Directors of a company in Creditors' Voluntary Liquidation do not retain residual powers to oppose a winding-up petition initiated by themselves; such powers cease upon the liquidator's appointment without creditor approval.

Atan Mustaffa Yussof Ahmad J:

[1] Before the court is an application by the directors of a company under Creditors' Voluntary Liquidation, seeking determination of whether they retain "residual powers" to oppose a petition that would convert the voluntary liquidation to a court-supervised one. The application raises fundamental questions about the scope of directors' authority following the commencement of liquidation proceedings, particularly where the company is already under the control of a court-appointed Interim Liquidator. Central to this dispute is the directors' contention that despite having initiated the voluntary liquidation process, they retain residual powers to oppose the conversion petition, a position vigorously contested by the petitioning creditors who argue that such powers ceased upon the commencement of liquidation.

Salient Facts Of The Case

[2] The Respondent, TH Heavy Engineering Berhad, is a company that was classified as PN17 on 28 April 2017 and was ultimately delisted by Bursa Malaysia on 5 September 2022 after failing to present a regularisation plan to address its PN17 status.

[3] On 8 September 2023, the Respondent, acting through its Board of Directors, commenced a Creditors' Voluntary Liquidation ("CVL") process. The Board members who executed the Statutory Declaration of Inability to Continue Business were Ahmad Al Farouk bin Ahmad Kamal, Jauhari bin Hamidi ("Jauhari"), Adinan bin Maning ("Adinan"), and Abdul Manap bin Hj. Hasan. Concurrently, Andrew Heng ("Andrew') and Ashvin Mahendran ("Ashvin") were appointed as Joint Interim Liquidators ("J/L") of the Respondent.

[4] According to the List of Creditors as at 8 September 2023, the total liabilities of the Respondent were recorded at RM391,041,742.24.

[5] On 4 October 2023, a meeting of members of the Respondent was held, where the shareholders voted and resolved that the Respondent be wound up voluntarily and that Andrew and Ashvin be nominated as the joint and several liquidators for the Respondent. On the same day, a Creditors' Meeting was held, but it did not proceed to completion as it was terminated by Ashvin, who was acting as chairman of the meeting.

[6] Subsequently, on 30 October 2023, an injunction was granted by the court restraining the JIL from taking any steps pursuant to the 'decision' to convene, re-convene, or hold any creditors' meeting of the Respondent. This injunction was granted pending the determination of an Originating Summons filed by the Petitioners.

[7] The JIL wrote to the Official Receiver seeking an extension of time to act as interim liquidators and to hold the creditors' meeting. Despite several extensions obtained, the final extension granted by the Official Receiver was until 31 January 2024. Due to the expiry of this deadline and the absence of a creditors' meeting, the JIL vacated their office on 22 February 2024.

[8] On 2 February 2024, leave was granted by Justice Ong Chee Kwan in Originating Summons No WA-24NCC-574-10/2023 [Globalmariner Offshore Services Sdn Bhd & Ors v. TH Heavy Engineering Berhad & Ors And Another Case 2024 MarsdenLR 4397 ; [2025] 8 MLJ 401] for the Petitioners to file a winding-up petition against the Respondent. Subsequently, on 21 February 2024, Global Mariner Offshore Services Sdn Bhd, Boomslang Technology Sdn Bhd, and Dynac Sdn Bhd (collectively "the Petitioners") filed this Winding-Up Petition in Companies (Winding-Up) No. WA-28NCC-175-02/2024 ("Petition 175') to wind up the Respondent pursuant to ss 464(1) and (2) and 465(1) of the Companies Act 2016 (" CA 2016").

[9] On 29 February 2024, the Petitioners filed a Summons in Chambers (encl 28) seeking the appointment of private liquidators as interim liquidators of the Respondent pending the determination of Petition 175.

[10] On 6 March 2024, the Respondent filed a Notice of Intention to Oppose (encl 32) expressing its intention to appear at the hearing of Petition 175 and oppose it. On the same date, the Respondent filed a Summo