The court held that voluntary liquidation cannot continue where it fails to protect creditor interests, necessitating conversion to compulsory liquidation for independent oversight and investigation.

Atan Mustaffa Yusoff Ahmad J:

Introduction

[1] Before the court are two applications concerning TH Heavy Engineering Berhad ("THHE"), a company currently under creditors' voluntary liquidation ("CVL"). The first is a petition filed by the Petitioners seeking the compulsory winding up of THHE pursuant to s 464(1) and (2) of the Companies Act 2016 (" CA 2016") and the appointment of private liquidators (Enclosure 1). The second is an application by Star Kris Services Sdn Bhd ("Star Kris"), an opposing creditor, seeking the appointment of its nominated liquidator instead of those proposed by the Petitioners (Enclosure 86).

[2] This petition represents a rare instance of "conversion" proceedings, where creditors seek to convert a voluntary liquidation into a court-supervised compulsory liquidation. This case is notable as being only the second such application in Malaysian legal history, with the first being decided over a century ago. As Mr David Mathews for the Petitioners submitted during oral arguments, "this is probably the second time that such an application has been made where companies have already voluntarily made a decision to wind up. The earlier case was decided over a hundred years ago — it's the Seremban General Agency case from 1923. There has been much development since then."

Procedural History

[3] Enclosure 1 was heard first on 9 May 2025. Given the novelty and importance of the case, the court reserved its decision for 27 May 2025.

[4] The court indicated that only if encl 1 was allowed would the court then proceed to hear encl 86 concerning the contest for appointment of liquidators. On 27 May 2025, the court delivered its decision allowing encl 1, finding that the voluntary liquidation could not be continued with due regard to the interests of creditors. However, the court reserved the order for appointment of liquidators and proceeded immediately to hear encl 86 immediately on the same day. After hearing submissions from all parties, the court decided in favour of the Petitioners' nominated liquidators.

Background Facts

The Company And Corporate Structure

[5] THHE was incorporated on 18 November 2003 under the Companies Act 1965, 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.

[6] On 28 April 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 September 2022, THHE was delisted by Bursa Malaysia.

[7] The largest shareholder of THHE is Urusharta Jamaah Sdn Bhd ("UJSB"), holding approximately 64.45% stake in THHE. UJSB is an asset management company set up by the Ministry of Finance with a 10-year mandate to manage underperforming investments transferred from Lembaga Tabung Haji.

The Petitioners And Their Debts

[8] The Petitioners are substantial creditors of THHE:

a) The First Petitioner, Globalmariner Offshore Services Sdn Bhd ("GMOS"), is owed:

i) USD63,419,999.00 (equivalent to RM288,719,545.45) plus costs of RM800,000.00 pursuant to the judgment in Suit 374 (defined below); and

ii) Additional amounts under the 2017 Scheme of Arrangement

b) The Second Petitioner, Boomslang Technology Sdn Bhd (formerly known as Blackstone Technology Sdn Bhd) ("Boomslang"), is owed amounts under the 2017 Scheme of Arrangement.

c) The Third Petitioner, Dynac Sdn Bhd, is owed:

i) RM100,000.00 in costs pursuant to the judgment in Suit 374; and

ii) Additional amounts under the 2017 Scheme of Arrangement

d) GMOS is by far the largest creditor of THHE with a value of 74.35% of total debts.

[9] The Petitioners obtained judgment in their favour on 21 July 2023. Specifically, on 21 July 2023, the High court in Suit No WA-22NCC-374-11/2016 ("Suit 374") awarded damages in favour of GMOS and dism