In the same vein, any claim (if actually made in Encl 7) that the Commissions are to be held on constructive trust by R2 and/or R3 for QA cannot be the subject of Encl 7.

In my mind, when the disputed allegations are ignored, there is insufficient undisputed evidence upon which QA should be wound up. In short, P1&P2 have simply not proved their case.

I therefore dismissed Encl 7, the Amended Petition, with costs of RM7,500, subject to allocator. Dated the 18th day of December 2025 ...........................tt............................... YA TUAN SAHERAN SUHENDRAN JUDICIAL COMMISIONER OF THE HIGH COURT (COMMERCIAL 11) (INSOLVENCY 2) OF KUALA LUMPUR IN THE TERRITORY, MALAYSIA Counsel for the Petitioners: Solicitors: Mahathir bin Abdullah + Goh Chin How Messrs. Wong Neoh & Partners (Petaling Jaya) Case References: • Liew Jui Hua & Ors v Johor Property (M) Sdn Bhd (1996) MLJU 454 • See Teow Guan v. Kian Joo Holdings Sdn. Bhd. [1995] 3 MLJ 598 • Serac Asia Sdn Bhd Sepakat Insurance Brokers Sdn Bhd [2013] 5 MLJ 1 • Tay Bok Choon v Tahansan Sdn Bhd [1987] 1 MLJ 433 Legislation References: • Companies Act 2016 (“CA 2016”) Decision Date: 28th October 2025 Counsel for the