Kenanga Investors Berhad v 1. ) Grand Deal Vision Sdn Bhd (WA-22NCC-664-09/2023)

GRAND DEAL VISION SDN BHD [No. Pendaftaran: 201701010503 (1224668-M)]

MUSTAKIM BIN MAT NUN (No. K/P: 730425-07-5791)

SARAH AZREEN BINTI ABDUL SAMAT (NO. K/P: 750320-14-5026) … DEFENDANTS GROUNDS OF JUDGMENT A. Introduction [1] The plaintiff filed an application for summary judgment against the defendants (“Summary Judgment Application”). [2] The court allowed the application, for the reasons explained below. B. Background Facts The Option Agreement [3] By a put and call option agreement dated 8 September 2021 and a term sheet dated 14 September 2021 executed between the plaintiff and the 1st defendant (collectively, the “Option Agreement”), the plaintiff and the 1st defendant agreed on the following: a. The 1st defendant granted to the plaintiff a put option for the plaintiff to sell ordinary shares of Reneuco Berhad (formerly known as KPower Berhad) worth up to RM67,800,000 (“Option Shares”) to the 1st defendant (“Put Option”); b. The plaintiff granted to the 1st defendant a call option, for the 1st defendant to buy back the Option Shares from the plaintiff (“Call Option”); and c. The Put Option and the Call Option may be exercised within nine months from the transaction date of 28 September 2021 (“Option Expiry Date”), in the following manner: i. Six months from the transaction date of 28 September 2021 (“Call Option 1”); or ii. Three months from the expiry of Call Option 1 (“Call Option 2”). [4] The Option Agreement is secured by a personal guarantee dated 8 September 2021, executed by the 2nd and 3rd defendants in favour of the plaintiff (“Personal Guarantee”). In the Personal Guarantee, the 2nd and 3rd defendants agreed to irrevocably and unconditionally guarantee the performance by the 1st defendant of its obligations under the Option Agreement, and to pay all monies due and payable by the 1st defendant to the plaintiff. The Extension and Rollover Terms [5] By a letter dated 14 June 2022, the 1st defendant requested for an extension and rollover of the period to exercise the Put Option and the Call Option, by 12 months from the Option Expiry Date. The request was made subject to the following undertakings by the 1st defendant: a. To pay the plaintiff a premium in the sum of RM7,218,836 on or before 28 June 2022; b. To execute a supplemental option agreement or such documents as may be required by the plaintiff; c. In the event the price of the Option Shares falls below 75% of the total Put Option value (i.e. RM70,772,903), to pay the shortfall to the plaintiff within six months from the Option Expiry Date, either by cash injection or by pledging additional shares as collateral; and d. To indemnify the plaintiff for any costs, expenses and losses suffered by the plaintiff as a result of the plaintiff exercising its right to dispose of the Option Shares (collectively, the “Extension and Rollover Terms”). [6] The plaintiff agreed to the Extension and Rollover Terms, and consequently, a supplemental option agreement dated 20 June 2022 (“Supplemental Option Agreement”) was executed by the plaintiff and the 1st defendant. The salient terms of the Supplemental Option Agreement are as follows: a. The period to exercise the Call Option is extended by: i. Nine months from the Option Expiry Date, with the price of the Option Shares set at 12% above the transaction price of RM0.68 per share if the option is exercised within nine months from the Option Expiry Date, or any other price between 12% to 12.5% above the transaction price of RM0.68 per share (“Call Option 3”); or ii. Three months from the expiry of Call Option 3, with the price of the Option Shares set at 17.65% above the transaction price of RM0.68 per share if the option is exercised within a period of three months from the expiry of Call Option 3, or any other price between 17.65% to 18.15% above the transaction price of RM0.68 per share (“Call Option 4”); and b. The period to exercise the Put Option is extended to 21 months, from 29 September 2021. [7] The 1st defendant did not comply with the Extension and Rollover Terms. The plaintiff gave notice to the 1st defendant by a letter dated 27 September 2022 that: a. The plaintiff had agreed to and executed the Supplemental Option Agreement pursuant to the 1st defendant’s undertakings under the Extension and Rollover Terms, to pay the plaintiff a premium in the sum of RM7,218,836 on or before 28 June 2022; b. Following the undertaking, a cheque dated 14 June 2022 in the sum of RM7,218,836 was issued to the plaintiff, but the plaintiff was informed that the 1st defendant was unable to honour the cheque, for reasons unknown to the plaintiff; c. As such, the premium in the sum of RM7,218,836 remains due and payable (“Outstanding Premium”), and an additional late payment interest on the Outstanding Premium computed at the rate of 2% per month from 28 June 2022 to 26 September 2022 in the sum of RM433,130 (“Late Payment Interest”) has been imposed by the plaintiff; d. There is a shortfall in relation to the security coverage of the equity wrapper in the sum of RM48,000,000 based on the market price of RM0.255 as at 27 September 2022 against the Put Option price of RM0.80 for 88,466,129 of the Option Shares (“Security Coverage Shortfall”); e. The plaintiff does not agree to the 1st defendant’s request for waiver of the administration fee in the sum of RM3,369,000 (“Administration Fee”). The plaintiff requested the 1st defendant to remit the payment of the Administration Fee to the plaintiff; and f. The plaintiff requested the 1st defendant to settle the Outstanding Premium, the Late Payment Interest, the Administration Fee and the Security Coverage Shortfall by 14 October 2022. [8] The 1st defendant responded by a letter dated 12 October 2022, informing the plaintiff that the 1st defendant has initiated steps to address its obligations to the plaintiff. The 1st defendant requested the plaintiff for an extension of time until January 2023, for the 1st defendant to address the matter. [9] In response, the plaintiff issued a letter dated 3 November 2022, informing the 1st defendant that the plaintiff is unable to accede to the 1st defendant’s request for an extension of time until January 2023 to resolve the matter, and demanding that the 1st defendant settles the Outstanding Premium, the Late Payment Interest, the Administration Fee and the Security Coverage Shortfall by 15 November 2022. [10] The 1st defendant failed to settle the payments as demanded by the plaintiff, and the plaintiff, through its solicitors, issued a letter of demand dated 17 November 2022, seeking these payments from the 1st defendant. [11] A meeting was held on 8 December 2022 (“December 2022 Meeting”) between representatives of the plaintiff and the 1st defendant. During the December 2022 Meeting, it was agreed that: a. The 1st defendant will pay the Outstanding Premium to the plaintiff by 23 December 2022; b. The 1st defendant will pay the Late Payment Interest and the Administration Fee to the plaintiff by 28 February 2023; and c. The timeline to remedy the Security Coverage Shortfall will be resolved at a later date to be decided by the parties. [12] The 1st defendant failed to pay the Outstanding Premium in full by 23 December 2022. Instead, the 1st defendant made partial payment towards the Outstanding Premium on 30 December 2022, leaving a balance of RM4,589,336 (“Balance Outstanding Premium”). The Late Payment Interest and the Administration Fee were not paid. The plaintiff’s exercise of the Put Option [13] Call Option 4 expired on 27 June 2023. The 1st defendant did not exercise the Call Option pursuant to the Option Agreement, read with the Supplemental Option Agreement (“Agreements”). [14] By notice dated 12 June 2023 (“Put Option Notice”), the plaintiff exercised the Put Option in accordance with the terms of the Agreements. The plaintiff claimed that with the exercise of the Put Option, the 1st defendant is obligated to purchase all the Option Shares by 27 June 2023 at the Put Option value of RM70,774,672.52 (“Put Option Value”). [15] The 1st defendant did not purchase the Option Shares at the Put Option Value. The plaintiff’s demand and the commencement of this action [16] Following the 1st defendant’s failure to pay the Balance Outstanding Premium, the Late Payment Interest, the Administration Fee and the Security Coverage Shortfall, and to purchase the Option Shares at the Put Option Value, the plaintiff through its solicitors, issued a letter of demand dated 7 August 2023 to the defendants, demanding that the defendants: a. Pay the plaintiff RM4,589,336, being the Balance Outstanding Premium; b. Pay the plaintiff RM433,130, being the Late Payment Interest; c. Pay the plaintiff RM3,369,000, being the Administration Fee; and d. Purchase the Option Shares at the Put Option Value of RM70,774,672.52 in accordance with the Agreements, or alternatively pay the plaintiff the sum of RM70,774,672.52 as damages as a result of the 1st defendant’s breach of the Agreements. [17] The defendants did not comply with the demands set out in the letter of demand, and the plaintiff filed this action against the defendants. In the course of these proceedings, the plaintiff filed the Summary Judgment Application, seeking to obtain summary judgment against the defendants for sums due to the plaintiff. C. Principles of Summary Judgment [18] The Summary Judgment Application was filed under order 14 rule 1 and/or order 81 rule 1 of the Rules of Court 2012 (“ROC”). [19] Order 14 rule 1 of the ROC provides that: “(1) Where in an action to which this rule applies a statement of claim has been served on a defendant and that defendant has entered an appearance in the action, the plaintiff may, on the ground that the defendant has no defence to a claim included in the writ, or to a particular part of such a claim, or has no defence to such a claim or part thereof except as to the amount of any damages claimed, apply to the Court for judgment against that defendant.” (emphasis added) [20] Order 81 of the ROC applies to summary judgment in actions for specific performance. Order 81 rule 1 provides that: “(1) In an action begun by writ endorsed with a claim –

for specific performance of an agreement (whether in writing or not) for the sale, purchase or exchange of any property, or for the grant or assignment of a lease of any property, with or without an alternative claim for damages; … the plaintiff may, on the ground that the defendant has no defence to the action, apply to the Court for judgment.” (emphasis added) [21] The manner in which an application for summary judgment shall be made is set out in order 14 rule 2 and order 81 rule 2 of the ROC. Both provisions require the application to be made by way of a notice of application supported by an affidavit which verifies the facts upon which the claim is based, and which states that in the deponent’s belief, there is no defence to that claim. [22] In National Company for Foreign Trade v Kayu Raya Sdn Bhd [1984] 2 MLJ 300, the Federal Court held that once the preliminary requirements to proceed under order 14 rules 1 and 2 of the (then) Rules of the High Court 1980 have been satisfied, in that: a. The statement of claim has been served on the defendant; b. The defendant has entered appearance; and c. The affidavit in support of the summary judgment application has verified the facts upon which the claim is based, and has stated that there is no defence to the claim, the plaintiff would have established a prima facie case against the defendant. The burden then shifts to the defendant to satisfy the court as to why judgment should not be given against it. [23] The same preliminary requirements are set out in order 14 rules 1 and 2 of the ROC. Under order 81 rule 1(2) of the ROC, an application for summary judgment may be made against the defendant, whether or not he has entered appearance. D. The Plaintiff’s Case [24] In the present case, it is not in dispute that the writ of summons and statement of claim have been served on the defendants, and the defendants have entered appearance in this action. In the affidavit in support of the Summary Judgment Application, the plaintiff had also verified the facts upon which the claim is based, and had stated that there is no defence to the claim. [25] The plaintiff based its claim on the terms of the Agreements. It is beyond dispute that the Agreements are valid and binding on the parties, as both parties had the power and capacity to execute the Agreements and to perform the terms of the Agreements. In clause 6.1.2 of the Option Agreement, the 1st defendant represented, warranted and undertook that the agreement constitutes the legal, valid and binding obligations of the 1st defendant. Clause 3.01 of the Supplemental Option Agreement states that the Option Agreement and the Supplemental Option Agreement shall be read as a single integrated document, making both Agreements valid and binding on the parties. [26] The plaintiff claimed that the defendants had breached the Agreements, by failing to: a. Pay the Balance Outstanding Premium amounting to RM4,589,336; b. Pay the Late Payment Interest, amounting to RM433,130; c. Pay the Administration Fee, amounting to RM3,369,000; and d. Purchase the Option Shares at the Put Option Value of RM70,774,672.52. [27] Based on the facts as set out, I find that the plaintiff has established a prima facie case against the defendants. The burden has shifted to the defendants to satisfy the court as to why judgment should not be given against them in a summary manner. E. Issues Raised By The Defendants Issues [28] There are three main issues raised by the defendants, which they claim necessitate a full trial of this action: a. The Put Option Notice was not validly issued, and as such, the plaintiff’s claim against the defendants is premature; b. The 2nd and 3rd defendants have been discharged from their obligations as guarantors, in view of the material variance to the terms of the Option Agreement; and c. The letter of demand was not properly served on the 2nd and 3rd defendants. Issue 1: Was the Put Option Notice validly issued? [29] The main issue raised by the defendants is that the Put Option Notice, issued by the plaintiff on 12 June 2023, was not valid, as it does not conform with the form of the notice on the exercise of the Put Option, as set out in Annexure 1 of the Option Agreement (“Put Option Notice Form”). [30] In my assessment of this argument, I first considered the process for the issuance of a notice on the exercise of the Put Option, which is set out in clause 2.2 of the Option Agreement. Clause 2.2 provides that: “… the Put Option shall be exercisable by KIB serving on GDV notice in writing at least ten (10) Business Days prior to the expiry of the Put Option Period requiring GDV to purchase all or part of the Option Shares in one or multiple tranches by the end Put Option Period (hereinafter called "the Put Exercise Notice").” [31] Annexure 1 of the Option Agreement contains the Put Option Notice Form, which provides the wordings of the notice to be as follows: “Put & Call Option Agreement dated [date] between Kenanga

We refer to the above Put & Call Option Agreement made between us, in particular Clause 2.1 of the Put & Call Option Agreement. Terms defined in the Put & Call Option Agreement shall have the same meanings herein.

We hereby give you notice pursuant to Clause 2.2 of the Put & Call Option Agreement that we are exercising the Put Option to require you to irrevocably: purchase for [insert number of shares] Option Share for the Total Share Price of [insert total value] in accordance with the terms of the Put & Call Option Agreement.

The completion of the sale and purchase of the Option Shares shall be in one or multiple tranches, in accordance with the provisions of the Put & Call Option Agreement.” [32] I then noted that the Put Option Notice issued by the plaintiff to the 1st defendant states as follows: “2. Please take note that pursuant to Section 2.3 of the Agreement, the Put Option Exercise Date for the RENEUCO Equity Wrapper would be on the date of maturity, 27 June 2023. The Put Option value is

3.

if by delivery, in person, when delivered to the addressee;

(ii) if by post, THREE (3) Business Days from and including the date of postage;

(iii) if by facsimile transmission, when received by the addressee …” [47] The defendants argued that the 2nd and 3rd defendants’ signatures on the “Acknowledgment Receipt” cards issued by POS Malaysia (“AR Cards”) are not consistent with their signatures in the Personal Guarantee. However, I note that both AR Cards contain the names of the recipients, handwritten as “Mustakim” (the 2nd defendant) and “Sarah” (the 3rd defendant). The 2nd and 3rd defendants denied that they received the letter of demand, but they failed to provide any evidence to prove that they were not the persons who received the letter or who wrote their names on the AR Cards. As such, the defendants’ allegation that the letter of demand was not properly served remains a bare denial. [48] It should also be highlighted that the letter of demand had also been copied to the defendants’ solicitors, in line with clause 10 of the Option Agreement. [49] Thus, from the totality of the evidence before this court, I find that the defendants have failed to raise any triable issue on the sufficiency of the service of the letter of demand on the 2nd and 3rd defendants. I am of the view that the letter of demand has been properly served. F. Acknowledgements And Admissions By The Defendants [50] The court has also taken note that by their conduct, the defendants had acknowledged and admitted their liability to the plaintiff. [51] In the letter dated 14 June 2022, the 1st defendant had sought approval from the plaintiff to allow the 1st defendant to extend and rollover the period to exercise the Put Option and the Call Option by 12 months from the Option Expiry Date. The request was made subject to the Extension and Rollover Terms, which include the payment of a premium on the Option Shares. These terms were subsequently incorporated into the Supplemental Option Agreement. [52] In the letter dated 12 October 2022, the 1st defendant informed the plaintiff that it had initiated steps to address its obligations to the plaintiff. The 1st defendant stated that it had always been their intention to make good the Agreements. [53] In the December 2022 Meeting, the 1st defendant agreed to pay to the plaintiff the Outstanding Premium amounting to RM7,218,836, by 23 December 2022. The 1st defendant failed to pay the Outstanding Premium in full by 23 December 2022, but made partial payment towards the Outstanding Premium on 30 December 2022. This left the Balance Outstanding Premium of RM4,589,336 still due and owing to the plaintiff. [54] In HSBC Bank Malaysian Bhd (formerly known as Hong Kong Bank Malaysia Bhd) v LH Timber Products Sdn Bhd (formerly known as Ho Lim Sawmill Sdn Bhd) [2005] 6 MLJ 625, the High Court held that in view of the defendants’ admission of their debt to the plaintiff, there is no dispute as to the fact of the debt. As such, summary judgment was granted against the defendants. [55] In the present case, I find the issuance of the letters and the steps taken by the 1st defendant to pay the Outstanding Premium, as reflected above, constitute acknowledgments and admissions of amounts due by the defendants to the plaintiff, and the 1st defendant’s breach of the Agreements. [56] As the defendants’ liability has been admitted, I am of the considered view that there is no issue that would necessitate this case being determined by way of a full trial. G. Decision [57] From my assessment of the evidence before this court, I find the defendants have not raised any credible defence or triable issue. This is therefore a plain and obvious case justifying the grant of summary judgment against the defendants. [58] As such, the Summary Judgment Application is allowed, with costs. Dated 29 August 2025 ADLIN ABDUL MAJID Judge High Court of Malaya Kuala Lumpur Counsel: Plaintiff : Shaikh Abdul Saleem Shaikh Abdul Karim (together with Teoh Jo Vi) of Messrs. Shaikh David & Co Defendants : Abdul Rashid Ismail of Messrs. Rashid Zulkifli