MMM GROUP BERHAD (DAHULUNYA DIKENALI SEBAGAI ASIA MEDIA GROUP BERHAD) v ASIA MEDIA SDN. BHD. PIHAK TERKILAN PEAKMAX SDN BHD

Case Significance

Confirms that in appointing a private liquidator under section 477 of the Companies Act 2016 the choice of the majority creditors in number and value ordinarily prevails, and that a mere prior professional relationship, without evidence of actual conflict, will not disqualify a professional nominee.

This High Court decision at Kuala Lumpur concerns competing applications to appoint a private liquidator of a company already in winding-up, and confirms that the wishes of the majority creditors ordinarily prevail. The company, Asia Media Sdn Bhd, had been wound up in 2021 on a creditor's petition, with the Official Receiver appointed liquidator. Two applications under section 477 of the Companies Act 2016 were before the court: one by the applicant, MMM Group Berhad (formerly Asia Media Group Berhad), the company's holding company and largest creditor, to appoint its two nominees as private liquidators; and one by another creditor, Peakmax Sdn Bhd, to appoint a different nominee. Only three creditors had lodged proofs of debt: the applicant, holding some 95.11% of the proved debt, the petitioning creditor at 4.61%, and Peakmax at 0.28%. At a creditors' meeting convened by the Official Receiver, votes representing 99.72% of the proved debt favoured the applicant's nominees, against a single vote of 0.28% to maintain the Official Receiver. The court noted, following the Court of Appeal in Malaysian Assurance Alliance Bhd v Comsa Properties Sdn Bhd, that the main voice in appointing a liquidator is that of the majority creditors. On the objection that the applicant's nominees should be disqualified for a prior professional relationship, the court held, drawing on authority including Pongrass Group Operations Pty Ltd, that commercial reality means such a relationship does not by itself impair a professional's capacity to act, and that a mere previous relationship, without more, is insufficient to disqualify a nominee absent evidence of conflict or lack of impartiality. Since the majority in number and value of the creditors supported the applicant's nominees and no disqualifying conflict was shown, the court granted the applicant's application and dismissed the competing application. The court added that, the Official Receiver having convened the creditors' meeting and the majority in both number and value having spoken decisively for the applicant's nominees, there was no proper basis to prefer a nominee supported by only a fraction of the proved debt.