Maju-Th Sdn Bhd v Lembaga Tabung Haji (WA-28JM-8-03/2024)

This is an appeal to the Court of Appeal from my decision on 18.12.2025 dismissing the Petition (“Encl 1”) for an Order that Maju-TH (“Maju-TH”) be placed under Judicial Management (“JMO”) under s. 405(1) of the Companies Act 2016 (“CA 2016”).

All references to sections herein are with reference to sections in CA 2016.

The Contents of these Grounds are as set out in the table below. Contents Para No INTRODUCTION & MAJU-TH 4-6 BACKGROUND FACTS 7-10 The Winding Up Suit 11-17 ENCLOSURE 1 18-21 The Revised Proposal & s. 22-29 THE FIRST CONDITION – MAJU-TH IS INSOLVENT - S. 405(1)(a) 30-35 THE SECOND CONDITION – S. 405(1)(b)(i) OR (iii) 36 First Limb Survival as a Going Concern - s. 405(1)(b)(i) 37-42 Second Limb Better Realisation of Assets - s. 405(1)(b)(iii) 43 THE BURDEN 44-51 SUMMARY & FINDINGS 52 The First Limb Survival as a Going Concern - s. 405(1)(b)(i) 53-61 The Second Limb – Better Realisation of Assets - s. 405(1)(b)(iii) 62-70 CONCLUSION 71-72

Maju-TH was established under the Companies Act,1965 on 12.10.1990 as a private company limited by shares. It was previously known as ASM Development (Selangor) Sdn Bhd. The registered office and business address of Maju-TH is Level 21, Maju Tower, 1001 Jalan Sultan Ismail, 50250 Kuala Lumpur. The total share capital of Maju-TH comprises 62,000,000.00 ordinary shares.

Maju-TH is a joint venture company. ASM Development Sdn Bhd (“ASMD”) is the majority shareholder holding 51% of the issued and paid-up capital of Maju-TH. The Respondent (“Tabung Haji”) is the minority shareholder holding 49%.

Maju-TH is a project developer. Its major asset is a piece of land allegedly valued at approximately RM59 million held under HSD 72978, PT 3896 in the Mukim of Petaling, Wilayah Kuala Lumpur (“the Land”).

In or around 1995, AMSD and Tabung Haji decided to venture into property development as joint venturers using Maju-TH as a vehicle. ASMD being the then sole shareholder of Maju-TH entered into a Share Sale Agreement dated 9.10.1995 (“Share Sale Agreement”) and a Joint Venture Agreement dated 9.10.1995 (“JVA”) with Tabung Haji. AMSB sold 49% of its equity in Maju-TH to Tabung Haji comprising 30,380,000 shares at RM1.50 per share for RM45,570,000.00.

The objective of the joint venture is as set out in Recital C of the JVA as follows: “C. The Company’s object is to develop and to turn to account any land acquired by or in which the Company is interested which includes but not limited to privatised projects, and in particular by laying out and preparing the same for building purposes, constructing, altering, pulling down, decorating, maintaining, furnishing, fitting up and improving buildings, and by clearing, plating, paving, draining, farming, cultivating, letting on building lease or building agreement and by advancing money to, and entering into contracts and arrangements of all kinds with builders, tenants and others and to carry out any other business which may seem calculated directly or indirectly to advance the Company’s interest.”

9.

Article 7 of the JVA provided that Maju-TH was to develop and construct a commercial building on the Land (“the Project”). Also, by Article 7, Tabung Haji and ASMD agreed that Maju-TH would design, carry out, complete and manage the Project including the sale of the buildings and premises on the Project.

It is claimed that by reason of the JVA and the Share Sale Agreement, the relationship between the shareholders of Maju-TH was one of mutual trust and confidence.

Tabung Haji claims that it entrusted ASMD and Maju-TH to develop the Project. However, it is alleged that they failed. Instead of developing the Land, it was used as a car park, storage for heavy construction vehicles and residential quarters for construction workers.

As such, Tabung Haji claimed that the objective and the substratum for which Maju-TH was formed, had failed, see para 10 Encl 15. Tabung Haji has expressed its intention to exit its investment in Maju-TH.

To this end, Tabung Haji commenced a Petition to wind-up Maju-TH under s. 465(1)(h) vide KL HCt Companies (Winding Up) No.: WA-28NCC-116-02/2022 (“Winding Up Suit”) on the just and equitable ground.

During the Case Management in the Winding Up Suit on 15.3.2024, Maju-TH’s solicitors informed the Court that ASMD had filed an application (“JMA”) for Maju-TH to be placed under Judicial Management (“JM”) and asked that the decision of the Winding Up Suit be fixed after the hearing of the JMA.

Tabung Haji objected. The learned Judge, however, fixed the Winding Up Suit for decision on 1.4.2024.

On 25.3.2024, Maju-TH’s solicitors in the Winding Up Suit then wrote informing the Court that Maju-TH had filed a JMA. Therefore, the decision for the Winding Up Suit fixed on 1.4.2024 had to be vacated by reason of the automatic moratorium triggered under s. 410 upon such filing. The Winding Up Suit was then fixed for Case Management on 16.5.2024.

Encl 1 was filed on 25.03.2024 for a JMO to be made under s.

The JMO was stated to be primarily to rehabilitate Maju-TH or to preserve all or part of its business as a going concern and to ensure the interests of creditors would be better served than by a winding up; Maju-TH also submitted that the JMO would allow Maju-TH a more advantageous realisation of the Land, see Encl 55, at para 23. 7 19. Maju-TH emphasises that no creditors have intervened nor objected to Encl 1. However, Tabung Haji as the minority shareholder did obtain an order to intervene and opposed Encl 1.

For the reasons set out below, I find that on the evidence, Encl 1 should be dismissed. In view of this finding, I do not find it necessary to consider s. 404, nor to consider the submission that Encl 1 was an abuse of process, filed merely to trigger the automatic moratorium.

My reasons for the dismissal of Encl 1 are as follows. The Revised Proposal & s.

The JMO is to be made pursuant to s. 405(1)(b). It 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 s. 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 s. 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.

Under s. 405, the main issue is whether I consider that a JMO, if granted, would be ‘likely to achieve’ the survival of the company under s. 405(1)(b)(i) or a better realisation of its assets under s. 405(1)(b)(iii).

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

First, it appears that Maju-TH 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, it is not said that the appointment of a JM will be in the ‘public interest’ within s. 405(5)(a) nor do I believe that it would. As Maju-TH 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, see Pembinaan BY Sdn Bhd v Minda Muhibah Sdn Bhd & Anor [2025] MLJU 4147 at para 77.

As such, Maju-TH is left with ss. 405(1)(b)(i) and (iii) as the bases of Encl 1. In this respect, there are 2 conditions that must be satisfied before a JMO will be made.

The first is that by s. 405(1)(a), Maju-TH must be insolvent.

The second has 2 further alternate limbs, in that the following would be achieved: a) under ss. 405(1)(b)(i), the survival of Maju-TH (First Limb); OR b) under ss. 405(1)(b)(iii), a better realisation of the assets of Maju-TH (Second Limb). THE FIRST CONDITION –

This is the first pre-condition of s. 405. At the outset, I do not think it is seriously disputed that Maju-TH is insolvent.

Maju-TH admits that it is currently insolvent. Indeed, the Revised Proposal states that Maju-TH is unable to pay its debts to its creditors (see para 4.2, p 36, Encl 33). These creditors (“the Creditors”) total RM10,221,133.50 comprising: No. Name of Creditor(s) Money owed by Maju-TH (RM)

Pejabat Tanah dan Galian Wilayah Persekutuan 403,353.00 2. Dewan Bandaraya Kuala Lumpur 510,174.00 3. Crowe Malaysia 2336.24 4.

3682.54 5. Pricewaters Coopers Taxation Services Sdn Bhd 14,310.00 6. YYC Tax Consultants Sdn Bhd 2890.00 7. ASM Development Sdn Bhd 7,211,175.66 8. Maju Holdings Sdn Bhd 2,073,212.06 Total 10,221,133.50

In the Revised Proposal, Maju-TH has categorised the Creditors as follows: a) Group A (Statutory Creditors) - Creditors (1) and (2); b) Group B (Other Creditors) - Creditors (3) to (6); and c) Group C (Intercompany Creditors) - Creditors (7) and (8).

These liabilities have also been confirmed in Maju-TH’s Financial Statements for the Financial Year Ended 31.12.2024 (“AFS 2024”), audited by YYC & CO PLT, see p. 137, Encl 33.

Tabung Haji, on the other hand, submits that the major debts of over RM9 million (out of a total of RM10.2 million) are said to be owed to related parties comprising ASMD and Maju Holdings Sdn. Bhd (as per Creditor 7 and 8 in the table above). And that these debts are fictitious, created only to support Encl 1, see Tabung Haji’s Submissions at Encl 36 at para 42.

However, given that these debts are recognised by the Auditors in AFS 2024 and in the absence of sufficient evidence to the contrary, I am satisfied that the first pre-condition in s. 405(1)(a) has been met; Maju-TH is insolvent. THE SECOND CONDITION – S. 405(1)(b)(i) OR (iii)

As stated above, the 2 possible alternate limbs under s. 405(1)(b) that must be satisfied before a JMO may be made are s. 405(1)(b)(i) (“the First Limb”) or s. 405(1)(b)(iii) (“the Second Limb”). First Limb Survival as a Going Concern - s. 405(1)(b)(i)

It is trite that the primary objective of a JMO under the First Limb, s. 405(1)(b)(i), is to rescue a financially distressed company through a rehabilitation plan managed by a Court appointed JM. The section provides that it is to ensure the survival of the company.

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.

Here, the rehabilitation plan is the Revised Debt Settlement Proposal, Ex B-1 Encl 33, (“Revised Proposal”). Remarkably, the Revised Proposal promises a 100% pay-out to all Creditors.

The Revised Proposal is an inherently simple plan which, in essence, involves the following (para 4 of Ex B-1 of Encl 33). a) First, an investor would purchase the Land at a price estimated at RM59,023,000.00 based on a valuation dated 21.1.2021, see pp 51 to 87, Ex-B1 Encl 33. The proceeds appears to be enough to repay the Creditors. b) Secondly, a Collaboration Agreement would be signed between Maju-TH and the said investor, whereby Maju-TH would be rehabilitated as a going concern by being appointed as contractor to ‘continue’ developing the Project on the Land, see para 1.3, p 32, Encl 33. Maju-TH would be paid progressively by the Investor, para 4.1(ii) of Ex B-1, Encl 33. c) Thirdly, the Revised Proposal is conditional on the grant of a JMO and the ‘formalisation’ of the Revised Proposal by Maju-TH’s creditors, which, it is said, could not be achieved if Maju-TH was wound up.

In this respect, Maju-TH is allegedly in final talks with the potential investor (“the Investor”). As can be seen, the sale to the investor is central to the Revised Proposal. The Investor has been identified as ERBE World Group Sdn Bhd (“ERBE”). Second Limb Better Realisation of Assets - s. 405(1)(b)(iii)

As an alternative, Maju-TH also relies on the Second Limb, s. 405(1)(b)(iii), in that the Revised Proposal would allow for a better realisation of its assets (the Land) than in a winding up. This is commonly known as a ‘manged sell down’ in lieu of a forced sale in a liquidation, see Novabrite Lighting Sdn Bhd v Emrail Sdn Bhd (Balaranee Construction, proposed intervener) [2024] MLJU 2986 (reversed on other grounds) at para 86.

In my judgment, the key issue in the analysis is the burden that Maju-TH must satisfy to obtain a JMO either of the 2 alternate limbs – the First Limb in s. 405(1)(b)(i) or the Second Limb in s. 405(1)(b)(iii).

Under either limb, the Court must ‘consider’ that a JMO “would be likely to achieve” the purposes set out therein. This phrase determines the burden that needs to be satisfied.

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

First, in Re Harris Simmons Construction Ltd [1989] 1 WLR 368 Hoffman J (as he then was) explained the meaning of these words in s. 8(1)(b) of the UK Insolvency Act 1986, which is 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 as set out in paras 82 to 84 of Minda Muhibah (supra).

In either case, the burden must be discharged by strict proof and not on surmise or conjecture, see the Court of Appeal in CIMB Islamic Bank v Wellcom Communication NS Sdn Bhd [2019] 4 CLJ 1.

In my judgment, Maju-TH has, by either definition, failed to discharge this burden.

My reasons are as follows.

As stated above, the burden will only be satisfied if there is strict proof establishing that it is more ‘probable that not’ or that there a ‘real prospect’ that a JMO will achieve: a) Maju-TH’s survival as a going concern through the Revised Proposal (which involves a sale of the Land to ERBE) within the First Limb; or b) a better realisation of Maju-TH’s assets (through a managed sale by a JM other than in a winding up) within the Second Limb. The First Limb Survival as a Going Concern - s. 405(1)(b)(i)

Maju-TH relies heavily on the Revised Proposal comprising a sale of the Land and the completion of the Project, see ss. 2.0 and 4.0 of the Revised Proposal in Ex B-1, Encl 33. A broad development proposal (which is really a lay-out plan) is also attached to the Revised Proposal, see pp. 102 to 125, Ex B-1 Encl 33.

I do not accept the bare alleged statements of the independent financial adviser (“IFA”) that the Revised Proposal will allow Maju-TH to carry on as a going concern, see para 10 of Ex B- 1 Encl 33. If actually made, they are unverified.

Maju-TH maintains that if Encl 1 is allowed, the JM will manage Maju-TH’s business under the Revised Proposal which will result in the completion of the Project and the repayment of all its creditors in full. In contrast, if Maju-TH is wound up, it is submitted that the Investor will not proceed further and the Revised Proposal will fail thus preventing its revival and survival as a going concern, see pp. 102 to 125, Ex B-1 Encl 33.

The satisfaction of the burden is the difficulty faced by Maju-TH – that it is likely to achieve survival as a going concern as a healthy company going forward.

It is perplexing that Maju-TH suggests that it will be able to ‘continue’ with such a large Project even though it is a self-confessed insolvent. There is no evidence led as to how Maju-TH (to be appointed a turn-key contractor, see Maju-TH Submissions at paras 38 and 39 of Encl 55) will fund the continuation and construction of the Project while awaiting the progressive payments from ERBE. The need for such interim financing is real. There was a similar defect in the JMA in Maju Holdings Sdn Bhd (Maju-TH’s related company) notwithstanding the anticipated progress payments from the owner, see Maju Holdings Sdn Bhd v Bridgex Sdn Bhd & Ors [2026] MLJU 173, at paras 50 to 53. The absence of evidence of funding also resulted in the failure of the JMA in Minda Muhibah (supra) at paras 41 to 45.

It is not surprising that Tabung Haji is sceptical of the Revised Proposal given that the Land has been in control of Maju-TH for over 28 years with no success. There were at least 4 proposals which all failed and it remains a glaring fact (that despite cross complaints against Tabung Haji) all Maju-TH could do is to use the Land as a car park. Tabung Haji complains that such use is a breach of the JVA given the objective of Maju-TH to develop the Land.

Given Maju-TH’s track record with the Project, and the absence of any evidence of funding (at least in principle) for the construction costs of the Project, I cannot see it can be said that it would be ‘more probable than not’ or there is a ‘real prospect’ that Maju-TH will achieve ‘survival as a going concern’ by the sale of the Land and the continuation and completion of the Project.

Lastly, what adds to the doubt is that there is also insufficient proof to show that the sale to ERBE (key to the Revised Proposal) will likely be achieved (see the analysis at paras 61 to 68 below). This is of course central to the Revised Proposal.

The First Limb fails. The Second Limb – Better Realisation of Assets - s. 405(1)(b)(iii)

This alternative is, in effect, a ‘managed sale’ of the Land. For a ‘managed sale’ to result in a better realisation of the Land, it must be shown that a sale (at least in principle) is in place will result in greater returns than in a liquidation. There is simply insufficient proof to justify this conclusion.

The only talk of a sale of the Land is the proposed sale to ERBE. As evidence, Maju-TH has exhibited a Non-Disclosure Agreement (“the NDA”) with ERBE, see Ex B-2 p 92, Encl 33). There is no other evidence.

There are major flaws with the NDA if it is relied on as real proof of a sale. It does not provide any undertaking or commitment by ERBE to purchase the Land at any indicative price. On the contrary, by clause 14 of the NDA, it is provided that nothing in the NDA shall be construed as creating any obligation or an expectation on the part of either party to enter into a business relationship of any nature with the other.

Most importantly, there is no indicative sale price for the Land. And there is also no evidence as to the estimated price that could be obtained in a liquidation sale. As such, it cannot be said that the necessary burden has been discharged to show that a better realisation of the Land than in a winding up within the Second Limb, would be achieved.

Further, there is real doubt whether the sale to ERBE would be successful. The search on ERBE shows that its revenue for 2023 is only RM247,352.00 with a loss of RM48,180.00, see the SSM search on ERBE at Exhibit “LTH-3” of Encl 59. This throws doubt on ERBE’s financial capability to acquire the Land at RM58,000,000.00.

Mere statements in s. 7.0 of the Revised Proposal (p 38, Ex B- 1 Encl 33) that in a liquidation, the Land would be sold at a much lower price than a disposal by a JM for the purposes of a development, do not carry much weight.

I have some real some doubt as to whether a liquidator’s sale will realise any less value that a sale by the JM. While this may ordinarily be the case in liquidation sales, there must be some supporting evidence. The argument that with the impending revival of the Project, a higher value for the Land will be achieved, is illusory. The Project has been pending for years. The evidence for the revival of the Project after lying idle for over 28 years, is thin.

The burden remains with Maju-TH to satisfy the Court with strict proof that the sale to the Investor is ‘more probable than not’ (within Spacious Glory (supra) or that there is a ‘real prospect of success’ that the sale (within Re Harris Simmons (supra) would achieve a greater return that in a liquidation.

In my judgment, and as with my finding that Maju-TH has not discharged the burden for the First Limb, the burden for the Second Limb as not been met either.

As such, under either limb, the JMA fails. In the circumstances, I dismissed Encl 1 with costs of RM20,000.00 subject to allocatur.

As a postscript, I noted that the final outcome for Maju-TH could be a winding up. Counsel for Tabung Haji impressed upon me not to grant the JMA; the JMA may stifle the pending Winding Up Suit, which may afford the more appropriate remedy of winding up, see Encl 52. It may be that the relationship between ASMD and Tabung Haji has so irretrievably broken down that no JMO could resolve it. Obviously, I cannot make such a finding in this application. That is, of course, a matter for the Winding Up Suit. Dated the 18th day of February 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: Nakeeran Kumar Kanthavel Messrs. Jasbeer Nur & Lee (Kuala Lumpur) Counsel for the Intervener: Solicitors: Neo Chi Chyn Messrs. Firoz Julian (Kuala Lumpur) Case References: • AA Mutual International Insurance Co Ltd Re [2004] EWHC 2430 (Ch) • CIMB Islamic Bank v Wellcom Communication NS Sdn Bhd [2019] 4 CLJ 1 • Leadmont Development Sdn Bhd v Infra Segi Sdn Bhd and another suit [2019] 8 MLJ 473 • Maju Holdings Sdn Bhd v Bridgex Sdn Bhd & Ors [2026] MLJU 173 • Maju-TH Sdn Bhd (Lembaga Tabung Haji, proposed intervener) [2025] 8 MLJ 875 • Novabrite Lighting Sdn Bhd v Emrail Sdn Bhd (Balaranee Construction, proposed intervener) [2024] MLJU 2986 • Pembinaan BY Sdn Bhd v Minda Muhibah Sdn Bhd & Anor [2025] MLJU 4147 • Re Harris Simmons Construction Ltd [1989] 1 WLR 368 • Spacious Glory Sdn Bhd v Coconut Three Sdn Bhd [2020] 1 LNS 1617 Legislation References: • Companies Act 1965 • Companies Act 2016 (“CA 2016”) • UK Insolvency Act 1986 Decision Date: 18th December 2025