Latest news with #THHE
Free Malaysia Today
13-07-2025
- Business
- Free Malaysia Today
Court takes over THHE's winding-up, citing liquidator's bias
The Kuala Lumpur High Court has ordered that THHE Engineering Berhad be wound up, with costs totalling RM150,000 to be paid out of its assets to the three petitioners led by Global Mariner Offshore Services Sdn Bhd. PETALING JAYA : The Kuala Lumpur High Court has, in a landmark decision, converted TH Heavy Engineering Berhad's (THHE) voluntary winding-up into a court-supervised compulsory liquidation, citing serious concerns over how the process was conducted previously. 'This is probably the second time that such an application has been made,' Justice Atan Mustapha Yussof Ahmad said in a written judgment handed down recently. 'The earlier case was decided over a hundred years ago,' he added, citing the Seremban General Agency case from 1923. The judge was setting out his grounds for allowing a petition by Global Mariner Offshore Services Sdn Bhd (GMOS) and two others under Sections 464(1) and (2) of the Companies Act 2016, and for the appointment of private liquidators. GMOS became a creditor of THHE on July 21, 2023, after securing judgment for US$63.42 million in damages following a shareholders' dispute. Together, GMOS and two other petitioners – Boomslang Technology Sdn Bhd and Dynac Sdn Bhd – hold 76.8% of THHE's total debt. 'The breaches of statutory provisions in the voluntary liquidation process, conflicts of interest of the interim liquidators, questionable circumstances surrounding the voluntary liquidation, and the compelling need for independent investigation all point inexorably to the conclusion that compulsory liquidation under court supervision is necessary. 'The evidence reveals concerning aspects of the voluntary liquidation process that call into question its bona fides,' Atan said in his 58-page judgment. This includes conflicts of interest arising from the appointment of two individuals as interim liquidators when the creditors' voluntary liquidation process began on Sept 8, 2023. FMT is withholding the names of the individuals concerned. Atan said there were serious questions about the independence of the two appointees, given their 'long-standing relationship with the THHE Group'. The duo were previously appointed to advise on debt restructuring schemes drawn up in 2017 and 2023. The judge said the interim liquidators had demonstrated a 'lack of objectivity and bias in favour of the directors who appointed them'. He found that they failed to properly investigate a 'suspicious' declaration of solvency for THHE Fabricators Sdn Bhd – a subsidiary of the company – after it 'showed a dramatic change from a RM29.469 million deficit to RM10.525 million surplus within one month'. He also said the interim liquidators had failed to adequately examine inter-company transactions, and had tended to defend actions taken by the company's directors instead of conducting impartial investigations. 'The interim liquidators' conduct throughout the voluntary liquidation process demonstrated a clear intention to maintain control rather than facilitate proper creditor governance,' the judgment read. Atan also questioned their conduct of a meeting convened on Oct 4, 2023, alleging they had 'deprived creditors of their statutory rights to elect a chairman and nominate a liquidator of their choice'. He criticised their subsequent attempt to initiate legal proceedings aimed at convening a fresh meeting 'under their control'. 'Their conduct throughout suggests a deliberate strategy to frustrate creditors' rights and maintain their position, rather than acting in the best interests of the creditor body as a whole,' he said. He pointed to the timing and manner in which the voluntary liquidation had been commenced, saying it 'strongly (suggested) an ulterior purpose'. He described the two scheme applications previously filed in court as 'tactical manoeuvres to delay creditors' enforcement actions', noting that they were submitted shortly after GMOS obtained its judgment. The judge concluded that the voluntary liquidation had been initiated to preempt any attempt by creditors to compulsorily wind up the company. 'The timing and circumstances suggest the companies may have sought to maintain control over the liquidation process by placing it in the hands of their chosen liquidators, rather than risk court-appointed liquidators in compulsory proceedings,' he said. Atan also found the creation of security interests immediately before liquidation to be 'particularly troubling'. 'The timing suggests an attempt to prefer certain creditors and ring-fence assets before liquidation commenced. 'The need for independent investigation is a recognised ground for conversion from voluntary to compulsory liquidation. A court appointed liquidator, as an officer of the court, may better serve the interests of the creditors,' he said. The court ordered that THHE be wound-up, and appointed Lim Tian Huat and Chiang Teng Guan, nominated by the petitioners, as joint and several liquidators of the company. It also ordered that costs totalling RM150,000 be paid to the petitioners out of THHE's assets. THHE's largest shareholder is Urusharta Jamaah Sdn Bhd (UJSB), an asset management company established by the finance ministry in 2010 to manage underperforming Lembaga Tabung Haji investments. Formerly known as Ramunia Holdings Berhad, the company was involved in the fabrication of oil and gas structures, and in construction and management services. In 2017, it was classified as a PN17 company, and was delisted by Bursa Malaysia five years later.
New Straits Times
13-07-2025
- Business
- New Straits Times
High Court orders compulsory winding up of TH Heavy Engineering
High Court orders compulsory winding up of TH Heavy Engineering New Straits Times KUALA LUMPUR: The High Court has ordered TH Heavy Engineering Bhd's (THHE) liquidation to proceed under court supervision, following concerns over how the voluntary process was managed. In a landmark decision, only the second of its kind in Malaysian legal history, the court ruled that the voluntary process failed to uphold the interests of creditors, especially independent ones holding the majority of THHE's debt. The consensus among independent creditors—who hold 74.6% of debts—alongside support from parties like NSF Engineering and the lack of opposition, presented a strong case for court-supervised liquidation, Justice Atan Mustapha Yussof Ahmad said in a written judgment. "The breaches of statutory provisions in the voluntary liquidation process, conflicts of interest of the interim liquidators, questionable circumstances surrounding the voluntary liquidation, and the compelling need for independent investigation all point inexorably to the conclusion that compulsory liquidation under court supervision is necessary," Atan said. The judge outlined the basis for granting the petition by Global Mariner Offshore Services Sdn Bhd (GMOS) and two other creditors under Sections 464(1) and (2) of the Companies Act 2016, including the appointment of independent liquidators. THHE was incorporated on Nov 18, 2003 under the Companies Act 1965, and was formerly known as Ramunia Holdings Berhad. The company was previously a public company listed on Bursa Malaysia, involved in the business of fabrication of oil and gas structures, construction services and management services. On April 28, 2017, THHE was classified as a PN17 affected listed issuer. Despite being granted eight extensions over a period of five years, THHE failed to submit an acceptable regularisation plan to address its PN17 status. Consequently, on 5 May, 2022, THHE was delisted by Bursa Malaysia. THHE's majority shareholder is Urusharta Jamaah Sdn Bhd (UJSB), a Finance Ministry-owned entity set up in 2010 to take over assets from Lembaga Tabung Haji. The court ordered THHE be wound up by the court under Section 464(1) of the CA 2016. It also ordered Lim Tian Huat and Chiang Teng Guan to be appointed as joint and several liquidators of THHE.
Free Malaysia Today
05-07-2025
- Business
- Free Malaysia Today
THHE directors lack standing to fight winding-up petition, says court
The High Court dismissed an application brought by three directors to intervene and oppose a winding-up petition, ruling that their application was flawed and had no legal basis. KUALA LUMPUR : The High Court has ruled that the former directors of TH Heavy Engineering Bhd (THHE) had no legal standing to oppose a petition brought by three creditors to convert the company's voluntary liquidation (CVL) into a court-ordered winding-up. Three THHE directors, led by Jauhari Hamidi, had asked the court to declare that they retained residual powers – both individually and collectively – to oppose the winding-up petition filed by Global Mariner Offshore Services Sdn Bhd and two other creditors. Justice Atan Mustaffa Yussof Ahmad, however, dismissed the application and awarded costs against them personally. In written grounds delivered last week, the court said a company's directors lose their powers once a liquidator is appointed. In 2017, THHE was classified as a PN17 company, indicating that the company was in financial distress. In September 2023, its board of directors commenced the CVL process, which saw joint interim liquidators appointed. The official receiver took over in May last year after the joint interim liquidators vacated their post. 'Having voluntarily ceded their powers to manage the company to the joint interim liquidators, (the directors) cannot now claim residual powers to oppose a petition that would merely place the liquidation under court supervision,' Atan said. He held that under Sections 440(2) and 476(2) of the Companies Act 2016, an interim liquidator is vested with 'every function and power' accorded to a liquidator under the Act. 'These provisions, read together, indicate that an interim liquidator possesses substantially the same powers as a permanent liquidator, which necessarily includes the power to determine whether to oppose, or not oppose, the petition,' he said. The judge accepted that directors may, in certain limited circumstances, retain some residual powers after a liquidator is appointed. 'However, the authorities establish that such residual powers are of a narrow scope and apply in specific situations,' he said, ruling that those powers do not extend to opposing a petition to convert a voluntary liquidation to one ordered by the court. Relying on the Federal Court's 2010 decision in Zaitun Marketing Sdn Bhd v Boustead Eldred Sdn Bhd, Atan said the directors of a company are not parties to a liquidation unless they qualify as creditors or contributories. He also ruled that any purported 'residual powers' had to be exercised collectively by the board, not unilaterally, as Jauhari had sought to do by engaging solicitors without a board resolution conferring authority on him. Atan also found that the directors' application was procedurally defective and lacked a 'proper legal basis'. 'The present case involves fundamental procedural defects where the application fails to comply with the mandatory requirement under Rule 7 of the Companies (Winding Up) Rules 1972 of being made by motion. 'More importantly, (it) lacks any proper legal basis under the Companies Act 2016 as neither Section 517 nor Section 486(2) applies to the circumstances presented,' he said. Global Mariner, Boomslang Technology Sdn Bhd and Dynac Sdn Bhd filed their winding up petition in February, citing THHE's inability to pay its debts. On May 27, the High Court allowed the petition. The three creditors collectively hold 76.8% of THHE's total debt, with Global Mariner owed US$63.42 million in damages following an earlier court ruling over a shareholders dispute. The petitioners were represented by David Mathews, Olivia Loh, Koh Jo Vin and Lai Ann Xing, and the directors by Wajdi Mohamad & Hajar Mardhiah. Joyce Pang appeared for NSF Engineering, a supporting creditor, while Tay Li Sheng appeared for Star Kris Services, which is opposing the petition. Wardah Nasuha Safian from the insolvency department appeared for the official receiver.
