Tan Cheng Chai v Ace Credit (M) Sdn Bhd (WA-22NCC-646-09/2023)

ACE CREDIT (M) SDN BHD …DEFENDANTS (Company No.: 200301003436 (605856-V))

CHANG AI NEE (IC No.: 710422-10-5248)

CHOONG CHEE MENG (IC No.: 610726-08-5743) Judgment [Trial investment agreement]

This suit concerns another frivolous defence by the 2nd defendant Chang Ai Nee [ “D2”] and the 3rd defendant Choong Chee Meng [“D3”] who are guarantors of the 1st defendant Ace Credit (M) Sdn. Bhd. [in liquidation] [“Ace Credit”].

On 24-10-2025, oral submissions was held before me after trial had concluded. On conclusion of submissions, I allowed the plaintiff’s claim against D2 and D3. The plaintiff did not proceed with his claim against Ace Credit since it had gone into insolvent liquidation.

My broad grounds were that I find that the plaintiff one Dato’ Sri Dr. Tan Cheng Chai, who is an investor, has proven his case against Ace Credit, which is the company that the plaintiff had invested in, and against D2 and D3 who had guaranteed the return of the Investment Sums and payment of the Investment Target Return.

On 20-11-2025, an appeal was filed by D2 and D3 to the Court of Appeal against my judgment. These are my Grounds of Judgment. Earlier judgments against Ace Credit, D2 and D3

D2 and D3’s defence is frivolous and devoid of merits. This is because the same defendants and the related company Ace Holdings Berhad had been sued in many suits by similar investors based on the same Investment Agreement and Guarantees before me. Judgments had been entered against Ace Credit, Ace Holdings Berhad and D2 and D3 as guarantors and reported as-i. Datin Sri Aidarahmi bt Ismail v Ace Credit (M) Sdn Bhd & Choong Chee Meng and Chang Ai Nee [2025] CLJU 602, HC; ii. Syed Gamal bin Syed Kechik Al-Bukhary v Ace Credit (M) Sdn Bhd & Ors [2024] MLJU 3525, HC; iii. Dato Seri Tengku Nerang Putra & Ors v Ace Holdings Berhad & Choong Chee Meng and Chang Ai Nee [2024] CLJU 3227, HC; iv. Mohd Farid Mohamed Sangido v Ace Credit (M) Sdn Bhd & Chang Ai Nee and Choong Chee Meng [2025] CLJU 603, HC; and v. Che Normah Bt Che Kerma v Ace Credit (M) Sdn Bhd & Choong Chee Meng and Chang Ai Nee in Kuala Lumpur High Court Suit No: WA-22NCC-503-10/2022 where judgment was allowed against the two guarantors only, as Ace Credit was in judicial management at that material time, and affirmed by the Court of Appeal in Appeal No.: W- 02(IM)(NCC)-976-06/2023 on 10-07-2024 based on the Broad Grounds.

The plaintiff invested RM 5 million with Ace Credit via three Investment Agreements. (“Investment Agreements”). [See Common Bundle of Documents (Enclosure 50) pages 3 - 20, pages 21 – 47 and pages 48 – 66.] This is not disputed by D2 &

The plaintiff pursuant to the Investment Agreements paid a total of RM 5,000,000-00 to Ace Credit. This is not disputed by D2 & D3. [See paragraph 6, Agreed Facts (Enclosure 43)]

In consideration of the plaintiff’s investment in Ace Credit, D2 and D3 executed three separate Director’s Personal Guarantees dated 22-09-2021, 23-09-2021 and 08-11-2021 respectively ("Personal Guarantees”) in favour of the plaintiff for the plaintiff’s investments via the Investment Agreements.

By the Personal Guarantees, D2 and D3 undertook to guarantee and ensure the full performance of all obligations and undertakings of Ace Credit under the Investment Agreements. Redemption and demand for payment

The plaintiff redeemed his investments upon maturity under the Investment Agreements by a letter dated 21-06-2022 to Ace Credit. [See paragraph 7, Agreed Facts, Enclosure 43 and page 71 B1].

On 21-07-2022, 22-07-2022 and 22-07-2022, Ace Credit sent three separate letters to the plaintiff wherein Ace Credit admitted that the plaintiff’s investments would mature on its respective dates, i.e. 29-08-2022, 21-09-2022 and 21-06-2022, but due to the COVID-19 pandemic, economic disruptions and the loan moratorium initiatives, there would be a delay in payment to the plaintiff of the Redemption Price and the pro-rated Target Return. [Enclosure 51 C1 pages 3 - 8].

The plaintiff disagreed with the delay in repayment and by three separate reply letters all dated 27-10-2022, and cc to D2 ad D3, insisted on repayment of the sums due under the Investment Agreements on their respective maturity dates. [See B1 pages 72 - 77].

The plaintiff’s solicitors issued a letter of demand dated 26-07- 2023 to Ace Credit. [See B1 pages 78 - 80].

The plaintiff’s solicitors also issued a letter of demand dated 26- 07-2023 to D2 and D3 [See B1 pages 81 - 83].

All three defendants have not responded to the Notices of Demand.

The plaintiff filed this suit in 2023 against the defendants.

The three defendants filed a joint Defence and a Counterclaim that the Investment Agreements are invalid in breach of the Moneylenders Act 1951.

Ace Credit went into liquidation on 14-03-2024. Therefore, this trial concerns only the plaintiff’s action against D2 & D3, and D2 & D3’s counter-claim against the plaintiff.

The witnesses called during the Trial are as follows: -

Tan Cheng Chai – PW1

Tan Lean Nee – PW2 D2 & D3

Choong Chee Meng – DW1

The issues are-i. Whether the plaintiff has proven his pleaded claim; ii. Whether the Investment Agreements are moneylending transactions; and iii. Whether D2 and D3 are discharged as a Proposed Scheme of Arrangement (“PSOA”) pursuant to section 366 of the Companies Act 2016 was approved by the Scheme Creditors who had attended the Court Convened Meeting on 30.10.2024 [“CCM”], including the plaintiff.

I shall now proceed to consider these issues. Issue [1] – whether the plaintiff has proven his pleaded claim

In my view, the plaintiff has proven his pleaded claim. The plaintiff is entitled to request from Ace Credit for redemption of his investments upon maturity.

By three letters dated 21-07-2022, 22-07-2022 and 22-07-2022, Ace Credit in fact agreed to refund. But no payment was made.

D2 and D3 rely on section 4.03 of the Investment Agreements to deny liability to refund.

I disagree. Section 4.03 of the Investment Agreements merely states that the plaintiff agrees and understands the financial risks associated with the investment. But this acknowledgment of risk does not imply that the repayments are contingent upon the financial performance of Ace Credit.

Section 4.03 of the Investment Agreements does not override sections 2.01 and 2.04 of the Investment Agreements which expressly provide that the Invested Sums are to be repaid upon maturity.

The same defence of section 4.03 of the Investment Agreements was raised by the same defendants in other suits and was rejected by the courts. [See the case of Datin Sri Aidarahmi bt Ismail v Ace Credit (M) Sdn Bhd & Choong Chee Meng and Chang Ai Nee [2025] CLJU 602 at [30, 38, 39], HC, and Syed Gamal bin Syed Kechik Al-Bukhary v Ace Credit (M) Sdn Bhd & Ors [2024] MLJU 3525 at [17 – 21], HC].

In conclusion, I find no merits in this defence of D2 and D3. Issue [2] – whether the Investment Agreements are moneylending transactions

I hold the Investment Agreements are not moneylending transactions.

The Investment Agreements state clearly that they are Investment Agreements whereby the investor is entitled to a fixed return upon maturity and repayment of his Investment Sums at the end of the period.

This is different from a moneylending whereby a lender lends money with interest charged. By way of analogy, the case before me is similar to a bank agreeing to give fixed interest annually to a customer who deposits money with the bank for a fixed period. At the end of the period or early cancellation, the bank has to repay the deposit sum to the customer.

The fact that Ace Credit is foolish enough to agree to pay a high fixed interest [knowing it’s an unsustainable way of doing business] and a customer is equally foolish enough to accept, does not turn a legitimate deposit agreement into a moneylending agreement. Similarly, if a bank agrees to give high fixed interest, this fact alone does not turn a deposit agreement into a moneylending agreement.

The Court of Appeal [and not the Federal Court as stated by the plaintiff’s counsel in his Written Submission Enclosure 63 at paragraph 26] in Perbadanan Kemajuan Negeri Selangor v Selangor Country Club Sdn Bhd [2016] 8 CLJ 211, CA held as follows: “[34] Accordingly, when a court is called upon to interpret a document, it looks at the language. If the language is clear and unambiguous and applies accurately to existing facts, it shall accept the ordinary meaning; for the duty of the court is not to delve into intricacies of the human mind to disclose one’s undisclosed intention, but only to take the meaning of the words used by him, that is to say his expressed intentions.”

DW1 in fact, when being cross-examined by the plaintiff’s counsel during the trial, had affirmed that the Investment Agreements were indeed investment agreements: CHUAH So, if that’s the case, my client, the plaintiff, is not a money lender, based on you lah. According to this Investment Agreement, you said it’s an investment. DW1 Yeah [Refer to Notes of Proceedings Enclosure 62, pages 34 - 35] Presumption under section 10 OA of the MA 1951

I also hold that the presumption under section 10 OA of the MA 1951 does not assist the defendants. Section 10 OA reads as follows: Presumption as to the business of moneylending 10 OA. Where in any proceedings against any person, it is alleged that such person is a moneylender, the proof of a single loan at interest made by such person shall raise a presumption that such person is carrying on the business of moneylending, until the contrary is proved. [Emphasis added]

The case before me is not a loan agreement. The plaintiff did not lend monies to Ace Credit. In fact, it is Ace Credit which is the licensed moneylender as stated and represented in the Investment Agreements at Recital A. And at Recital B it is stated that Ace Credit agreed on the plaintiff investing in Ace Credit.

I note the defence of moneylending raised by D2 and D3 here was raised by them in other suits and was rejected by the courts in-i. Datin Sri Aidarahmi bt Ismail v Ace Credit (M) Sdn Bhd & Choong Chee Meng and Chang Ai Nee [2025] CLJU 602, HC at [50 - 51]; and ii. Che Normah Bt Che Kerma v Ace Credit (M) Sdn Bhd & Choong Chee Meng and Chang Ai Nee in Kuala Lumpur High Court Suit No: WA-22NCC-503-10/2022 at [42] and affirmed by the Court of Appeal in Appeal No.: W- 02(IM)(NCC)-976-06/2023 on 10-07-2024 based on the Broad Grounds.

The defence of moneylending raised by D2 and D3 here were in fact dropped by them in an earlier suit. [See Syed Gamal bin Syed Kechik Al-Bukhary v Ace Credit (M) Sdn Bhd & Ors [2024] MLJU 3525, HC at [15]].

I therefore hold that issue 2 is answered in the negative and the Counterclaim also has no merits.

I now move to issue 3. Whether D2 and D3 are discharged as a Proposed Scheme of Arrangement (“PSOA”) pursuant to section 366 of the Companies Act 2016 was approved by the Scheme Creditors who had attended the Court Convened Meeting on 30-10-2024 [“CCM”], including the plaintiff D2 and D3’s contentions

D2 and D3 contend [See Enclosure 65 Defendants’ Written Submission in Reply paragraphs 103 - 108] the plaintiff had attended the CCM as he had filed a proof of debt against Ace Credit. This is reflected in Ace Credit’s liquidator’s affidavit at Exhibit “LL-1” (item 37) where the plaintiff had filed for a debt of RM 5,156,493.15. [See page 150 [not page 151 as stated by plaintiff’s counsel in P WS] of Bundle B2 [Enclosure 59]].

D2 and D3 also contend that by an Originating Summons No.: BA- 24NCC(SOA)-1-08/2024 filed by Ace Credit’s liquidator in the Shah Alam High Court [“SAHC OS”], the PSOA pursuant to Section 366 of the Companies Act 2016 was approved by the Scheme Creditors who had attended the CCM, including the plaintiff. [See pages 3 to 97 of Bundle B3 [Enclosure 60].

One of the salient terms of the PSOA under section 469 is, inter alia, as follows: - “The PSOA shall be for the full and final settlement of the Scheme Creditors, including any corporate guarantees given by the Company, and/or any personal guarantees, if any. Accordingly, the corporate guarantees provided by the Company and/or personal guarantees provided by its present and former directors shall be discharged at the Completion Date.”

D2 and D3 therefore contend in the event the scheme of arrangement is approved by the Shah Alam High Court in the SAHC OS, D2 and D3 shall not be liable for any claim under their Personal Guarantees. Plaintiff’s reply [Enclosure 72 in paragraphs 40 - 41]

The plaintiff replied that D2 and D3’s reliance on the PSOA under section 366 of the Companies Act 2016 is misconceived as the PSOA has yet to receive sanction by the Shah Alam High Court. The Plaintiff’s cause of action therefore remains unaffected by the PSOA process.

The plaintiff also contend that even if the PSOA was sanctioned, it may only be sanctioned in part, or may remain conditional upon compliance by Ace Credit with its terms. Unless and until those conditions are fully satisfied, creditors remain entitled to pursue their remedies. The guarantors cannot rely on a hypothetical or incomplete scheme to defeat the plaintiff’s rights. Accordingly, the reliance on the PSOA is premature. Court’s analysis

This issue raises an interesting point whether a person’s monetary claim against his guarantors can be waived by a PSOA proposed by the principal debtor which has received the requisite approval by the scheme creditors and sanctioned subsequently by the Court under section 366 of the Companies Act 2016.

I need not decide this issue as the PSOA has yet to be sanctioned by the Shah Alam High Court. The plaintiff’s cause of action therefore remains unaffected by the PSOA process.

For the reasons above, I allow the plaintiff’s claim in the Statement of Claim at paragraphs 23[a], [b] and [e] costs. Interests at 5% p.a. payable on the two sums from date of filing of writ 06-09-2023 till payment.

The Counterclaim of D2 and D2 is dismissed with costs.

I award costs of RM 20,000 to be paid by D2 and D3 to the plaintiff subject to allocatur. Dated: 03rd December 2025 …………(signed)……………. Leong Wai Hong Judge High Court of Malaya Kuala Lumpur (NCC 6) Counsel for plaintiff: Chuah Jo Shua. Zaid Ibrahim & Co. (Penang) Counsel for 2nd and 3rd defendants: Hilwa Nazifa binti Bustam and Aliya Zamimi. Shahrizat Rashid & Lee (Kuala Lumpur)

Che Normah Bt Che Kerma v Ace Credit (M) Sdn Bhd & Choong Chee Meng and Chang Ai Nee.

Datin Sri Aidarahmi bt Ismail v Ace Credit (M) Sdn Bhd & Choong Chee Meng and Chang Ai Nee [2025] CLJU 602, HC.

Dato Seri Tengku Nerang Putra & Ors v Ace Holdings Berhad & Choong Chee Meng and Chang Ai Nee [2024] CLJU 3227, HC.

Mohd Farid Mohamed Sangido v Ace Credit (M) Sdn Bhd & Chang Ai Nee and Choong Chee Meng [2025] CLJU 603, HC.

Perbadanan Kemajuan Negeri Selangor v Selangor Country Club Sdn Bhd [2016] 8 CLJ 211, CA.

Syed Gamal bin Syed Kechik Al-Bukhary v Ace Credit (M) Sdn Bhd & Ors [2024] MLJU 3525, HC.

Moneylenders Act 1951, section 10 OA.