The Court holds inherent jurisdiction to set aside a Judicial Management Order if it was obtained through non-disclosure of material facts or mala fides.

[1] This is an application by Infra Segi Sdn Bhd, a secured creditor of the Applicant Leadmont Development Sdn Bhd ("Leadmont" or "the Applicant"), to set aside the Judicial Management Order that this Court granted 14 June 2018 ("JMO") on the grounds that the Applicant has failed to make due disclosure of material facts and had suppressed material facts and had acted mala fides. I have allowed the application, not on the grounds relied upon by the Respondent but on a different ground. These are the full reasons for my decision.

Salient Background Facts

[2] The Applicant is the developer of a project known as Selayang StarCity Project which project has stalled as the main contractor which is the Respondent and the nominated sub-contractors have not been paid and have consequently terminated their contracts.

[3] It is not in dispute that the Applicant is unable to pay its debts. Amongst its creditors is the Respondent being the main contractor of the project that the Applicant was carrying out on land owned by its subsidiary Sierra Delima Sdn Bhd ("Sierra Delima").

[4] Sierra Delima owns the piece of land held under Pajakan Negeri 97183, Lot No 168. Bandar Selayang, District of Gombak, State of Selangor Darul Ehsan ("said Land").

[5] The Selayang StarCity Project sits on the said Land.

[6] The Selayang StarCity Project consists of one block of hotel (Block A-315 units) and 3 blocks of designer suites (Block B-320 units; Block C- 660 units and Block D-822 units) which sit on a shopping mall podium with a 550,000 square feet lettable retail space.

[7] The total estimated Gross Development Value of the Selayang StarCity Project is RM1.4 billion whilst the total estimated Gross Development Cost is RM1.2 billion.

[8] Leadmont's rehabilitation will largely depend on the completion of the Selayang StarCity Project and this in turn depends on its ability to secure a foreign currency loan amounting to USD 40 million from SSG Capital Management (Hong Kong) Limited ("SSG") and proposed advances from Augment Prosperity Sdn Bhd (which has common shareholders as Leadmont) to Sierra Delima estimated to amount to RM30 million. This shareholders' loan is from a proposed disposition of a piece of property belonging to Augment Prosperity Sdn Bhd.

[9] At the hearing for the JMO application, the Applicant informed the Court that Sierra Delima has entered into advance negotiations with SSG and exhibited the indicative discussion paper.

[10] The Central Bank of Malaysia has already approved this foreign currency loan up to an amount of USD 36 million. The remaining loan amount of USD 4 million does not require the Central Bank's approval.

[11] It is proposed that the funds will be utilised to complete the Selayang StarCity Project.

[12] Leadmont represented that there is an estimated cash inflow of RM801.8 million from Sierra Delima to Leadmont from the Selayang StarCity Project. The expected cash inflow will be utilised to pay the debts due to Leadmont for the respective construction works and management fees and after payment of the debts to Leadmont, the remaining surplus will be used to fund the construction works for Block A, B & D of the Selayang StarCity Proejct. Initially the intention is only to complete the Mall and Block C, not Blocks A, B and D.

[13 After the JMO was served on it, the Respondent successfully intervened in the proceedings and sought to set aside the JMO order on the grounds that there has been material non disclosure of facts and that the Applicant had acted mala fides. In separate proceedings, Sierra Delima had also obtained a JMO and the Respondent has similarly inte