A bankrupt must demonstrate good conduct and repayment capability for discharge; insufficient investigations and low dividend to creditors can justify denial of discharge.

[1] By a Notice of Appeal to Judge in Chambers dated 3 May 2013 the Bankrupt appealed against the decision of the learned Senior Assistant Registrar (SAR) on 22 April 2013 dismissing the Bankrupt's application for discharge with no order as to costs.

Background

[2] The Bankrupt was adjudged a bankrupt on 14 May 2001 on the Petition of the JC. On 13 August 2007, the Bankrupt applied to discharge himself from bankruptcy pursuant to s 33(3) of the Bankruptcy Act 1967 (BA) (1st Discharge Application). However on the request of the JD's Creditors, on 17 August 2007, a public examination of the JD was conducted pursuant to s 17(2) of the said Act.

[3] On 8 October 2007, the learned Senior Assistant Registrar dismissed the 1st Discharge Application. On 15 September 2008, the Bankrupt's appeal to the Judge in Chambers against the dismissal of the discharge application was dismissed by the learned High Court Judge. The Bankrupt however did not appeal to the Court of Appeal.

[4] Five years later, by a notice dated 29 January 2013 issued pursuant to s 33(3) of the Bankruptcy Act 1967 , the Bankrupt decided to apply for the 2nd time to discharge himself from bankruptcy.

Public Examination

[5] A Public Examination of the JD was held on 17 August 2007. The JD admitted that before he was adjudged a bankrupt and that he held shares in 4 companies:-

i) Aik Shing Development Sdn. Bhd.;

ii) Fumah Construction Sdn. Bhd.;

iii) Potential Development Sdn. Bhd.; and

iv) Richlane Corporation Sdn. Bhd.

[6] The Bankrupt also stated under oath that he used the account the aforesaid 4 Companies to finance his own expenses. He also confirmed that he had paid about RM2 million to buy shares in the 4 Companies however he said he does not own a single asset.

[7] At the time the Bankrupt had signed and executed the guarantees for RM100 million in favour of Perdana Merchant Bankers (now CIMB Bank Berhad), he was aware that he would not be able to repay the amount guaranteed should Aik Shing Development Sdn. Bhd. fail to repay its loan.

[8] At the time of the public examination, the Bankrupt was working with Muafakat Kekal Sdn. Bhd., earning a monthly salary of RM3,500.00. His son was a shareholder in Muafakat Kekal Sdn. Bhd. and the Bankrupt was provided with a car and all the expenses relating to the car were covered by the company. Despite stating he does not own any asset his name appears on the assessment bill of a property bearing the situated at No. 19, Jalan Cumarasamy, 51100 Kuala Lumpur (Property). However, the Bankrupt claimed no knowledge of this Property.

[9] The Bankrupt was convicted for an offence of wrongful disclosure to the KLSE in the year 2000 and was fined RM400,000.00. This was a year prior to his bankruptcy. The Bankrupt also stated that one of the 4 Companies paid the fine for him but he was not sure which one although he would be jailed if the fine was not paid.

The Director General Of Insolvency's Report (DGI)

[10] The DGI prepared a report dated 26 February 2013 (DGI's Report). The DGI had in the DGI's 1st Discharge Application filed 2 earlier reports, dated 13 September 2007 and 19 September 2007 respectively.

The Bankrupt's Arguments

[11] It is submitted by the learned Counsel for the Bankrupt that the Bankrupt should be granted an absolute order of discharge on the following grounds:-

(a) That the Bankrupt ought to have been adjudged bankrupt.

(b) The Bankrupt stood as a guarantor for a business venture which unfortunately failed due to the 1997 Asian Economic downturn.

(c) The majority of the Credito