Tang Kian Khuang for the Respondent v Lau Kee Sern and Cynthia Liaw Tze Feng for the Petitioner (COMPANIES WINDING UP NO. WA-28NCC-249-04/2021)

By enclosure 1 herein, the Petitioner has filed a Winding Up Petition dated 12.4.2021 pursuant to section 465(1)(h) of the Companies Act 2016 to wind up the Respondent company (Respondent).

The Petition states that: a) The principal object of which the Respondent was established is to carry on the business as an investment company promoting investment projects in Vietnam. b) In 1994, the Respondent secured a project from People’s Committee of Ho Chi Minh City to construct, complete, manage, operate and maintain a water treatment plant at Binh An Hill in the Song Be Province, Vietnam together with certain “Water Supply Facilities” on the Build-Operate-Transfer basis (“the Water Project”) under a Build Operate-Transfer Contract dated 12.8.1994 (“BOT Contract”) entered between the Respondent, Emas Utilities Corporation Sdn Bhd (“Emas”) and People’s Committee of Ho Chi Minh City. c) It was agreed under the BOT Contract, inter alia, that:

the Respondent and Emas shall incorporate a “BOT Company” knows as Binh An Water Corporation Ltd (“BAWC”) in Vietnam and invest a sum of USD30,000,000.00 in BAWC to undertake the development of the Project; 3

(ii) upon the incorporation and registration of BAWC, the Respondent and Emas shall assign and transfer to BAWC all rights, benefits, duties, obligations and responsibilities under the BOT Contract;

(iii) at the expiry of the terms of the BOT Contract, the Respondent and Emas shall cause the transfer of the Water Supply Facilities to People’s Committee of Ho Chi Minh City or its nominated party for a consideration of USD 1; and

(iv) no later than 12 months before the expiry of the term of the BOT contract, BAWC shall set up a liquidation board to prepare the transfer of the Water Supply Facilities; d) The BOT Contract was later amended by a “Supplementary Contract to BOT Contract” dated 19.1.1995 and a “Supplementary contract (No. 2) to BOT Contract” dated 27.8.1996. (These contracts shall hereafter collectively be referred to as “the BOT Contracts”). e)

It is submitted by the Petitioner that he is a prestigious business man in Vietnam and had founded a group of companies named after Sadec, where the Petitioner was born and bred, which consisted of Sadec Fashion Proprietary Limited, Sadec Import & Export (S) Pte Ltd, Sadec Import & Export Corporation Pty Ltd (Sadec I & E) and Sadec Investment Pty Ltd.

The Petitioner states that: a) he had in or around 1991 informed one Mohamed Ali bin Mohamed Salim (Ali) that the People’s Committee of Ho Chi Minh City were looking for foreign investment in the Water Project where it was agreed that the Petitioner and Ali would secure investors from Malaysia and the Petitioner would deal with the relevant authorities in Vietnam to procure, undertake and implement the Water Project; b) the Respondent was then incorporated on 3.2.1992 and carries with it a goodwill and reputation derived from Sadec and the Petitioner’s group of companies; c) at the material time as part of the agreement and due to the trust and confidence the Petitioner had with Ali, Ali and one Dato Dr Nik Hussain bin Abdul Rahman became the initial subscribers of the Respondent’s shares and it was agreed that the Respondent would issue more shares thereafter where the 5 Petitioner or his company would become a shareholder of the Respondent; d) in a Joint Venture Agreement dated 23.4.1992 (JVA) it was expressly acknowledged and agreed by the Petitioner through his company Sadec I&E and Ali through his company, Seven-M Management Services Sdn Bhd, that the Respondent was inter alia incorporated to “invest in various suitable projects in the Territory” (Vietnam); e) the Respondent’s current shareholding consist of the Petitioner who holds 1,225,000 shares (49%) and Global Sanctuary Sdn Bhd (Global Sanctuary) who holds 1,275,000 shares (51%); f) Global Sanctuary is owned by Ali and his wife, Noir Jhan binti Abdul Majeed.

It was contended by the Petitioner that through his efforts, the Respondent had dealt and negotiated with People’s Committee of Ho Chi Minh City in the procurement, undertaking and implementation of the Water Project and that the day the JVA was executed i.e 23.4.1992, a Memorandum of Understanding (MoU) with the Ho Chi Minh City Water Supply Company was signed wherein it was agreed that the parties therein would inter alia cooperate in the conduct of a feasibility study and undertake the construction and operation of the Water Project.

The Petitioner then submits that inter alia:- 6 a) on 13.5.1992. the Respondent and Ho Chi Minh City Water Supply Company executed an Economic Cooperation Contract to regulate and manage the implementation of the Water Project; b) on 6.10.1992 the Respondent executed an Investment Promotion Contract (Investment Promotion Contract) with Emas where the latter agreed to “provide such assistance (not limited to finance) as maybe necessary in bringing to fruition the implementation of the Water Project”; c) on 28.7.1993, the Ho Chi Minh City Water Supply Company, the Respondent and Emas Utilities Corporation Sdn Bhd executed a Joint Venture Contract (JVC) to incorporate Binh An Water Corporation Ltd for the sole purpose of undertaking and implementing the Water Project; d) as a result of the above Kumpulan Emas novated all its rights and liabilities under the Investment Promotion Contract to Emas Utilities Corporation Sdn Bhd; e) on 8.10.1993, the Respondent issued 2,730 Series A Redeemable Preference Shares to Emas Utilities Corporation Sdn Bhd in consideration of RM4,291,560; f) thereafter the Ho Chi Minh City Water Supply Company, the Respondent and Emas Utilities Corporation Sdn Bhd agreed to vary the overall approach in the implementation of the Water Project and the JVC was rescinded with the Water 7 Project being turned into a BOT Project and the People’s Committee became a necessary party to the Water Project; g) on 12.8.1994, the People’s Committee of Ho Chi Minh City, the Respondent and Emas Utilities Corporation Sdn Bhd executed a BOT Contract to inter alia incorporate Binh An Water Corporation Ltd as the sole party responsible for the development and implementation of the Water Project; h) the BOT Contract was later varied by a Supplementary Contract to BOT Contract dated 19.1.1995 and a Supplementary Contract (no.2) to BOT Contract dated 27.8.1996 (BOT Contracts) was agreed and wherein inter alia at the expiry of the BOT Contracts, the Respondent and Emas Utilities Corporation Sdn Bhd shall cause a transfer of the water supply facilities of the Water Project to the People’s Committee of Ho Chi Minh City or its nominated party for the consideration of USD1.

It is further submitted by the Petitioner that upon expiry of the BOT Contracts, a) Binh An Water Company Ltd ceased operation and commenced its liquidation process on 31.7.2019 and on 15.7.2020 the People’s Committee of Ho Chi Minh City paid USD1 to Binh An Water Company Ltd in consideration of the water supply facilities pursuant to the BOT Contracts; 8 b) attempts have been made by the Petitioner and Ali to extend the BOT Contracts and take over the operations of Binh An Water Company Ltd but the same was not successful; c) the involvement of the Respondent in the Water Project has come to an end.

The Petitioner also contends that: a) since its incorporation, the Respondent’s only investments were made in Vietnam and the Water Project is the only project ever carried out by the Respondent; b) the Respondent’s investment in Vietnam Export-Import Commercial Joint Stock Bank and Lion Vietnam Joint Stock Company has been disposed of since 31.12.2015; c) he is no longer willing and could not assist the Company in procuring any further investment in Vietnam as Mohamed Ali has caused the Petitioner to be removed as a director of the Company since 3.8.2020; d) the Respondent Company’s resistance to the Petition is not bona fide-i. even though both the shareholders had agreed to wind up the Company, Mohamed Ali had been proposing and insisting that such liquidation should only be commenced after the final distribution of fund is received from Binh An Water Company Limited; 9 ii. the Petitioner could not agree with Mohamed Ali’s proposal because he had been removed and is no longer a director of the Company and any dealing with or distribution of the assets of the Company could only be managed or dealt with fairly and justly by a professional liquidator appointed over the Company; iii. in order to expedite the liquidation of the Company, the Petitioner had in good faith acceded to Mohamed Ali’s proposal for a conditional appointment of liquidator on the following basis (Enclosure 1, page 214):

a conditional resolution shall be signed immediately by the shareholders, and prior to the monies having been received by SMC (the Company) from BAWC (Binh An Water Company Limited), which resolution will approve the MVL and the appointment of the liquidator within one (1) week from the receipt of the monies from BAWC (“BAWC Receipt”); and

the board resolution must also set out the agreement of the directors of SMC (the Company) not to utilize BAWC Receipt for any payments of expenses and costs from the date of receipt till the date of appointment of liquidator, other than payment of fees for the appointment of the liquidator. 10 iv. Despite the above, Mohamed Ali had on 31.3.2021 informed the Petitioner that he could not agree to the Petitioner’s aforesaid terms on the flimsy ground that the shareholder of Binh An Water Company Limited would be meeting on the next day (Enclosure 1, page 213). It was later discovered that Mohamed Ali was in fact planning to remove the Petitioner as a director of Binh An Water Company Limited on the ground that he did not execute a resolution authorizing Binh An Water Company Limited to release the remaining capital to its shareholders pending their discussion and agreement on the liquidation of the Company (Enclosure 16, pages 534-535); and v. Given that the Petitioner has agreed to the conditional appointment of liquidator as proposed by Mohamed Ali, there is no valid ground for the Company to resist the winding up petition herein.

The Respondent submits that it was set up 921 days before the Water Project and that the Petitioner had failed to disclose various other investment promotion that the Respondent has undertaken.

It is further submitted by the Respondent that it was earning income even before the Water Project was secured and there has been no issue of failure of substratum of the company. 11

The Respondent refutes the Petitioner’s stand and states that the core business of the Respondent is very broad and not at all limited to the implementation of the Water Project.

The Respondent further submits that: a) todate it has promoted over 40 investment opportunities in Vietnam and list amongst the same being No Activity Date 1 Investment Promotion Contract with Galada Continuous Castings Ltd of India (“Galada”) relating to the manufacturing of aluminum and aluminum alloy conductors 6.6.1992 2 Investment promotion Contract with Kumpulan Emas Bhd (“KEB”) relating to three water supply projects under discussion with

6.

10.1992 3 Made a USD800,000 investment in Vietnam Export-Import Commercial Joint-Stock Bank (“Exim Bank JSC”), represented by 8,0020 shares in Exim Bank JSC 2013 4 The Respondent also and a USD150,000 investment in Lion Vietnam Joint-Stock Company (“Lion Vietnam”), represented by 285,000 shares in Lion Vietnam 2010 b) the above negates the Petitioner’s contention that the Respondent would not be incorporated but for the Water Project; 12 c) the Respondent also maintains a secretariat in Malaysia and Vietnam; d) it has not changed its business course during its 29 years of operating history nor has it cased its business; e) it has not received any notice of a manifest agreement by its members for the voluntary winding up of the Respondent nor any requisition for the same; f) at a meeting held on 1.1.2021, between the Malaysian members of Binh An Water Company Limited and the Respondent, they were informed of the Petitioner’s continued reluctance to perform his function as a member of BA and the formalities for his replacement being initiated in Vietnam; g) the Petition was filed in response to the Respondent’s assent to replace the Petitioner in Binh An Water Company Limited and to aver proceedings against him in Vietnam by Binh An Water Company Limited; h) the Respondent’s current investment is in Binh An Water Company Limited and that it is this Company which now holds the Investment Licence and not Binh An Water Corporation Limited or Binh An Water Corporation Co Limited (BAWCCL) Finding’s of the Court 13

It is pertinent to note that the Petition is based on Section 465(1) (h) of the Companies Act 2016 which provides:-

The Court may order the winding up if:

the Court is of the opinion that it is just and equitable that the company be wound up;

In the case of Ebrahimi v Westbourne Galleries Ltd & Ors [1973] AC 360, which has since been adopted by the Malaysian Courts, Lord Wilberforce observed: “The foundation of it all lies in the words 'just and equitable' and, if there is any respect in which some of the cases may be open to criticism, it is that the courts may sometimes have been too timorous in giving them full force. The words are a recognition of the fact that a limited company is more than a mere legal entity, with a personality in law of its own: that there is room in company law recognition of the fact that behind it, or amongst it, there are individuals, with rights, expectations and obligations inter se which are not necessarily submerged in the company structure. That structure is defined by the Companies Act and by the articles of association by which shareholders agree to be bound. In most companies and in most context, this definition is sufficient and exhaustive, equally so whether the company is large or small. The 'just and equitable' provision does not, as the respondents suggest, entitle one party to disregard the obligation he assumes by entering a company, nor the court to dispense him from it. It does, as equity always does, enable the court to subject the exercise of legal rights to equitable considerations; considerations, that is of a personal character arising between one individual and another which may make it unjust, or inequitable, to insist on legal rights or to exercise them in a particular way.” 14

Premised on the above, I have viewed the Suruhanjaya Syarikat Malaysia (SSM) search report dated 9.4.2021 at exhibit PBH-1 of enclosure 1 which confirms that the Respondent was incorporated on 3.2.1992 and wherein states that the nature of the business of the Respondent as a promoter of investment and international trade, as well as exhibit PBH-3 in enclosure 1 which is the Memorandum and Articles of Association of the Respondent where the objects of the Respondent are stated to inter alia be “To carry on the business as an investment company promoting investment projects in

From the above, this Court thus agree with the Respondent’s counsel that the core business of the Respondent is very broad and not at all limited to the implementation of the Water Project.

This Court has further perused the JVA dated 23.4.1992 at enclosure 16 exhibit MAS-4 and note that the said JVA was:- a) entered into by 4 parties being the Malaysian-Thai Development Sdn Bhd, Seven-M Management Services Sdn Bhd, Vietnam Export-Import Bank and Sadec I&E; b) as stated in the recital therein, the parties were “desirous of establishing a consortium to invest in various suitable projects in the Territory…and for this purpose...have agreed to establish a limited liability company with the necessary licences” and that “the principal objects of the Company will be to engage in the business of (i)investment holding (ii) forex 15 clearing house facilitation (iii) investment promotion and (iv) forum facilitation”.

This Court has also viewed at enclosure 16 the following documents:- a) MoU with the Ho Chi Minh City Water Supply Company which was signed with the Respondent wherein it was agreed amongst others that the parties therein would inter alia cooperate in the conduct of a feasibility study and undertake the construction and operation of the Water Project; b) the Economic Cooperation Contract dated 13.5.1992 between the Respondent and Ho Chi Minh City Water Supply Company to regulate and manage the implementation of the Water Project; c) the Investment Promotion Contract dated 6.10.1992 with Kumpulan Emas where the latter agreed to ‘provide such assistance (not limited to finance) as maybe necessary in bringing to fruition the implementation of the Projects (Water Project); d) the Joint Venture Contract (JVC) dated 28.7.1993 between the Ho Chi Minh City Water Supply Company, the Respondent and Emas Utilities Corporation Sdn Bhd to incorporate Binh An Water Corporation Ltd for the sole purpose of undertaking and implementing the Water Project; 16 e) Novation Agreement dated 8.10.1993 between the Respondent, Kumpulan Emas and Emas Utilities Corporation Sdn Bhd wherein Kumpulan Emas novated all its rights and liabilities under the Investment Promotion Contract to Emas Utilities Corporation Sdn Bhd; f) the Subscription Agreement dated 8.10.1993 between the Respondent, and Emas Utilities Corporation Sdn Bhd, wherein the Respondent issued 2,730 Series A Redeemable Preference Shares to Emas Utilities Corporation Sdn Bhd in consideration of RM4,291,560; g) the Rescission Agreement dated 12.8.1994 between the Ho Chi Minh City Water Supply Company, the Respondent and Emas Utilities Corporation Sdn Bhd whereby the parties thereto agreed to vary the overall approach in the implementation of the Water Project and the JVC was rescinded with the Water Project being turned into a BOT Project and the People’s Committee became a party to the Water Project.

It is also to be seen:

at enclosure 1, the BOT Contract dated 12.8.1994, between the People’s Committee of Ho Chi Minh City, the Respondent and Emas Utilities Corporation Sdn Bhd executed to inter alia incorporate Binh An Water Corporation Ltd as the sole party responsible for the development and implementation of the Water Project; 17

at enclosure 1, the Supplementary Contract to BOT Contract dated 19.1.1995 whereby the BOT Contract was modified and amplified and a Supplementary Contract (no.2) to BOT Contract dated 27.8.1996 (BOT Contracts) was agreed and wherein inter alia at the expiry of the BOT Contracts , the Respondent and Emas Utilities Corporation Sdn Bhd shall cause a transfer of the water supply facilities of the Water Project to the People’s Committee of Ho Chi Minh City or its nominated party for the consideration of USD1. The reference to the BOT Company herein was however Binh An Water Corporation Co Ltd instead of Binh An Water Corporation Ltd.

The evidence before this Court further shows that Binh An Water Corporation Ltd was incorporated on 15.3.1995 pursuant to the BOT Contracts and Binh An Water Company Limited was incorporated on 30.6.2008 to assume all the benefits and obligations under the BOT Contracts.

It is also in evidence herein that Binh An Water Company Ltd ceased operation and commenced its liquidation process on 31.7.2019 and on 15.7.2020 as seen in the Financial Statements of the said company in enclosure 16 and that the People’s Committee of Ho Chi Minh City paid USD1 to Binh An Water Company Ltd purportedly in consideration of the water supply facilities pursuant to the BOT Contracts as per exhibit PBH-11 of enclosure 17.

It can also be seen in evidence that the said Binh An Water Company Ltd had then closed its bank account and repatriated the 18 remaining balance capital fund to the investors i.e the Respondent and Emas Utilities Corporation Sdn Bhd as shown in the directors’ resolution of Binh An Water Company Ltd dated 5.1.2021 in exhibit PBH 12 of enclosure 17.

This Court has also noted that the Respondent’s investment in Vietnam Export-Import Commercial Joint Stock Bank and Lion Vietnam Joint Stock Company has been disposed of since 31.12.2015 as can be seen from the following documents in enclosure 17:

a letter dated 27.2.2013 from the Respondent to the Petitioner;

a letter dated 31.12.2014 from the Respondent to Sadec

the Share Sale and Purchase Agreement dated 26.7.2014 between the Respondent, Lion Vietnam Joint Stock Company and Reike-Lamons Nederland Holdings B.V for the purchase of shares in Lion Vietnam Joint Stock Company

The documents before this Court at exhibit MAS-2 in enclosure 16 in particular the Financial Statement for the year ended 31.12.2018 for Binh An Water Company Limited further show that the Investment Licence No. 1170-GP is held by Binh An Water Company Limited and not Binh An Water Corporation Limited or Binh An Water Corporation Co Limited. 19

Apart from the above, it is also before this Court that the Respondent had been involved in various other projects as can be seen in

exhibit MAS-5 of enclosure 16 which shows a copy of an Investment Promotion Contract dated 6.6.1992 entered into by the Respondent with Galada Continuous Castings Ltd of India (Galada) relating to the manufacturing of aluminum and aluminum alloy conductors in Vietnam together with an Investment Promotion Contract dated 6.10.1992 entered with Kumpulan Emas Sdn Bhd relating to 3 water supply projects under discussion with Ho Chi Min Water Supply Company;

the Respondent’s audited account for the financial years ended 28.2.1993 -28.2.1997 as seen in exhibit MAS-6 in enclosure 16 which shows revenue earned by the Respondent in that period ranging from RM125,838 for Financial Year Ending February 1993 to RM249,000 for Financial Year Ending February 1997 which has not been disputed by the Petitioner;

exhibit MAS-8 in enclosure 16 which shows investment of the Respondent for USD800,000- in Vietnam Export-Import Commercial Joint Stock Bank represented by 8,000 shares in the said bank as seen by the Option and Trust Deed dated 1.2.1996 and USD 150,000 investment in Lion Vietnam Joint-Stock Company represented by 285,000 shares in the same as shown by the inter alia the Lion Vietnam dividend issuance documents; 20

documents exhibited at exhibit MAS-9 of enclosure 16 which relates to various divestment and arrangements entered into by the Respondent, the Petitioner and Sadec Australia which showed investments in a joint stock company with Vietnam Exim Bank as well as the Lion Vietnam Joint-Stock Company with Lion Holdings Pvt Ltd of India of which the Respondent exited by Financial year End 28.2.2015 leaving only its investment in Binh An Water Company Ltd.

I also find that the Respondent has maintained a secretariat in Malaysia and Vietnam by the documentary evidence at exhibit MAS 7 of enclosure 16 which includes amongst others the Respondent’s resolution approving the tenancy for the Malaysia secretariat and the tenancy of the Vietnam Secretariat amongst others.

After due consideration of all the above evidence before this Court, I hold that the Petitioner’s contention that since its incorporation, the Respondent’s only investments were made in Vietnam and the Water Project is the only project ever carried out by the Respondent is therefore proven to be untrue. It is my finding that the Respondent had made various investments and derived income from them and that from the evidence before this Court, the Petitioner as a signatory to some of the aforesaid investments on behalf of the Respondent was fully aware of the said investments apart from being familiar with the operations of the Respondent company, including that of Binh An Water Company Ltd where he is a board member. 21

The Petitioner has therefore in this Court’s view falsely made the claims that the Respondent does not carry on any other business other than its investment in the Water Project.

It is also my finding that the various references to the identity of BAWC in the Petition is highly confusing if not ambiguous when it is referred to in paragraph 6 of the Petition as Binh An Water Corporation Limited but in exhibit PBH-4 of the Petition in enclosure 1, the company referred to in the Supplementary Contract (No. 2) to BOT Contract is in fact Binh An Water Corporation Limited (BAWCCL). This may well be a mistake in the referencing to Binh An Water Corporation Limited (BAWCCL) when the Supplementary Contract (No. 2) to BOT Contract had referred to the BOT Contract dated 12.8.1994 wherein Binh An Water Corporation Ltd was the entity referred to as being incorporated for the sole party responsible for the development and implementation of the Water

I have also noted the various documents in exhibit PBH-6 in enclosure 1 and exhibit MAS-12 in enclosure 16 and find that the parties had appeared to contemplate a voluntary liquidation exercise of the Respondent and that the chronology of events were as follows:

a reference to a letter dated 11.8.2020 from the Respondent to the Petitioner on the same, which can be seen in exhibit MAS- 12 in enclosure 16, on the corporate direction of the Respondent including the MVL as well as mention of the 22 Petitioner’s retirement as a director in the Respondent company;

an email dated 8.9.2020 from the Petitioner to Ali stating amongst others Ali’s unwillingness to discuss the Respondent’s matters with him, the drafting of the Petitioner’s resignation as director of the Respondent without his consent and the removal of the Petitioner thereto in a letter to Binh An Water Corporation Ltd, the proposal for the Respondent to prepare a shareholders agreement to allow a transfer of 49% of Binh An Water Corporation Ltd to be paid out in full to the Petitioner or for the said 49% share to be purchased prior to the Wanter Project being paid out;

a letter dated 30.12.2020 from the Petitioner’s solicitors, Messrs Chooi & Company and Cheang & Ariff (Petitioner’s Solicitors) stating inter alia his agreement to the distribution of the capital /cash surplus of the Respondent pursuant to the liquidation of Binh An Water Company Ltd;

another letter dated 28.1.2021 from the Petitioner’s Solicitors to the Respondent setting out the process and the obligations and responsibilities of the parties in respect of the Members

a further letter dated 10.2.2021 from the Petitioner’s Solicitors to the Respondent seeking for inter alia a formal response to the proposal of the Petitioner and seeking for the petitioner to be reinstated as a director of the Respondent in order for him 23 to participate as a director in the process of the capital reduction or MVL from commencement to completion;

another letter dated 25.2.2021 from the Petitioner’s Solicitors to the Respondent which was put to the attention of Ali which reiterated the Petitioner’s intent to proceed with the MVL in the most expedient manner;

a series of emails dated 17.2.2021 pertaining to the proposed MVL, the appointment of a liquidator thereto and discussions regarding the liquidation of Binh An Water Company Ltd which eventually led to a deadline imposed by Ali for the Respondent’s MVL as well as mention of the Petitioner’s reluctance to fulfill his duties as a director of Binh An Water Corporation Ltd.

Be that as it may, I accordingly conclude that:-

there is nothing before me that shows that the Respondent has to be wound up consequent to the realization of its investment in the Water Project;

there is no evidence of an unqualified acceptance of the MVL and there was ultimately no consensus as to the MVL;

any winding up of the Respondent will ultimately affect the Respondent’s other investments; 24

the Petitioner’s removal as a director was not with his consent but was however done legally pursuant to section 205 of the Companies Act 2016 (Retirement Of Directors).

In Liew Jui Hua & Ors v Johor Property (M) Sdn Hhd [1998] 2 CLJ Supp 34 the learned Judge therein, Abdul Malik Ishak J (as he then was) explained the failure of substratum as follows: “(4) A failure of substratum. This would be in a situation where the whole substratum of the company has gone down the drain (Re German Date Co. [1882] 20 Ch D 169; Re Haven Gold Co. [1882] 20 Ch D 151, Re Red Rock Gold Mining Co. [1888] 61 LT 785; Re Bleriot Aircraft Co. [1916] 32 TLR 253; Re Eastern Telegraph Co. [1947] 2 All ER 104; Re Merchant Navy Supply Assn Ltd [1947] 1 All ER 894; Galbraith v. Merito Shipping Co. [1947] SC 446; and Re Kitson & Co. Ltd [1946] 1 All ER 435). The substratum has been held to be gone when the main object for which the company was formed has become impracticable: Re Suburban Hotel Co. [1867] 2 Ch App

In Re Stratton's Independence Ltd [1916] 33 TLR 98 where the substratum had gone, but the company had the widest possible powers, the court allowed the petition to stand over for a scheme to be considered by the shareholders. Finally, where the company was a "bubble" a winding-up order would also be allowed by the court: Re

From the facts before me I thus hold that the Respondent has:- a) not lost its substratum as seen in the contemporary documents in particular the memorandum and articles of association and the events as presented to this Court; 25 b) the Petitioner has chosen to disclose only part of the evidence which from this Court’s finding appears to be done to support his claim in the Petition; c) there are insufficient grounds from the evidence before this Court for the Court to exercise its powers to wind up the Respondent on the just and equitable ground as the only ground on which the Petition is based on is that the Respondent’s objects are no longer achievable in that its principal business has come to an end and there was no allegations of loss of trust and confidence or a lack of confidence amongst the shareholders in the Petition; d) that the Petition is an abuse of process where the Petitioner’s own hands are tainted and I would like to quote and do indeed adopt Dato Ting Check Sii v Datuk Haji Mohamad Tufail b Mahmud and anor [2007] 7 MLJ 618 where the Court therein held: “(iv) Before exercising the discretion under just and equitable principle, the court must be satisfied that the petitioner's complaint is bona fide and he comes to the court with clean hands and that there is no collateral purpose in presenting the petition.”

Here again I would like to refer to a passage in the judgement of Liew Jui Hua & Ors (supra) which I find is extremely relevant in coming to this Court’s decision which is: “The scope and ambit of the "just and equitable" ground are wide and the courts are vested with a wide discretion to decide whether to order a winding-up or not. Indeed it is common knowledge that an 26 oppressed minority shareholders would resort to the "just and equitable" ground to wind up the company. It is a drastic measure for the minority shareholders who have been harshly treated by the controllers of a company to apply for a winding-up as "killing the company is a singularly clumsy method of ending oppression in its operation and it may be suicidal for the petitioners" (see Gower's Principles of Modern Company Law (4th edn., 1979) at p. 665).”

Thus, having regard to the entire circumstances of this Petition before me and based on the principle that the same is a matter of judicial discretion to be exercised on the just and equitable provision as well as the fact that winding up of a company should be the remedy of last resort, I hereby hold that the Petitioner has failed to satisfy this Court that the Respondent should be wound up and I do forthwith dismiss the Petition with costs of RM15,000 to be paid by the Petitioner to the Respondent. Dated: 17th day of December 2021 sgd. NADZARIN BIN WOK NORDIN JUDICIAL COMMISSIONER KUALA LUMPUR HIGH COURT Parties: Lau Kee Sern and Cynthia Liaw Tze Feng for the Petitioner [Messrs Kee Sern, Siu & Huey] Tang Kian Khuang for the Respondent [Messrs Bhadarul Baharain & Partners]