ECONPILE (M) SDN BHD v 1. ) ASM DEVELOPMENT (KL) SDN BHD 2. ) ASM DEVELOPMENT (KL) SDN BHD PENCELAH 1. ) MUHAMMAD FIRDAUS BIN HASHIM 2. ) MOHD IKRAM BIN RAHIM 3. ) FOONG SOON FEI 4. ) WONG LI GINN 5. ) WONG CHIN YAP 6. ) TRANSVISION ENGINEERING SDN BHD 7. ) LIM KOK HONG PIHAK KETIGA Sundarasan Arumugam

Case Significance

Illustrates the court's exercise of its power to appoint an interim judicial manager under section 405 of the Companies Act 2016, preserving a company's assets and affairs where the circumstances justify placing it under independent control pending a judicial-management application.

This High Court decision in the Commercial Division at Kuala Lumpur, delivered by Saheran Suhendran JC, concerns an application for judicial management of a development company, ASM Development (KL) Sdn Bhd, and in particular the appointment of an interim judicial manager. The application was brought by Econpile (M) Sdn Bhd under the judicial-management provisions of the Companies Act 2016 — sections 404 to 411 — read with the Companies (Corporate Rescue Mechanism) Rules 2018, together with the court's inherent jurisdiction. A range of respondents was named, including the company itself and a number of individuals, with further parties intervening and a third party joined. The immediate question was whether an interim judicial manager should be appointed pending the hearing of the judicial-management petition.

Judicial management is a corporate-rescue mechanism that places a distressed but potentially viable company under the control of an independent judicial manager, with a moratorium protecting it from enforcement action while a rescue is attempted; the appointment of an interim judicial manager under section 405 of the Companies Act 2016 allows the court to preserve the company's assets and affairs in the interim where that is necessary. The Court considered the elements required for such an appointment and whether, on the facts, the appointment of an interim judicial manager was warranted to protect the company's position pending the substantive hearing.

The Court was satisfied that the appointment was more than justified on the facts before it. It granted the relevant prayer of the application, appointing the judicial manager, and ordered costs of RM15,000 against the company, subject to allocatur. The judgment is a useful illustration of the court's exercise of its power to appoint an interim judicial manager under section 405 of the Companies Act 2016, preserving a company's assets and affairs where the circumstances justify placing it under independent control pending the determination of a judicial-management application.