Maju Holdings Sdn Bhd v Bridgex Sdn Bhd (WA-28JM-18-05/2024)

BRIDGEX SDN BHD (Company Registration No.: 199301006096/260833-A)

ANTAH SCHINDLER SDN. BHD. (Company No.: 3837-H) In the matter of Sections 404 and 405 of the Companies Act 2016; And In the matter of Rule 8 of the Companies (Corporate Rescue Mechanism) Rules 2018; And In the matter of Maju Holdings

ZAFAS SDN BHD (Company No.: 332559-X)

MAYBANK ISLAMIC BERHAD [Registration No.: 200701029411(787435-M)] …RESPONDENTS

These Grounds concern a Notice of Appeal (Encl 153) filed by the Applicant (“Maju Holdings”) against my decision to dismiss Encl 1 with costs of RM20,000.00. Encl 1 is an application for the appointment of a judicial manager (“JM”) under ss. 404 and 405 of the Companies Act 2016 (“CA 2016”). The First Respondent (“R1”) filed Encl 7 which by prayers C and D, are to strike out Encl 1 and for an order that any further applications in Encl 1 shall be filed on an inter partes basis.

Maju Holdings submits that the Revised Debt Settlement Proposal (“Revised Proposal”) (Ex A-1, pp 29 to 80, of Encl 134) has a reasonable probability of rehabilitating Maju Holdings or preserving all or part of its business as a going concern and/or ensuring that the interests of its creditors are better served than that in the winding up.

All references herein to sections are with reference to sections of CA 2016. The contents of these Grounds are set out in the table below. Contents Para No INTRODUCTION 4-5 BRIEF BACKGROUND FACTS 6-14 Encl 1 & the Appointment of the JM 15-23 The Revised Proposal & s. 405(1)(b)(i) 24-29 The Burden 30-36 THE FIRST CONDITION – MAJU HOLDINGS IS INSOLVENT - S. 405(1)(A) 37-38 THE SECOND CONDITION – SURVIVAL AS A GOING CONCERN - S. 405(1)(B)(I) 39-44 The Revised Proposal & Funding 45 The Ulu Tiram Project & Financing 46-55 Repayments from Subsidiaries 56-57 Further Projects 58 CONCLUSION 59-63

The primary issue in Encl 1 is whether Maju Holdings has fulfilled the statutory preconditions in CA 2016 for the appointment of a judicial manager over Maju Holdings in accordance with the Revised Proposal. Maju Holdings says that it has.

The brief background facts are as set out below.

Maju Holdings was established under the Companies Act, 1965 on 6.7.1978 as a private company limited by shares and was previously known as Pembangunan Swasta Sdn Bhd. The total issued share capital of Maju Holdings is RM100,000,000.00 with 74,880,000 ordinary shares and 25,120,000 issued otherwise than for cash.

The registered office and business address of Maju Holdings is Level 21, Maju Tower, 1001 Jalan Sultan Ismail, 50250 Kuala Lumpur. In the Revised Proposal, it is stated that its business is investment holding, management consultancy and construction, see para 1.1 of Part A of the Revised Proposal.

Maju Holdings has about 600 employees and more than 50 subsidiaries that are allegedly still active (para 1.2, p 32,

Encl 134). A list of these subsidiaries appears at p 142 of Encl It is unclear whether these employees are employed directly by Maju Holdings or by its subsidiaries.

Historically, other members within the group (who are ultimately owned by Maju Holdings) appear to be in financial trouble: a. the JM Application filed by ASM Properties Sdn Bhd vide Kuala Lumpur High Court Originating Summons No.: WA- 28JM-20-06/2024, was dismissed on 16.4.2025; b. the JM Application filed by MEX II Sdn Bhd vide Shah Alam High Court Originating Summons No.: BA-28JM-28- 12/2021, was dismissed on 26.4.2022; c. the JM Application filed by ASM Development Sdn Bhd vide Kuala Lumpur High Court Originating Summons No.: WA-28JM-37-12/2023, was dismissed on 30.9.2024.

Maju Holdings itself is certainly in financial distress with debts of a staggering RM1,890,403,023.00 owing to its creditors (including related creditors), see part B, para 1.0, pp 36 to 40, Encl 134. It is alleged (see para 2.1, p 32 Encl 134) that Maju Holdings’ current financial predicament was caused by: a. a mismatch of cashflow; and b. the unfulfilled corporate proposals which are still ongoing and incomplete due to the outbreak of Covid-19 in 2020 and 2021.

However, it is alleged that if the debt to related creditors is excluded, the Unrelated Creditors (i.e. Statutory Creditors, Trade Creditors and Other Creditors) is RM169,900,870.00 only.

On 2.5.2024, Maju Holdings was served with a winding up petition by R1. The Petition was fixed for hearing on 24.5.2024. On 16.5.2024, Maju Holdings was served with another winding up petition by the Third Respondent (“R3”).

On 20.5.2024 and some 4 days before the hearing of R1’s Petition, Maju Holdings filed Encl 1 under s. 404 to be placed under judicial management by an order under s. 405.

This filing triggered an automatic moratorium under s. 410.

Maju Holdings claims that the Revised Proposal has a reasonable probability of rehabilitating itself and pursuant to which the interests of its creditors will be better served than in a winding up.

Encl 1 prays for a JM Order to be made under s. 405. In view of my conclusions, I do not find it necessary to consider s. 404, nor to consider the allegations that Encl 1 was an abuse merely to trigger the automatic moratorium.

S. 405(1)(b) provides: “Power of Court to make a judicial management order and appoint a judicial manager

(1) Where a company or its directors, under a resolution of its members or the board of directors, or a creditor, including any contingent or prospective creditor or all or any of those parties, together or separately, makes an application under section 404, the Court may make a judicial management order in relation to the company if-

the Court is satisfied that the company is or will be unable to pay its debts; and

the Court considers that the making of the order would be likely to achieve one or more of the following purposes:

the survival of the company, or the whole or part of its undertaking as a going concern;

(ii) the approval under section 366 of a compromise or arrangement between the company and any such persons as are mentioned in that section;

(iii) a more advantageous realisation of the company's assets would be effected than on a winding up.

Before I deal with s. 405 in detail, various sub-sections of CA 2016 should be excluded from the analysis.

First, I assume that Maju Holdings is not relying on s. 405(1)(b)(ii) as no evidence has been led that there is a scheme of arrangement pending approval under s. 366. As such, s. 405(1)(b)(ii) has no application.

Secondly, I do not accept that the appointment of the JM will be in the ‘public interest’ within s. 405(5)(a). This exception is only applied in exceptional circumstances, see Gigatech Engineering Sdn Bhd v EnGreen Sdn Bhd (formerly known as EG Chemicals & Engineering Sdn Bhd [2023] 5 CLJ 628. As Maju Holdings is a private company, the generic outcomes of a winding-up, such as the potential impact on employees, suppliers and contractors, are insufficient to invoke the public interest exception.

Thirdly, Maju Holdings submits that the JM would also achieve a more advantageous realisation of the company's assets than on a winding up within s. 405(1)(b)(iii), see paras 24 and 29 of Maju Holdings’s Consolidated Submissions. This is not expressly relied on in the Revised Proposal.

I nevertheless find this difficult to accept. The evidence suggests that Maju Holdings is largely an investment holding company. In its Consolidated Submissions at para 75, it is admitted that Maju Holdings has ‘no realisable assets to be liquidated’. It follows that there could not be a more advantageous realisation of assets within s. 405(1)(b)(iii), if there are no realisable assets. This also suggests that the value of its subsidiaries (which I am sure are carried on its balance sheet) cannot be said to be significant.

It is claimed that the Ulu Tiram Project will raise enough funds to repay the creditors. But importantly, this will turn on whether Maju Holdings is able to raise sufficient financing to complete the Ulu Tiram Project, as was the difficulty in Gigatech (supra) and in Pembinaan BY Sdn Bhd v Minda Muhibah Sdn Bhd & Anor [2025] MLJU 4147. This issue will be considered later in these Grounds. The Revised Proposal & s. 405(1)(b)(i)

It appears that the main basis of Encl 1 is s. 405(1)(b)(i). This is consistent with the position taken in the Revised Proposal.

Para 3.1 of the Revised Proposal provides that: “the [Revised Proposal] is necessary to avert the possibility of winding up of [Maju Holdings], resolve [Maju Holdings] creditors’ claims and restore its liquidity position to enable it to continue as a going concern and would achieve the following”, the material objective being: “(i) the survival of [Maju Holdings], or the whole or part of its undertaking as a going concern”.

The main issue is therefore whether I consider that a JM Order, if granted, would ‘likely to achieve’ the survival of the company under s. 405(1)(b)(i).

I only need to ‘consider’ that the JM would be likely to achieve the said survival, which is a lower standard of being ‘satisfied’ in s. 405(1)(a).

In Maju-TH Sdn Bhd (Lembaga Tabung Haji, proposed intervener) [2025] 8 MLJ 875 at paras 69 to 71, I explained the meaning of ‘survival’ as a ‘going concern’ relying on Wong Chee Lin J’s judgment in Leadmont Development Sdn Bhd v Infra Segi Sdn Bhd and another suit [2019] 8 MLJ 473.

In short, ‘survival’ means to be able to carry on business in the future. It goes without saying that to ‘carry on business’ presupposes that the company will carry on business as a healthy solvent company.

As such, s. 405(1)(b)(i) requires the Court to be satisfied that a JM Order “would be likely to achieve” the survival of the Applicant, or the whole or part of its undertaking as a going concern.

An initial question is the degree of probability imposed by the phrase “would be likely to achieve” the survival of Maju Holdings or the whole or part of its undertaking as a going concern. The words ‘likely to achieve’ are not defined.

I noted in Minda Muhibah (supra) at para 84 that there are 2 possible meanings.

First, in Re Harris Simmons Construction Ltd [1989] 1 WLR 368 Hoffman J (as he then was) explained the meaning of these words in section 8(1)(b) of the UK Insolvency Act 1986, which are analogous to s. 405(1)(b). He held at pp 370 and 371 that the phrase meant that there was a ‘real prospect’ of achieving the survival of the company.

Secondly, Justice Nadzarin in Spacious Glory Sdn Bhd v Coconut Three Sdn Bhd [2020] 1 LNS 1617 held at para 28, following a different English decision in AA Mutual International Insurance Co Ltd Re [2004] EWHC 2430 (Ch), that the burden is ‘more probable than not’ that one of the objectives in s. will be achieved. Spacious Glory (supra) has been widely followed.

In my judgment, by either definition, Maju Holdings has failed to prove, that a JM Order, if granted, will be likely to achieve the survival of the company as a going concern within s. 405(1)(b)(i).

My reasons are as follows. THE FIRST CONDITION –

This is the first pre-condition. At the outset, I do not think it is a seriously disputed that Maju Holdings is insolvent within s. 466(1). Certainly, Maju Holdings admits insolvency, see para 27 of its Consolidated Submissions at Encl 145 and at para 4.0, Part B of the Revised Proposal.

The first pre-condition of s. 405(1)(a) has been met. THE SECOND CONDITION –

The Revised Proposal also states that Maju Holdings owes RM1,890,403,023.00 to its creditors (at Part B, pp. 36 to 40, Encl 134) as follows: No. Group of Creditor(s) Money owed by the

Group A Creditors (Statutory Creditors) 4,381,810.00 2. Group B Creditors (Trade Creditors) 109,449,469.00 3. Group C Creditors (Other Creditors) 56,069,591.00 4. Group D Creditors (Related Creditors) 1,720,502,153.00 Total 1,890,403,023.00

The Revised Proposal has identified and listed all the creditors in Maju Holdings’ books and categorised them into 4 classes, namely (1) Statutory Creditors, (2) Trade Creditors, (3) Other Creditors and (4) Related Creditors.

It is proposed that the first 3 classes comprising Unrelated Creditors, of RM169,900,870.00 will be repaid in full. The Related Creditors in the 4th class, of RM1,720,502,153.00, will be subordinated to the debts of the Unrelated Creditors, and will only be paid after full repayment of the Unrelated Creditors.

This poses a real problem. The Related Creditors are owed over RM1.7 billion. There is nothing in the Revised Proposal to show how these Related Creditors are to be repaid or settled. They are merely to be subordinated. If they remain unpaid or substantially repaid, Maju Holdings will remain insolvent, and severely so. It would be difficult for these Related Creditors to waive their claims as any such waiver will severely prejudice their own creditors. No analysis was made as to the effect of such waiver.

In the circumstances, in the absence of a way of resolving these Related Creditors, Maju Holdings must be considered to be and will remain severely insolvent. And it follows that it cannot be said that it is more likely than not that the JM will result in the ‘survival’ of Maju Holdings as a healthy company, see para 29 above.

On this ground alone, the making of an order under s. 405 will be denied.

Maju Holdings relies on the following sources to fund the repayment of its creditors.

Maju Holdings relies heavily on the Maju Industrial Exchange Project in Ulu Tiram, Johor Bahru undertaken by ASM Green Sdn Bhd (“the Ulu Tiram Project”) as a source of repaying its creditors.

On 1.10.2024, Maju Holdings was appointed (Appendix 3 of the Revised Proposal) as a Turnkey Contractor of the Ulu Tiram Project, for RM1.3 billion. Maju Holdings expects a gross profit of RM400 million from this project, which would be used to settle its debts and also recover from financial distress. This is explained in Section 4.0 and the development proposal at Appendix 2 of the Revised Proposal at pp 48 to 54. Lending credibility to the Ulu Tiram Project is a letter dated 24.06.2025 from Majlis Bandaraya Pasir Gudang that the local council has granted Planning Permission.

Hence, it is intended that these debts would be settled fully from the gross profit of RM400 million from the Ulu Tiram Project. This is not ‘net profit’ which will involve deducting other costs such as financing costs to give a more realistic picture of how profitable the Ulu Tiram Project will be so as to allow the repayment of creditors.

No estimate has been provided to determine what the net costs will be so as to determine what the net profit would be available so that repayment to the creditors will be viable.

In this context, I note that this an extremely large project. It is a Turnkey Project, this phrase ordinarily means, as stated by Gunalan Muniandy JC (as he then was) in Austin Heights Sdn Bhd v Eco Water Technologies (M) Sdn Bhd (dahulunya dikenali sebagai Tropical Interest Sdn Bhd) [2011] MLJU 368 that: “ ‘turnkey’ project, meaning that the scope of work of the contractor began from design and construction and extended all the way up to full completion, commissioning and handing over without the involvement of other parties.”

The letter of award (at p.58 of Encl 134) states that there will be payment in instalments only when each Phase is completed. There will inevitably be interim financing costs and other construction costs to be initially funded by Maju Holdings at each stage. These could be substantial. Further a Performance Bond of 5% of the Contract Sum of RM1.3 billion is required, which will be expensive.

No real evidence was led as to how such construction costs will be funded. In short, there is little or no evidence to show sufficient funding may be raised.

Justice Nadzarin was faced with a similar lack of evidence of funding to complete the project in Goldpage Assets v Gan (supra). He held: “[44] After viewing the said letters I find that none of the so-called parties interested in collaborating with the Applicant have indicated that they have entered into any form of agreement with the Applicant and more importantly there is no indication that they would be injecting funds of any kind to the project or provide access to further financing for the project. [45] … Mere assertion as to the likelihood of financing without proper evidence is insufficient, see Doltable Ltd v Lexi Holdings plc [2006] 1 BCLC 384 where the High Court in England in a judgment by Mann J observed: [34] As to the first, it fails on the facts. There is no evidence as to the likelihood of a refinancing being achieved. The company had been seeking one for some months, apparently without success. There was no proper evidence that it was likely or indeed possible within an administration. There was evidence in the form of assertion, but that is not sufficient. … [55] Although the Applicant states that it has in its application focused on revitalizing the project and that the Companies Act 2016 does not say that the Applicant has to assist the JM in presenting a viable scheme, I agree with counsel for Plusbury that hope and speculation is not sufficient in a JM application and that it is incumbent upon the Applicant to convince this court that there is a real prospect rescuing the company through a Judicial Management application. I am guided by the Singapore case of Re Genesis Technologies International (S) Pte Ltd [1994] 2 SLR(R) 298 where the court held that a mere allegation of belief that the purposes of the judicial management would be satisfied without any substantiation would be insufficient to discharge its burden.”

I faced a similar problem in Minda Muhibah (supra, at paras 90 to 101 and the cases cited therein). Further, there is no analysis or estimate of the ‘net profit’ from the Ulu Tiram that will be available for the repayment of creditors. Even if the Ulu Tiram Project could be completed, the evidence does not show that there will be sufficient ‘net profit’ for Maju Holdings to be rehabilitated or survive as a going concern.

In CIMB Islamic Bank Bhd v Wellcom Communications (NS) Sdn Bhd & Anor [2019] MLJU 148 at para 9, the Court of Appeal emphasised the need for strict proof at all stages of the JM proceedings and not merely surmise and conjecture. Similar sentiments were more recently expressed by Leong Wai Hong J in Re Millennium Mall Sdn Bhd (supra) at para 28(b).

The second source of funding is for Maju Holdings to collect RM12 million from its subsidiaries as proposed under Sections 4.1 and 4.2 of the Revised Proposal. No real assessment is given of how this repayment could be achieved.

Lastly, ASM Development (Johor) Sdn Bhd (“ASMDT”) owns a piece of Land described as HSD 3716, PT 15344, Mukim of Chukai, District of Kemaman, State of Terengganu Darul Iman which is seeking a buyer to purchase the said land for RM28,000,000.00 to repay the debts owed by ASMDT to Maju Holdings. Again, this is highly speculative given that ASM is only looking for a buyer at this stage.

Current management including its directors are committed to secure further projects to generate additional revenue. Again, this is pure speculation.

In conclusion, there is a lack of real proof of sufficient financing to meet the costs of construction required to complete the Ulu Tiram Project. And whether sufficient net profit will be generated to repay the creditors.

There is also no evidence of how the debts of RM1.7 billion to the Related Creditors are to be settled. This means that Maju Holdings will remain severely insolvent. It seems settled that where a company is hopelessly or irreversibly insolvent, winding-up is the appropriate remedy. Indeed, it would be against commercial morality to allow such companies to trade, see Sri Hartamas Development Sdn Bhd v MBf Finance Bhd, HC [1990] 2 MLJ 21 at 251 and Airasia X Berhad v Boc Aviation Limited & Ors, HC [2021] 1 LNS 188 at para 106 to 108.

Absent real proof of adequate financing, and in the absence of a viable plan for the Related Creditors to be repaid so that Maju Holdings will return to solvency, I find that there is no ‘real prospect’ nor is it ‘more probable than not’ that it will survive as a going concern within s. 405(1)(b)(i).

A basic calculation shows this. The funds that will allegedly be raised are from 2 sources, being RM400 million (Ulu Tiram Project) and RM12 million from its subsidiaries (other sources remain highly speculative) is well short of the RM1.8 billion required to repay all its creditors.

As such, I dismissed Encl 1. With the dismissal of Encl 1, Encl 7 was rendered moot. Dated the 18th day of January 2026 ...........................tt............................ YA TUAN SAHERAN SUHENDRAN JUDICIAL COMMISSIONER OF THE HIGH COURT (COMMERCIAL 11) (INSOLVENCY 2) OF KUALA LUMPUR IN THE TERRITORY, MALAYSIA Counsel for the Applicant: Solicitors: Dato’ Jasbeer Singh, Nakeeran Kumar Kanthavel & Nur Adlina (PDK) Messrs. Jasbeer Nur & Lee (Kuala Lumpur) Counsel for the 1st Respondent: Solicitors: Wong Hok Mun, Ivanpal Singh Grewal, Keshvinder Kaur & Koh Mun Hoong Messrs. A J Ariffin Yeo & Harpal (Kuala Lumpur) Counsel for the 2nd Respondent: Solicitors: Faeza Suraya Roselan & Ahmad Fazli Messrs. Azmi Fadzly Maha & Sim (Kuala Lumpur) Counsel for the 3rd Respondent: Solicitors: S. Muhillan, Teoh Ting Wei & Samantha Sum Pui Si Messrs. Teoh Chambers (Kuala Lumpur) Case References: • AA Mutual International Insurance Co Ltd Re [2004] EWHC 2430 (Ch) • Airasia X Berhad v Boc Aviation Limited & Ors, HC [2021] 1 LNS 188 • Austin Heights Sdn Bhd v Eco Water Technologies (M) Sdn Bhd (dahulunya dikenali sebagai Tropical Interest Sdn Bhd) [2011] MLJU 368 • CIMB Islamic Bank Bhd v Wellcom Communications (NS) Sdn Bhd & Anor [2019] MLJU 148 • Gigatech Engineering Sdn Bhd v EnGreen Sdn Bhd (formerly known as EG Chemicals & Engineering Sdn Bhd [2023] 5 CLJ 628 • Leadmont Development Sdn Bhd v Infra Segi Sdn Bhd and another suit [2019] 8 MLJ 473 • Maju-TH Sdn Bhd (Lembaga Tabung Haji, proposed intervener) [2025] 8 MLJ 875 • Pembinaan BY Sdn Bhd v Minda Muhibah Sdn Bhd & Anor [2025] MLJU 4147 • Re Harris Simmons Construction Ltd [1989] 1 WLR 368 Hoffman J • Spacious Glory Sdn Bhd v Coconut Three Sdn Bhd [2020] 1 LNS 1617 • Sri Hartamas Development Sdn Bhd v MBf Finance Bhd, HC [1990] 2 MLJ 21 Legislation References: • Companies Act 2016 (“CA 2016”) • UK Insolvency Act 1986 Decision Date: 19th November 2025