Tan Eng Keat and Yap Bing Yew for the Applicant [Messrs Gan, Lee & Tan] v Harvinderjit Singh a/l Manjit Singh and Alicia Goh Ai Chen for the Liquidator / Respondent [Messrs Varun & Goh] (28PW-458-12/2020)

(M) Sdn Bhd (In Liquidation) (Company No.: 91874-W) (“Applicant”); And In the matter of KINOS FOOD INDUSTRIES (M) SDN BHD (IN LIQUIDATION) (Company No.: 91874-W) (“Respondent”). RE: KINOS FOOD INDUSTRIES (M) SDN BHD (IN LIQUIDATION) (Company No.: 91874-W) GROUNDS OF JUDGMENT (Enclosure 1) 2 Summons

In the Form of Summons dated 9.12.2020 (Summons) in Enclosure 1, the Applicant is seeking pursuant to section 482(b) and 510 of the Companies Act 2016 and/or the inherent jurisdiction of the Court for the following orders:- a) That Mr Ling Sie Kiong (NRIC No.: 750331 -13-5245) of HC Advisory Sdn Bhd at Suite 8-12-5, 12th Floor, Menara Mutiara Bangsar, Jalan Liku, Off Jalan Riong, 59100 Kuala Lumpur, be removed as the liquidator of the Respondent (“the Liquidator”); b) That pursuant to prayer (1) above, Mr Gabriel Teo Chun (NRIC No.: 710710-13-5089) [Approval No.: 10001/10/2022 P] of GTC Corporate Recovery (NF 2175) at 18 -11-1, Menara Q Sentral, No. 2A, Jalan Stesen Sentral 2, Kuala Lumpur Sentral, 50470 Kuala Lumpur, an approved liquidator be appointed as the new liquidator of the Respondent; c) That pursuant to prayers (1) and (2) above, Mr Ling Sie Kiong, shall within seven (7) days from the date of service of this Honourable Court’s Order on him, deliver to Mr Gabriel Teo Chun all books, records, documents, papers, accounts, ledgers, invoices, money, and assets of the Respondent in his possession, and all other books, documents, papers, and accounts in his possession relating to the office of the liquidator; d) That Mr Ling Sie Kiong shall within fourteen (14) days from the date of service of this Honourable Court’s Order on him, lodge with the Companies Commission of Malaysia (“ CCM”) and the Director General of Insolvency (“DGI”), in the prescribed form and verified by statutory declaration an account of his receipts 3 and/or payments and a statement of the position in the winding-up of the Respondent for the period from 14.01.2020 to the date of the handing over of the documents referred to in prayer (3) above; e) In the interim, an injunction restraining Mr Ling Sie Kiong and/or his representatives, agents, proxies, any other individuals, companies or parties related to Mr Ling Sie Kiong from dealing with, disposing and/or selling off the assets and business of the Respondent until the disposal of this application ; f) That costs of this application be borne by the Respondent.

The grounds in support of the Summons inter alia states:

2.1 The Liquidator has not acted in the best interest of the creditors.

2.2 The Liquidator has denied information to the creditors.

2.3 The Liquidator has acted in excess or in breach of his statutory duties.

2.4 The Liquidator has not acted in good faith and/or his conduct has indicated a lack of a statutory duty of care and diligence.

2.5 The contracting, delegation and/or outsourcing of the liquidation administration to HC Advisory Sdn Bhd constituted a dereliction of duty and/or misconduct by the Liquidator. Background Facts

The Respondent was wound up vide a High Court Order dated 14.01.2020 and Mr Ling Sie Kiong was appointed as the Liquidator of the Respondent (“Liquidator”). 4

On 05.03.2020, one Dato' Raveendra Kumar Nathan (“Dato' Raveendra”) from HC Advisory Sdn Bhd (“HC Advisory”) sent a letter addressed to the Applicant, requesting that the Applicant submit its Proof of Debt (“POD”) as its name was listed in the Respondent’s Statement of Affairs (“SOA”). Dato’ Raveendra is allegedly the “authorised representative” of the Liquidator.

On 02.06.2020, the Applicant submitted its POD and it was admitted on 22.06.2020.

Between June 2020 and November 2020, the Applicant had requested for information from the Liquidator. However, most of the information was denied. Court’s Findings Raising of Alleged new Issues

In the proceedings before this Court, the Respondent had objected to the Applicant raising new and fresh issues time and again after the filing of the Summons and requested that the said new issues be expunged, with particular regards to;

(i) Enclosure 68 wherein the Applicant had referred to other affidavits, namely enclosures 17, 27, 28 and 32

(v) Enclosure 73 where it is alleged that the Liquidator had not allowed the Applicant to inspect the POD’s

(x) Enclosure 28 as to the books and accounts of the Respondent.

The Applicant stated that the usage and/or reference to Enclosures 17, 27, 28 and 32 were exchanged in respect of Forms of Summons in Enclosure 16 (Application for Interim Injunction of Preventive Reliefs) and that the allegations have been responded to by the respective parties who are well aware of the contents of the Affidavits and thus the parties will not be taken by surprise. In reply the Liquidators learned counsel had stated that such a procedure was not provided for under the Companies (Winding Up) Rules 1972. 6

I hold that the Companies (Winding Up) Rules 1972 does not provide for any form of notice to be given in respect of the usage and/or reference to other affidavits in the same proceedings albeit for another separate Form of Summons as per the said Enclosure 16 herein which was an Application for Interim Injunction of Preventive Reliefs.

Any affidavits to be used in this Summons therefore has to be properly averred and laid out in an affidavit for that purpose only and based on whatever directions that the Court had made in respect of the filing of the said Affidavits in order to avoid confusion and the use of any other affidavit which will have the effect of by passing the Court’s directions as mentioned and the possible ‘surprise attack’ and/or new issues raised to the other side as a result of the reference and/or usage of the said affidavits.

This Court will for the above said reasons henceforth not allow the usage and/or reference to Enclosures 17, 27, 28 and 32 to be used for the purpose of the Summons in Enclosure 1.

As to Enclosure 72, paragraphs 18, 20, 24-28 which consists inter alia of facts and/or information and/or issues regarding the invoices and delivery orders under Secret Ingredients Sdn Bhd being fictitious and/or fabricated, the various letters between the Applicant and the Liquidator dated 20.11.2021, 26.11.2021 and 7.9.2021, the issue of full and frank disclosure with regards Xegion Consultancy Sdn Bhd, Agri-Palm Far East Sdn Bhd, Rimbun being related to the liquidation of the Respondent, the advance by Rimbun of RM100,000 to LBB, 7 the Assets Offsetting Agreement with holding company dated 1.7.2020 respectively, which the Applicant contends was discovered through various related Suits filed and the other issues raised in the respective enclosures I have referred to above; I hold that these are completely new and fresh issues which cannot be brought in at this stage of the proceedings before me as there would, in the circumstances, be no end to new issues being raised time and time again or as and when some purported new issue and/or evidence and/or fact is discovered by the Applicant.

With respect, the Applicants contention that they are all related to previous affidavits and they have to rely on the Liquidators reply to extract new information and to respond to the same, and thus it is not fair and prejudicial to the Applicant if they are not allowed to rebut or raise the said new and fresh issues, are in my view totally misconceived as there has to be a finality in the issues or grounds supporting the proceedings i.e the Summons before me. It cannot be that each time the Applicant comes across an alleged new issue and raises the same to support the Summons, which had already consisted of various original grounds to support it, then the opposing side has to respond accordingly to these new issues.

Unless leave for the same has been obtained before the Court to admit the said new issues based on acceptable principles, the said new issues cannot and should not be raised by the Applicant in any further affidavits in an attempt to raise continuous and/or additional grounds to support and/or fortify his Summons. This would prevent the Liquidator from having to continuously defend himself from new allegations against him in the present Summons before me. 8

In support of my decision on this issue, I refer to Cheah Tham Swee & anor v OUB Bank Limited & Ors [1989] 1 MLJ 426 where Mahadev Shankar J (as he then was) held: “In the absence of specific rules on the matter I am of the view that in the interests of the effective administration of justice the rules as to the filing and service of pleadings should apply mutatis mutandis to affidavits. At the very least the parties should thus have adequate notice of each others' cases before the hearing and avoid a trial by ambush.”

Henceforth, this Court will not allow and hereby expunges the usage and/or reference to Enclosures 17, 27, 28 and 32 as well as paragraphs 18, 20, 24 -28 of Enclosure 72 and the other issues raised in the respective Enclosures I have referred to above in the matter before me. It will then follow that this Court will also not refer to nor come to a decision on the submissions raised on these new issues The only grounds in support of the Summons which can be relied on and which this Court will henceforth consider are the original grounds canvassed by the Applicant in support of the Summons and such other grounds which this Court had in the matter herein allowed to be taken in the course of the proceedings. Leave

This Court will now address the issue of whether leave is required to commence the Summons herein and in coming to my decision on the same I reiterate what this Court has mentioned in Es Eng Soon Holdings Sd Bhd v Golden Affinity Development Sdn Bhd [2021] 9 1 LNS 386 which adopted the principles mentioned in Abric Project Management Sdn Bhd v Palmshine Plaza Sdn Bhd [2007] 7 CLJ 516 and Shencourt Sdn Bhd (in liquidation) (in receivership) [2019] 12 MLJ 184 and where this Court held: “[66] For the record, as the Liquidator is an officer of the Court, the Applicant should have obtained leave, pursuant to the ratio in Abric Project Management Sdn Bhd (supra), where Ramly Ali J(as he then was) had held: [20] Such allegations are serious allegations directed against the liquidator personally. Accordingly, before looking at the applicable law, it is necessary to first consider, in light of the personal attacks directed at the liquidator, whether leave of court is necessary...... [23] It is the act and conduct of the liquidator in the discharge of the duties of his office, which are sought to be impeached by the applicant in this motion. The thrust of the applicant's case is that the liquidator was in breach of his duty of care owed to the first respondent in the sale of the property. [24] Therefore in reality the action proposed by the applicant against the liquidator is in respect of the performance of his official duties. The liquidator however is an officer of the court. Rule 63 of the Companies (Winding Up) Rules 1972 is clear on this point. The court will not permit its officer to be sued without investigation of the merits of the case. Thus leave of court is necessary before such an action can be commenced. InChi Liung Holdings Sdn Bhd v. Ng Pyak Yeow [1995] 4 CLJ 11; [1995] 3 MLJ 204, the Court of Appeal held that: 10 ... it is dear that a Liquidator having been appointed by the court, is an officer of the Court. It goes without saying leave of Court is needed before an action is commenced against him and officers like him." [67] Thus leave of court was necessary before such an action could be commenced and for which the Applicant did not apply for such leave. I therefore also hold on this ground that the Application must therefore fail.

I am of the view on the above issue itself, that the Summons herein will fail on this ground alone. Substantive Issues

The Applicant stated that in his submissions that he had inter alia filed the Summons for the removal of the Liquidator as the Applicant’s queries and request for information from the Liquidator was denied and/or not responded to.

The law on the removal of liquidators have been laid out succinctly by Ramly Ali J (as His Lordship then was) in Ng Yok Yee & Anor v CTI leather Sdn Bhd (Metro Brilliant Sdn Bhd & ors, intervener) [2006] 7 MLJ 28 where it was stated: “[50] For convenience, the court, set out below the relevant legal principles applicable to an application to remove a liquidator:

(a)A liquidator appointed by the court can only be removed by the court 'on cause shown' — s 232 of Companies Act 1965. 11

(b)The court does not have an unfettered discretion as 'cause must be shown'. The೦position is not the same as it is when a liquidator is first appointed and the court may choose between two or more competing candidates.

(c)The normal ground for removal is that the liquidator has a personal unfitness, has failed to act impartially or is in a position where his duty and interest are in conflict. See: o (i)In re Sir John Moore Gold Mining (1879) 12 Ch Div 325, p 331; o (ii)Advance Housing v Newcastle Classic Developments (1994) 12 ACLC 701; and o (iii)Commonwealth of Australia v O'Reilly (1984) 52 ALR

031.

(d)As to what constitutes a conflict of interest, there has to be a real and not merely theoretical possibility of conflict before a liquidator can be removed (Advanced Housing).

(e)A liquidator may act even though there has been a prior involvement with the company, provided that the involvement is unlikely to impede the liquidator from acting impartially (Advanced Housing).

(f)In Advanced Housing there was an actual conflict because the liquidator had to adjudicate on whether payments made to his firm immediately before the company went into liquidation constituted an unfair preference.

(g)It is an integral part of a liquidator's duty to investigate the affairs of the company from its foundation onwards (Commonwealth of Australia v O'Reilley). 12

(h)A liquidator who fails to investigate the affairs of the company to the prejudice of an applicant is in neglect of his duty and can be removed (see In re Sir John Moore Gold Mining Company).

(i)It cannot be a ground for removal that a liquidator is carrying out his duty to investigate the affairs of the company, even though some interested parties may object.

(j)In a case where the application for removal is by a creditor, all the creditors must be given notice of the application or it must be shown conclusively that the removal is for the benefit of all creditors (see In re White Cliffs Dredging Co (1893) 11 NZLR 711).

(k)A liquidator is not bound to pursue a claim on behalf of the company, unless he believes that it has a reasonable prospect of success (see In re George A Bond and Company Ltd (1932) SR (NSW) 301).

(l)Where there are no assets which can be imperiled by the continuance in office, fair play to the liquidator may be the decisive factor (see In re George Bond).

(m)Fair play to the liquidator is not to be left out of sight. (Chua Boon Chin v JM೦McCormack & Ors [1979] 2 MLJ 156 at p 158).

(n)In Adam Eyton Limited; Ex parte Charlesworth (1887) 36 Ch Div 299, the೦applicant for removal of liquidator was required to give an undertaking to pay all costs and expenses of the liquidator on solicitor and client basis. [51] Based on the principles above, it is clear that in the present case there is no cause shown by the applicant warranting the removal of the liquidator. 13 [52] What this court must also take into account is the fact that the liquidator is in his final stages of his liquidation with the real property recently sold. This is a relevant factor to be considered (see Chua Boon Chin v JM McCormack & Ors).”

I do not find that the failure of the Liquidator to respond or the denial thereto of the Applicant’s queries and request for information is sufficient grounds to remove a liquidator, more so based on the legal principles set out in Ng Yok Yee & Anor (supra).

It is also clear from the facts before me as seen in Enclosure 69 that the Applicant does not speak for the general benefit of the creditors of the Respondent company as the Applicant is only a minority creditor of RM48,424 being only a very miniscule percentage of the total debts of the Respondent of RM85,436,084.70 based on the current admitted POD’s and the Form 75 dated 5.3.2021. This Court has further noted that there are also no creditors of the Respondent company who have supported the Summons herein.

It is the duty of this Court to ensure that the liquidation proceedings are not wrongly impeded, to which this Court echoes the sentiment in Abric Project Management Sdn Bhd (supra) and in doing so this Court had to consider the contentions of the Applicant on amongst others the following issues:- a. the alleged impropriety in the sale of Assets of KFI b. whether the Liquidator had only provided limited information as to the sale of Respondent’s assets 14 c. the failure to convene a physical creditors meeting to deliberate the sale of the Respondent’s assets d. the Liquidator had only relied on the draft valuation reports for PLO 233 and PLO 308 e. there has been a non valuation of certain assets of the Respondent f. the sale of PLO 38 by KCSB as compared to the sale of shares of Khee San Sdn Bhd (KCSB) would yield better prospects g. a lack of details in the Information Memorandum and that the imposition of 10% earnest deposit had discouraged and/or suppressed the participation of more bidders

From the averments of the Liquidator in his affidavit at Enclosure 7 and the evidence before this Court, of which I have examined inter alia in enclosure 8, I have observed that the sale of Assets of the Respondent shows the following facts:- a) the Liquidator received a letter dated 12.2.2020 from LSP proposing that the assets of the Respondent company and LBB be sold together given the complimentary nature of both businesses at exhibit LSF 7 in Enclosure 8; b) a sale by private tender was proposed with LSP after having identified several parties that maybe interested with the proposed acquisitions; c) the Liquidator agreed to participate in the joint tender noting that higher valuations and more interest from investors may be realized if assets and business of the Respondent were sold together as shown in the letter marked as exhibit LSF 8 in Enclosure 8; 15 d) the highest offer received was RM17.2 million from Guan Chong Berhad (GCB) as shown in the letter dated 12.3.2020 from GCB marked as exhibit LSF 9 in enclosure 8 with 3 other offers in the sum of RM99,000, RM2 million and RM12 million respectively; e) the joint sale of these assets fell thorough as LBB’s liquidator then decided to accept an offer from a party that sought only to acquire the assets of LBB; f) in May 2020, the Liquidator received indicative values of PLO 233 and PLO 308 from Messrs CH Williams Talhar & Wong that assessed the market value of each land at RM6.5 million as exhibited in 2 separate reports both dated 5.5.2020 respectively found in exhibit LSF 10 in Enclosure 8; g) subsequent thereto, the Liquidator carried out a public tender exercise for the sale of the Respondent’s assets of which only 2 valid offers were made based on the terms and conditions outlined in the Information Memorandum of which the highest offer was RM18.5 million from GCB as per the documents in exhibits LSK 11 to LSK 15 of enclosure 8; h) the Liquidator had also taken steps to seek the views of approved creditors on the sale and issued a letter dated 8.7.2020 to the 52 approved creditors, as seen in exhibit LSF 16 in Enclosure 8, and of which 28 creditors including the Applicant responded and 26 creditors thereof had approved the sale as can be found in exhibit LSK 17 of Enclosure 8 which represented 99% of the total debt value of the creditors who responded; i) only 2 creditors including the Applicant had disapproved of the sale as seen in exhibit LSK 18 of Enclosure 8 which tantamounted to only 0.05% of the total approved debt value at the material time; 16 j) the Liquidator contends that he had acted only after careful consideration of the market conditions, financial capability, diminishing value of the machineries and the economic uncertainty due to the Covid 19 pandemic.

Based on the totality of the above evidence, I find that the Liquidator had acted based on the option which was most viable to him especially when there was a resounding majority of the creditors who had approved the sale to GCB. Another factor which this Court had also taken into consideration was that the Liquidator had to achieve an expeditious realization of Respondent’s assets for the benefit of the creditors which led to a first interim dividend of RM7,921,504.28 being paid to the creditors on 19.3.2021 as seen in enclosure 27. Following from the same, I hold that the Applicant’s contention of the alleged impropriety in the sale of assets of the Respondent is totally misconceived. As is the norm, it is always easier to raise criticism and raise issues from the outside without having personal knowledge of the facts and the chronology of events which had transpired, as is the case with the Applicant here.

As to the Applicant’s contention that the Liquidator had only provided limited information as to the sale of Respondent’s assets, I hold that the same as being untenable. I have found from the facts before me that:- a. there was sufficient information as to the sale of KFI’s assets through the Information Memorandum as there were no queries or further information requested by any of the interested parties who had received the said Information 17 Memorandum which is evidence that the information therein was sufficient, and b. the Applicant had requested via a letter dated 20.7.2020 information from the Liquidator which the Liquidator had been previously provided for in his letter of 8.7.2020

I further agree with the Liquidator that the identities of the bidders during the private tender is confidential in nature and need not be disclosed so as to prevent any abuse of the process.

With regards the issue of the failure to convene a physical creditors meeting to deliberate the sale of the Respondent’s assets, I hold that this is not a requirement under the law and the Applicant has failed to provide any proof to this Court that such a legal requirement exists. In any event, this Court takes judicial notice of the Covid 19 pandemic which was still raging during that period and find that it was reasonable in the circumstances not to hold a physical meeting.

I find that the exercise of seeking the creditors agreement to the sale via the Liquidator’s letter dated 8.7.2020 to the 52 approved creditors, as seen in exhibit LSF 16 in Enclosure 8 as being made purely out of prudence only and was in fact not necessary. It is also clear that the said letter had given the Respondent’s said creditors up to 22.7.2020 to respond and raise any queries but this was not done by the Applicant.

Further to the above, since 99% of the Respondent’s creditors had responded positively to the said sale, there was therefore no necessity to call for a physical meeting to deliberate the sale of the 18 said assets and which would in my view be an exercise in futility as well as a waste a time, expenses and costs.

I now turn to the Respondent’s contention that the Liquidator had only relied on the draft valuation reports for PLO 233 and PLO 308. After careful consideration, I find that the Liquidator’s explanation to the same as being perfectly reasonable taking into account the facts of the matter before this Court and which explanation by the Liquidator are as follows:

27.1 that LSP had prior to the Liquidator’s appointment, arranged for the valuer, Messrs CH Williams Talhar & Wong to conduct a valuation of the assets of the Respondent as the Respondent was a subsidiary of LBB, and thus when the Liquidator was appointed he sought for the said Valuers to continue with the valuation of the assets; and 27.2 the Liquidator had prior knowledge of the market value of the said assets from the bids received in the private tender exercise

I also rely on the authority of Malayan Banking Bhd v Lim Poh Hooi [1997] 2 CLJ 516 wherein the Court of Appeal held that: “The true commercial value of a property is not what an valuer thinks it should be, but the actual price that property will fetch when it is put up for sale in the open market.” 19

I further do not find that the methodology adopted by the said Valuers has resulted in a lower valuation and there is no documentary evidence either in a form of another opposing valuation report and/or any other document presented by the Applicant before this Court to contradict the said methodology adopted. I therefore hold that the said contention is therefore an assumption and/or an unsupported bare averment which carries no evidential weight whatsoever.

There is also the Respondent’s contention that there has been a non valuation of certain assets of the Respondent. I hold that these are, based on the facts of the matter before me, not necessary as this is a decision of and within the discretion of the Liquidator who had allowed market forces to dictate the realiasable assets of the Respondent and that such actions were not only bona fide but which I find a reasonable Liquidator would have so acted in such a circumstance. I am guided by and rely on Andrew Christopher Chuah Choong Eng Chuan v Ooi Woon Chee & Anor [2007] 2 MLJ 12; [2007] 2 CLJ 405 where the Court of Appeal held that: “The court will not interfere with the decision simply because its opinion might differ from that of the liquidator. Generally, the court will recognize that the discretion has been vested by statute in the liquidator and will not interfere unless it is shown that he did not address himself to the correct questions or has made errors of law, or has not exercised his discretion bona fide or has acted in a way which no reasonable liquidator would have acted, or has taken into account entirely irrelevant considerations or when there is fraud.”. 20

Next, it was submitted by the Respondent that the sale of PLO 38 by KCSB as compared to the sale of shares of Khee San Sdn Bhd (KCSB) would yield better prospects with respect, I find such comparison as being misconceived. I again hold that this is purely a business decision of the Liquidator for which this Court would not interfere as there was no error of law nor had the Liquidator acted unreasonably.

As to the Applicant’s contention that the imposition of 10% earnest deposit had discouraged and/or suppressed the participation of more bidders, I find this as being a non starter as I hold that the imposition of 10% earnest deposit as being reasonable and proper as it would ensure that the bidders have sufficient financial means to complete the transaction.

With regards the applicant’s submission that there was a deviation from the terms in the Information Memorandum that the sale and purchase agreement was to be executed within 1 month from the notification date and thus the earnest deposit should be forfeited; I find that the actions of the Liquidator in granting a slight delay in executing the sale and purchase agreement as being reasonable. To forfeit the deposit would mean that the Liquidator would have to embark once again on seeking a new buyer for the said assets which would only prolong the liquidation process and that the action of the Liquidator therein did not prejudice the creditors of the Respondent in any way.

I now turn to the Applicant’s submission that there was no effort made by the Liquidator to secure higher bids. As to this, I hold that the 21 Liquidators knowledge of the prior intended bids and the Valuation Report had indicated the true market value of the assets which was to be sold and that in the circumstances it was not necessary for the Liquidator to seek other bidders.

There are before this Court further grounds which have been raised by the Applicant concerning (i) the outsourcing of the liquidation and

I accept and agree with the Respondent’s learned counsel that the alleged outsourcing of the liquidation has no basis as the Liquidator has explained in his Affidavit in enclosure 7 inter alia that;

36.1 the Liquidator remains in charge and is completely responsible for the liquidation process

36.2 there is no issue of any unathorised disclosure of the Respondent’s information to any third parties

36.3. the Liquidator is from HC Advisory Sdn Bhd and that this was made known to the Court at the time of the Petition to Wind Up the Respondent. The officers in his office are part of his team who are assisting in the liquidation of the Respondent

36.4 the Liquidator is also a qualified accountant and the sole proprietor of LSK & Co 22

Again, I must stress here that the aforesaid allegation by the Applicant is entirely baseless and a mere conjuncture. The Applicant has once again attempted to cast aspersions on the Liquidator without any concrete evidence. It is perfectly common, and I take judicial notice that it is the industry practice for a Liquidator to have officers and/or a team of people to efficiently assist him in the administrative aspects of the liquidation of a company.

The issue of one Dato Raveendra from HC Advisory Sdn Bhd as the ‘authorised representative’ of the Liquidator and signing letters on behalf of the Liquidator in that capacity are not in my opinion any indication or evidence that the Liquidator has taken over the driving seat of the liquidation or that the Liquidator completely outsourced his duties as a liquidator of the Respondent. Authority for this can be found in Wiraflor (Malaysia) Sdn Bhd v Bio Science Capital Sdn Bhd [2011] MLJU 514 where Nallini Pathmanathan J (as Her Ladyship then was) had held: “Moving on to the second complaint, the two sets of creditors complain that the Liquidator, who is a partner in the accounting firm of Moore Stephens has delegated his duties wholesale to another accounting firm called Mustapharaj. The basis for this contention is that the Liquidator has left many matters to one Bridget D' Cruz who is an employee of Mustapharaj. To this end they point to a few documents, namely a letter dated 14 July 2010 from the Liquidator to one of the directors requesting him to submit the statement of affairs and hand over all books and records of the Respondent that were handed over to him by the Receiver and Manager on 15 June

This letter was signed by Bridget D' Cruz on the Liquidator's 23 behalf; Secondly the envelope utilised to post this letter was from the accounting firm of Mustapharaj. Thirdly with regards to the request for a deferment of delivery of documents by the directors pending an application for a stay of the appointment of the Provisional Liquidator, the reply from the then Provisional Liquidator was also from the same Bridget D' Cruz signing on behalf of the Liquidator and was faxed from the office of Mustapharaj. Bridget D'Cruz is a clerical or administrative employee of Mustapharaj seconded to work for the Liquidator over a particular period namely July 2010. The Liquidator contends that he did not want any delay in the progress of this liquidation and hence sought assistance from this assistant which he is empowered to do under section 236(2) as of right under the Companies Act. I am unable to conclude from the foregoing documents that the Liquidator has either delegated his duties wholesale to the said employee of Mustapharaj or that the Liquidator has thereby failed to give consideration or thought to the liquidation process vis a vis the Respondent. The fact that there are a number of letters signed by an assistant on behalf of the Liquidator does not mean that the Liquidator did not direct his mind to the liquidation process.”

I, in fact find no evidence before me that the Liquidator has completely outsourced his duties as a liquidator of the Respondent to HC Advisory Sdn Bhd and I hold that there is nothing in law to prevent such assistance in the form of a team of people as aforesaid. It is only where the Liquidator has acted in a clear manner that he has 24 completely outsourced the liquidation that the said Liquidator can be said to have been in dereliction of his duties and acted unreasonably.

In this respect I would like to refer to the Court of Appeal case of Goh Siew Koon Goh Siew Koon @ Eng Sing Kuan & Ors v Lim Jit Kim @ Lim Tian Jee & Ors [2015] MLJU 2229 which was referred to me by counsel for the Applicant wherein the Liquidator therein, one Mr Lim Aik (Mr LA) had without the knowledge, consent or sanction of the Court, committee of inspection, contributories or creditors, unilaterally appointed PricewaterhouseCoopers Advisory Services Sdn Bhd (“Pricewaterhouse”) to assist him in the liquidation of the company. In that case the Court of Appeal rightly held that: “[43] It is obvious that the appointment of Pricewaterhouse was not “to appoint an agent to do any business which the liquidator is unable to do himself” within the meaning of Section 236(2)(i) of the Companies Act 1965. It was also not merely to assist Mr LA in his ordinary administrative and management duties that are within his ordinary professional competence: Wong Sin Fan & Ors (supra). Mr Lim Aik had in effect abrogated the powers granted to him by the Court, thus rendering his position superfluous and untenable.”

It is quite apparent from a reading of Goh Siew Koon Goh Siew Koon @ Eng Sing Kuan & Ors (supra) that the facts therein were quite dissimilar from the facts in the matter before this Court. Here, in the case before me there was no wholesale appointment of another firm by the Liquidator herein which would in any way be described as 25 that in the former case which would lead to the Liquidator’s position herein being either superfluous or untenable.

I have also considered the various Australian cases of Re Timberland and Equitable Forestry Services Pty Ltd (1979) 4 ACLR 259, Ah Toy v Registrar of Companies (NT) [1986] 72 ALR 107 , Re Bridal Centre Co Pty Ltd and The Companies Ordinance 1962 (1985) 59 ACTR 1, Day & Dent Constructions Pty Ltd (In Liq) v ABOA Registrar of Companies (1984) 32 NTR 13, Australia Securities & Investments Commission v Robert John Edge (2007) VSC 170 in my decision herein and at the sake of repetition, the persons complained off herein by the Applicant are merely members of the Liquidator’s team who assisted the Liquidator and they were, from the facts, not a totally different outfit who were appointed by the Liquidator to do all of the said Liquidator’s functions in any way whatsoever or the business which the Liquidator was unable to do himself.

I also hold that any association of the Liquidator, who is a qualified accountant and as the sole proprietor of LSK & Co, has no relevance to the matter at hand and that there is no specific evidence of any wrongdoing or inappropriateness which has been shown by the Applicant as to this fact apart from stating that the Liquidators relationship with LSK & Co amongst others is ‘a confusing one’.

As regards the allegations concerning Rimbun Corporate Advisory Sdn Bhd (Rimbun) which shares the same contact details with HC Advisory Sdn Bhd, I find that apart from that fact, no other credible evidence was shown to this Court on the purported allegation that 26 Rimbun had taken part in the liquidation and that there is nothing questionable about the same. I further hold the fact that Rimbun had advanced a sum of RM100,000 to LBB as being unconnected to the liquidation before me and that accordingly the Liquidator was thus not duty bound to disclose this fact.

I will now deal with the allegation that the Respondent has failed to submit a preliminary report pursuant to Section 485 of the Companies Act 2016. The said section provides:

(a) as to the amount of capital issued, subscribed and paid up and the estimated amount of assets and liabilities;

(b) if the company has failed, as to the causes of the failure; and

(c) whether in his opinion further inquiry is desirable as to any matter relating to the promotion, formation or failure of the company or the conduct of the business thereof.

I hold that such a failure to submit a preliminary report pursuant to Section 485 is not a ground for removing the Liquidator as:

(i) the said section does not impose or mandate a specific time save that it mentions or provides that it should be done as soon as practicable 27

In an Australian case, Re Goonal Pty Ltd (in Liq) (1977) 3 ACLR 408, of which decision I adopt, it was held that: “Another allegation is that he has not submitted a preliminary report under s 235(1) to the court “as soon as possible after receipt of the statement of affairs”. It is hard to see how at this stage he could report usefully on “the estimated amount of assets and liabilities” in view of the contradictory statements furnished to him and the financial restrictions to which he had been subjected. I think that Mr Strahan was right in his submission that there has been no breach of (1977) 3 ACLR 408 at 416s 325(1). .. In any event it is not enough for the applicant to prove a breach of a requirement of the Act to show cause for removal of the liquidator. It must also appear that his removal would be in the interest of the winding up. Provision exists under s 278(1) for a contributory to complain to the court that the liquidator has not observed prescribed requirements, and the court may take such 28 action as it thinks fit. This discretion is inconsistent with a contention that if the liquidator does not observe a prescribed requirement he must be removed. Whatever the court may do on an application under s 278(1), I am not satisfied that in the circumstances of this case, the liquidator's breach of s 237(2) or s 234(3 b) establishes that his removal is in the interests of the winding up.”

I further hold that any such breach by the Liquidator of section 485 of the Companies Act 2016, if any, is a mere technical breach which is not a cause for the removal of the Liquidator see TR Hamzah & Yeang Sdn Bhd v City Centre Sdn Bhd [2012] 1 MLJ 383 where the Court held that:- “…statutory breach per se is not a ground unless it is contumelious in nature and or has prejudiced the liquidation process”

I further hold in the matter before me, that there is no evidence before this Court that the other creditors of the Respondent have been notified of the Summons herein and that in Jagdis Singh Banta Singh & anor v Return 2 Green Sdn Bhd [2021] 3 CLJ 355 the Court of Appeal had upheld that: “..all creditors must be notified of the application and that the removal of the liquidator must be for the benefit of all creditors.”

I also note that in the matter before me, that all assets of the Respondent have been sold and/or realized and that the same is 29 ready for distribution save for the Ad Interim Injunction which is in place which was applied for by the Applicant.

I therefore based on my findings on all of the above issues hold that the basis for removal of the Liquidator has not been proven to the satisfaction of this Court and that any removal of the Liquidator will serve no purpose at this stage.

I hereby dismiss the Summons in enclosure 1 with costs. Dated: 24th day of June 2022 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE KUALA LUMPUR HIGH COURT Parties: Tan Eng Keat and Yap Bing Yew for the Applicant [Messrs Gan, Lee & Tan] Harvinderjit Singh a/l Manjit Singh and Alicia Goh Ai Chen for the Liquidator / Respondent [Messrs Varun & Goh]