Khor Yong Yong (as the Liquidator of Yeesheng Marketing Sdn Bhd (in liquidation) (Company No. 201601019775/1190712-V) ) v 1. ) Yeesheng Marketing Sdn Bhd (in liquidation) (Company No. 201601019775/1190712-V) ) (PA-28PW-20-07/2023)

AND YEESHENG MARKETING SDN. BHD. (In liquidation) (Company No: 201601019775/1190712-V)

LEE CHIN AIK (IC No: 760727085183)

CHUNG YEW VOON (IC No: 741220075759) … RESPONDENTS JUDGMENT (RELEASE THE LIQUIDATOR, DISSOLVE THE COMPANY, DESTROY ALL BOOKS) PRELUSION [1] The liquidator of a wound up company—the 1st Respondent company (in liquidation) (RCo)—applies for the following Orders—

that the calling of a meeting of RCo’s creditors and contributories to consider the liquidator’s resignation be dispensed with;

that the liquidator be released as RCo’s liquidator;

that RCo be dissolved;

that RCo’s books, records and papers be destroyed within three months from the date of this Order. [2] Should these Orders be granted? PERTINENT FACTS RELATING TO THIS APPLICATION [3] RCo was wound up on 25.8.2021. The Applicant was appointed the liquidator. The liquidator took over the conduct of the affairs and management of RCo. [4] As part of the liquidation work to decide if RCo has any assets to distribute to the creditors, the liquidator endeavoured to convene a meeting of RCo’s creditors and contributories on 8.12.2022. But no one showed up at the meeting. [5] Only the 2nd Respondent (R2) lodged a proof of debt. R2 also submitted RCo’s statement of affairs. [6] The liquidator achieved a net realization of assets of approximately RM147K, with a net dividend of approximately RM107K to be paid out. The liquidator paid the net dividend to R2. [7] The liquidator asserts that he has fulfilled his statutory duties as RCo’s liquidator. He asserts that RCo is no longer in need of administration or management. [8] The liquidator had twice advertised in the newspapers and the government gazette to notify the creditors and contributories that he intended to apply to Court to be released as the liquidator. [9] The liquidator suggests that to save time and costs, there is no need to convene a meeting of creditors and contributories just to approve his release as RCo’s liquidator, and to dissolve RCo as a company. THE PERTINENT PROVISIONS OF THE COMPANIES ACT 2016 Section 490 [10] Under section 490 of the Companies Act 2016 (CA 2016), the liquidator can apply to Court and be granted an Order to release him from his duties as RCo’s liquidator and to dissolve RCo. An Order to release the liquidator and to dissolve RCO can be granted if the liquidator has performed his work, which includes realising RCo’s assets, and distributing a final dividend. [11] Here, the liquidator has realised RCo’s assets and had in fact paid out a final dividend to R2—the only creditor who lodged a proof of debt. Rule 149 [12] Rule 149 of the Companies (Winding Up Rules) 1972 (Rules) provides that before he applies for his release, the liquidator is to give Notice of his intention to apply for release to the creditors who have proved their debts, and to the contributories. Together with this notice, the liquidator should also give a Summary of all the receipts and payments in the winding up process. [13] The liquidator asserts that he has given to the creditor and contributories this notice and the accompanying summary. He exhibited the notice and the summary in his affidavit in support of this Application. [14] Rule 149 is set out below for reference— Rule 149. Notice of liquidator's intention to apply for release. A liquidator before making application for his release in Form 76 shall give notice of his intention so to do in Form 75 to all the creditors who have proved their debts and to all the contributories and shall send with the notice a summary of all receipts and payments in the winding-up in Form 77. Rule 150 [15] Rule 150 of the Rules provides that there are three ways in which the liquidator can resign as liquidator—

summoning separate meetings of the creditors and the contributories, to decide if they accept the liquidator’s resignation;

if the creditors and the contributories agree to accept the liquidator’s resignation, the liquidator is to lodge his resignation memorandum with the Registrar (the Chief Executive Officer of the Companies Commission Of Malaysia), and with the Official Receiver, as well as with the Registrar Of Companies. And his resignation will then become effective;

“in any other case” i.e. if it is not by (1) or (2) above, the liquidator can apply to Court for the Court to decide if his resignation should be accepted. If the Court accepts the liquidator’s resignation, the Court can make the necessary Order. [16] It is pertinent to note that Subrule 150(5) provides that the Court “may dispense with all or any of the requirements” in Rule 149 and Rule 150. [17] Rule 150 is set out below for reference— Rule 150. Meeting of creditors and contributories to consider resignation of liquidator.

A liquidator who desires to resign his office shall summon separate meetings of the creditors and contributories of the company to decide whether or not the resignation shall be accepted.

If the creditors and contributories by ordinary resolutions agree to accept the resignation of the liquidator he shall file with the Registrar, the Official Receiver and the Registrar of Companies a memorandum of his resignation and the resignation shall thereupon take effect.

In any other case the liquidator shall report to the Court the result of the meetings and thereupon the Court may, upon the application of the liquidator, determine whether or not his resignation shall be accepted and may give such directions and make such orders as in its opinion shall be necessary.

On the Court pronouncing a determination that a resignation shall be accepted the liquidator shall forthwith file a notice thereof with the Official Receiver and the Registrar of Companies.

The Court may dispense with all or any of the requirements of this and the last preceding rule. [emphasis mine] [18] Since—

the liquidator has realised RCo’s assets and distributed the final dividend to the sole creditor: R2, and the liquidator is applying for an Order to release him from his duties as RCo’s liquidator (under section 490 of the CA); and

the liquidator has given the required notice to the creditors and contributories about his intention to apply for release, as well as the required summary of the receipts and payments in the liquidation process (under Rule 149 of the Rules); and

the liquidator is applying to Court to accept his resignation (under Rule 150 of the Rules), I find that it is fair and just to the liquidator and to the sole creditor: R2, that this Court accepts the liquidator’s resignation and releases him from his duties as liquidator. [19] Appropriately, I also find that it is just to dissolve RCo. Section 518 [20] Section 518 provides that when a company is wound up, and later dissolved, all the “books and papers” of the company must be kept for five years after the date the company was dissolved. In other words, the books and papers of a wound up and later dissolved company must be kept for five years before they can be destroyed. [21] However, the books and papers of the company can be destroyed “within” five years i.e. in less than five years, if the winding up Court so directs. [22] The pertinent portions of section 518 are set out below— Section 518. Books and papers of company

Where a company is being wound up, all books and papers of the company and of the liquidator that are relevant to the affairs of the company at or subsequent to the commencement of the winding up of the company shall be prima facie evidence of the truth of all matters recorded in the books or papers in respect of the contributories and the company.

When a company has been wound up, the liquidator shall retain the books and papers referred to in subsection (1) for a period of five years from the date of the dissolution of the company and at the expiration of that period, may destroy the books and papers.

Notwithstanding subsection (2), when a company has been wound up, the books and papers referred to in subsection (1) may be destroyed within a period of five years after the dissolution of the company—

in the case of a winding up by the Court, in accordance with the directions of the Court;

in the case of a members’ voluntary winding up, as the company by resolution directs; and

in the case of a creditors’ voluntary winding up, as the committee of inspection, or, if there is no such committee, as the creditors of the company direct… Rule 152 [23] Rule 152, in a similar fashion, provides that when a liquidator resigns or seeks to be released, the wound up company’s “books, papers, documents and accounts” can be destroyed “or otherwise disposed of”. [24] Rule 152 is set out below— Rule 152. Proceedings on resignation, etc. of liquidator.

Upon a liquidator resigning or being released or removed from his office, he shall deliver over to the Official Receiver or the new liquidator, as the case may be, all books kept by him and all other books, documents, papers, and accounts in his possession relating to the office of liquidator, and the release of a liquidator shall not take effect unless and until he has delivered over to the Official Receiver or the new liquidator, as the case may be, all the books, documents, papers and accounts aforesaid.

The Court may, at any time during the progress of the liquidation, on the application of the liquidator or the Official Receiver, direct that such of the books, papers, and documents of the company or of the liquidator as are no longer required for the purpose of the liquidation, may be sold, destroyed or otherwise disposed of. [emphasis mine] [25] Since—

RCo is wound up; and

the liquidator has completed his task to distribute RCo’s assets by paying out to R2 the final dividend; and

the liquidator resigns his position and seeks an Order of the winding up Court to release him from his duties as liquidator; and

the liquidator asks for the Court’s directions to destroy RCo’s books and papers; and

the books and papers are no longer needed for the liquidator for the liquidation process, I find that it is also appropriate and just to direct that RCo’s books and papers be destroyed relatively immediately (without waiting for the expiry of five years after RCo is dissolved). CONCLUSION [26] For all the above reasons, I grant an Order in the terms that the liquidator applies for, namely—

that the calling of a meeting of RCo’s creditors and contributories to consider the liquidator’s resignation be dispensed with;

that the liquidator be released as RCo’s liquidator;

that RCo be dissolved;

that RCo’s books, records and papers be destroyed within three months from the date of this Order. Dated: 14 December 2023 signed KENNETH ST JAMES Judicial Commissioner Penang High Court Counsel/Solicitors For the Applicant Loke See Yee [Messrs. J. Tan & C.H. Lim (Pulau Pinang)] Legislation referred to:

Section 490 and 518 of the Companies Act 2016.

Rule 149, Rule 150 and Rule 152 of the Companies (Winding Up Rules) 1972. Cases referred to: -