Everegion Sdn Bhd (Co. No.: 200101025361 (561119-M)) v Puan Chan Cheong (Nric No.: 681021-01-5989) (WA-22NCC-378-08/2021 (Disatukan Dengan WA-22NCC-379-08/2021))

This action was heard together with Suit WA-22NCC-379-08/2021 (‘Suit 379’) that was transferred from Court NCC1. By an order dated 8.11.2021, Justice Anand Ponnudurai had ordered that Suit 379 be consolidated with Suit 378 and for Suit 379 to be heard together with Suit 378 as a single action thereunder.

In both Suit 378 and Suit 379, the Plaintiffs therein had filed an application for summary judgment against the Defendant. Both the applications (under Enclosures 5) were heard before me on 30.11.2021.

After hearing oral submissions from counsel, I allowed the Plaintiffs’ respective applications under Enclosure 5 for summary judgment in both Suit 378 and Suit 379. The Defendant, being dissatisfied with my decision has filed an appeal. I set out below my grounds for the decision.

The parties had proceeded based on the Suit 378 on the basis that the decision in respect of Suit 378 would also apply to Suit 379. Accordingly, in this judgment, I will only refer to the facts in Suit 378.

Everegion Sdn Bhd (‘ESB’), who is the Plaintiff in this action (‘Suit 378’) based its claim on a Put Option Agreement dated 25.1.2021 3 in respect of 5,000,000 units of warrants in G3 Global Berhad (‘G3’) (‘ESB Option Warrants’) with the purchase price of RM 7,500,000.00 (‘ESB Option Price’) entered into between the Plaintiff and the Defendant (‘the ESB Put Option Agreement’).

Medinis Sn Bhd’s (‘MSB’) claim in Suit 379 is based on a similar Put Option Agreement dated 25.1.2021 for 5,000,000 units of warrants in G3 (‘MSB Option Warrants’) with the purchase price of RM 7,500,000.00 (‘MSB Option Price’) and a further Put Option Agreement dated 9.2.2021 (‘MSB Put Option Agreement 2’) for 10,000,000 units of warrants in G3 (‘MSB Option Warrants’) with the purchase price of RM 15,000,000.00 (‘MSB Option Price 2’).

The terms and conditions of the ESB Put Option Agreement, the MSB Put Option Agreement and the MSB Put Option Agreement 2 are substantially identical. In this judgment, I will only be referring to the ESB Put Option Agreement. [8]

“Option Warrants” means 5,000,000 units of warrants (7184WA) in G3 Global Berhad [Company No. 200201002733 (570396-D)] and includes so much shares and/or warrants of G3 Global Berhad which is acquired or derived by the Vendor or accrued to the Vendor from any bonus issue, rights issue, conversion, options, warrants or otherwise arising therefrom [Clause 1.1 of the Put Option Agreement]; 4

“Option Price” means the purchase price payable by the Purchaser to the Vendor for the purchase of the Option Warrants at the total price of RM 7,500,000.00 (RM 1.50 per each Option Warrant) for all the Option Warrants and the total price payable for the Option Warrants shall be adjusted accordingly if Vendor exercise its Put Option to sell a portion (and not all) of the Option Warrants [Clause 1.1 of the Put Option Agreement];

“Put Option Consideration” means the sum of Ringgit Malaysia Ten (RM 10.00) paid by Vendor to the Purchaser in consideration of the Put Option, the receipt and sufficiency of which is acknowledged by Purchaser [Clause 1.1 of the Put Option Agreement];

“Put Option Period” means the period of thirty (30) days calculated from the date immediately after the expiry of a six

months period from the date of this Agreement [Clause 1.1 of the Put Option Agreement];

In consideration of the Put Option Consideration, the receipt and sufficiency of which is hereby acknowledged by Purchaser, Purchaser hereby unconditionally and irrevocably grants to the Vendor an option to sell the Option Warrants to Purchaser, subject to the terms and conditions of this Agreement [Clause 2.1(a) of the Put Option Agreement];

Subject to the terms and conditions of this Agreement, at any time during the Put Option Period, the Vendor shall have the right (“Put Option”), but not the obligation, to require the 5 Purchaser to purchase all or a portion of the Option Warrants at the Option Price [Clause 2.1(b) of the Put Option Agreement];

For the avoidance of doubts, if the Vendor has converted any or all of 5,000,000 units of warrants in G3 Global Berhad (7184WA) into the ordinary shares of G3 Global Berhad prior to exercising its Put Option under this Agreement, the Option Warrants shall include all such ordinary shares of G3 Global Berhad which is acquired or derived by the Vendor or accrued to the Vendor pursuant to or in connection with such conversion and/or any other corporate exercise undertaken by G3 Global Berhad including but not limited to any bonus issue, rights issue or otherwise arising therefrom [Clause 2.1(c) of the Put Option Agreement];

“Exercise Notice” means the written notice given by the Vendor to the Purchaser exercising the Put Option at any time during the Put Option Period [Clause 1.1 of the Put Option Agreement];

If the Vendor desires to sell any or all of the Option Warrants in one or different tranches pursuant to Clause 2.2, the Vendor shall deliver to Purchaser the Exercise Notice exercising the Put Option and specifying the number of Option Warrants to be sold (“Put Warrants”) by the Vendor [Clause 2.2(a) of the Put Option Agreement];

Upon the Vendor exercising the Put Option, the completion of the sale and purchase of the Put Warrants, shall take place 6 within ten (10) business days from the date of receipt by the Purchaser of the Exercise Notice:

Completion of the sale of the Put Warrants shall be effected by direct business transaction (“DBT”) through licensed stockbrokers engaged by the Vendor (acting on behalf of Vendor) and the Purchaser (acting on behalf of the Purchaser) respectively or licensed stockbrokers jointly engaged by the Vendor and the Purchaser acting for and on behalf of both the Vendor and the Purchaser, as the case may be (collectively, the Licensed Stockbrokers) or such other more efficient method or transaction as advised by the Licensed Stockbrokers in accordance with the Rules.

Completion is deemed to have occurred when:

the Vendor and Purchaser have given their respective irrevocable instructions to the respective Licensed Stockbrokers to transfer and transact the Put Warrants in accordance with the terms of this Agreement and the Rules; and

(ii) the Purchaser has remitted the Purchase Price to the Vendor, or to its Licensed Stockbroker to the account of the Vendor, in accordance with the Rules. 7

The parties shall procure their respective Licensed Stockbrokers to comply with and observe all requirements of the Rules.

The Put Warrants shall be transferred and title thereto shall pass to the Purchaser in accordance with the

The Parties shall execute and do all such acts, things and documents and/or cause or procure the execution and performance of all such acts, things and documents as may be required to effectively vest and perfect the right, title and interest of the Purchaser or its nominee in and the Put Warrants (as the case may be) [Clause 3.2 of the Put Option Agreement];

This Agreement contains the entire agreement between the parties in respect of this subject matter and any previous understanding, agreement, representation or warranty relating to the said subject matter shall be replaced by this Agreement and has no further effect [Clause 6.5 of the Put Option Agreement];

No amendment, variation, revocation, cancellation, substitution or waiver of, or addition or supplement to, of any of the provisions of this Agreement shall be effective unless it is reduced in writing and signed by the Parties [Clause 6.7 of the Put Option Agreement]. 8 [9] Based on the above, the Plaintiff has vide the “Exercise Notice” dated 26.7.2021 in relation to the “Put Option Agreement Dated 25 January 2021” (“the Exercise Notice”) issued and served on the Defendant to inter alia request the Defendant to purchase all 5,000,000 units of the ESB Option Warrants with the total purchase price of RM 7,500,000.00 being the ESB Option Price. [10] On about 28.7.2021, the Defendant vide his letter dated 28.7.2021 to the Plaintiff enquired and or sought confirmation and or clarification on the following:

Whether the 5,000,000 units of the ESB Option Warrants in G3 had been converted into the ordinary shares of G3 and with the bonus issue, whether there are now 20 million units of ordinary shares of G3;

(ii) Whether the Put Warrants currently are 20 million units of ordinary shares of G3 with total purchase price of RM 7,500,000.00;

(iii) Whether the Plaintiff, ESB would agree to extend the completion date of the sale and purchase of the Put Warrants to 90 days from the date of the said letter. [11] ESB then vide letter dated 29.7.2021 wrote to reply inter alia as follows:

confirmed that the Option Warrants (i.e. 5,000,000 units of warrants in G3) have been converted into ordinary shares of 9 G3 and with the bonus issue undertaken by G3 and that the Option Warrants constitute 20,000,000 ordinary shares of G3;

(ii) confirmed that the Exercise Notice dated 26.7.2021 issued by ESB to the Defendant required the Defendant to purchase all the Option Warrants [which, for the avoidance of doubt, shall be the 20,000,000 ordinary shares of G3 Global Berhad (“the Put Warrants”)] at the total purchase price of RM 7,500,000.00 only;

(iii) disagreed with any extension of time for the completion of the sale and purchase of the Put Warrants;

(iv) stated that the completion of the sale and purchase of the Put Warrants was on or before 9/8/2021, i.e. 10 business days from the date of receipt of the Exercise Notice dated 26.7.2021 by the Defendant; and

stated that time wherever mentioned in the Put Option Agreement shall be of the essence. [12] Notwithstanding the Exercise Notice, the Defendant failed to comply with the same. By reason of the aforesaid, the Defendant has breached the terms of the ESB Put Option Agreement and/or failed, refused and/or neglected to comply with the terms of the ESB Put Option Agreement and/or perform the Defendant’s obligations under the ESB Put Option Agreement. [13] ESB then vide its solicitors’ letter dated 11.8.2021 to inter alia demand the Defendant to perform the ESB Put Option Agreement, 10 to complete the sale and purchase of the Put Warrants in accordance with the terms and conditions of the ESB Put Option Agreement and to pay RM 7,500,000.00 to ESB as the Option Price and/or the Purchase Price of the Put Warrants. [14] Although the said letters of demand and/or reminders have been issued to the Defendant, the Defendant still failed, refused and/or neglected to perform the ESB Put Option Agreement and/or complete the sale and purchase of the Put Warrants and/or pay the Purchase Price to ESB todate. [15] Therefore, ESB claimed inter alia for specific performance of the ESB Put Option Agreement and that the Defendant owed the Option Price and or the Purchase Price in the sum of RM 7,500,000.00 as at 9.8.2021. [16] Similar events apply in relation to the MSB Put Option Agreement and MSB Put Option Agreement 2. The triable issues [17] The Defendant raised 3 triable issues: a) the ESB Put Option Agreement between the Plaintiff and the Defendant is a sham agreement; b) the loan between the Plaintiff and the Defendant constitutes an illegal money lending transaction; and 11 c) the Plaintiff breached the terms of the ESB Put Option Agreement. Sham and illegal transaction [18] The issues relating to sham transaction and illegal moneylending transaction shall be taken together. [19] The Defendant claimed that he had taken a loan of RM 20,000,000.00 from one Datuk Yip Yee Foo (‘Datuk Yip’). According to the Defendant, the warrants under the ESB Put Option Agreement were in truth ‘collaterals’ in the form of securities traded on Bursa Malaysia required by Datuk Yip for his loan. The Defendant claimed that the loan was given by Datuk Yip through his two (2) nominee companies, namely ESB and MSB which purportedly possessed the requisite moneylending license to provide the loan and to charge interest. [20] The Defendant further claimed that the ESB Put Option Agreement is merely a ‘mechanism’ to pay back the purported loan with interests and hence, it is an illegal moneylending transaction. [21] With respect, the Defendant’s claim is devoid of any merits at all. [22] The Defendant has not adduced any evidence that he had received the sum of RM 20,000,000.00 which he claimed were loan to him by Datuk Yip. 12 [23] The Defendant’s averment that he had received the monies in the sum of RM 20,000,000.00 from the sale of the collateral from Lim Boon Hong and Odyssey is also not borne out by any documents. [24] Further, the Defendant never raised any purported “loan” and or purported arrangement as alleged in any of the Defendant’s letter to the Plaintiff. In fact, the Defendant never replied to the letter of demand and or reminder sent by the Plaintiff’s solicitors to the Defendant. [25] On the contrary, the Defendant had specifically sought confirmation that the warrants had been converted into G3 shares and even requested for extension of time for payment when the Exercise Notice was received by him. [26] On the contrary, the Put Option Agreement contains the ‘Entire Agreement’ Clause which stipulates as follows: Clause 6.5 of the Put Option Agreement “This Agreement contains the entire agreement between the parties in respect of this subject matter and any previous understanding, agreement, representation or warranty relating to the said subject matter shall be replaced by this Agreement and has no further effect.” Clause 6.7 of the Put Option Agreement “No amendment, variation, revocation, cancellation, substitution or waiver of, or addition or supplement to, of any of the provisions of this Agreement shall be effective unless it is reduced in writing and signed by the Parties.” 13 [27] Accordingly, this Court will have to examine the obligations between the Plaintiff and the Defendant based on the terms and conditions of the ESB Put Option Agreement only. [28] The transactions entered into between the Plaintiff and the Defendant, if indeed it was for the purpose of the Defendant raising funds to be secured by the warrants, was in effect a sale of the securities by the Defendant with a put option given to the Plaintiff for the Defendant to buy back the securities based on the agreed purchase price – a sale with a put option. [29] To my mind, there is nothing illegal about the ESB Put Option Agreement. Neither can it be said the ESB Put Option Agreement is a sham transaction. The claim that the transaction is an illegal moneylending transaction is obviously an ‘afterthought’. Breach of ESB Put Option Agreement [30] The Defendant also sought to raise a further triable issue that the warrants had been converted into ordinary shares of G3 without the knowledge and or consent of the Defendant. [31] More specifically, the Defendant submitted that ESB breached the terms of the ESB Put Option Agreement as it had converted the warrants into ordinary shares of G3 without the knowledge and consent of the Defendant. [32] Again, with respect to learned counsel for the Defendant, this is also devoid of any merits. 14 [33] At all the material times, ESB was not under any obligations under the ESB Put Option Agreement to notify and or get the consent from the Defendant to convert any warrants in G3 into the ordinary shares in G3. [34] Based on the ESB Put Option Agreement:

“Option Warrants” means 5,000,000 units of warrants (7184WA) in G3 Global Berhad [Company No. 200201002733 (570396-D)] and includes so much shares and/or warrants of G3 Global Berhad which is acquired or derived by the Vendor or accrued to the Vendor from any bonus issue, rights issue, conversion, options, warrants or otherwise arising therefrom [Clause 1.1 of the Put Option Agreement];

(ii) For the avoidance of doubts, if the Vendor has converted any or all of 5,000,000 units of warrants in G3 Global Berhad (7184WA) into the ordinary shares of G3 Global Berhad prior to exercising its Put Option under this Agreement, the Option Warrants shall include all such ordinary shares of G3 Global Berhad which is acquired or derived by the Vendor or accrued to the Vendor pursuant to or in connection with such conversion and/or any other corporate exercise undertaken by G3 Global Berhad including but not limited to any bonus issue, rights issue or otherwise arising therefrom [Clause 2.1(c) of the Put Option Agreement]. [35] Hence, it is clear that the Put Warrants would include ‘… all such ordinary shares of G3 Global Berhad which is acquired or derived 15 by the Vendor or accrued to the Vendor pursuant to or in connection with such conversion and/or any other corporate exercise undertaken by G3 …’. [36] In any case, the Plaintiff had also confirmed on the conversion of warrants into the ordinary shares vide the Plaintiff’s letter dated 29.7.2021 and there were never any issues raised by the Defendant in relation to the same. Conclusion [37] In the premises, I hold that the Defendant has no bona fide defence to the Plaintiff’s claim and there is no issue that warrants a trial. [38] Accordingly, I allowed both the Plaintiffs’ respective Enclosures 5 in Suit 378 and Suit 379 with costs. Dated the 4th day of Januari 2022 ONG CHEE KWAN Judicial Commissioner High Court of Kuala Lumpur, NCC2 16 Counsel:

Mr. Ng Li Kian for Plaintiff Messrs. Ng, Gan & Partners (Kuala Lumpur)

Mr. Terrence Lee Rohui with Ms. Audrey Hoh for Defendant