The court may grant leave for compulsory winding up of companies already in voluntary liquidation if there are significant concerns about management, independence of liquidators, and the need for independent investigations into the companies' affairs.

Ong Chee Kwan J:

Introduction

[1] This judgment deals with both Originating Summons No: WA-24NCC-574-10/2023 ("OS 574") and No: WA-24NCC-582-10/2023 ("OS 582").

[2] OS 574 concerns TH Heavy Engineering Berhad ("THHE"), a company under creditors' voluntary liquidation ("CVL"). It is not disputed that the Plaintiffs in OS 574 namely, Globalmariner Offshore Services Sdn Bhd ("GMOS"), Blackstone Technology Sdn Bhd ("BTSB") and Bynac Sdn Bhd ("DSB"), are all creditors of THHE.

[3] On or about 8 September 2023, THHE acting through its Board of Directors, commenced a creditors' voluntary liquidation process and appointed Mr Andrew Heng and Mr Ashvin Mahendran as the Interim Liquidators of THHE. This voluntary winding up process is challenged by the Plaintiffs.

[4] OS 582 concerns THHE Fabricators Sdn Bhd ("TH FAB"), the wholly owned subsidiary of THHE and a company under members' voluntary liquidation ("MVL"). It is also not disputed that the Plaintiffs in OS 582, namely BTSB and DSB, are all creditors of TH FAB.

[5] On 6 September 2023, the sole member of TH FAB, namely THHE (being the holding company), resolved to voluntarily wind up TH FAB and appointed Mr Andrew Heng and Mr Ashvin Mahendran as the Liquidators of TH FAB. As with THHE, the Plaintiffs also challenged the voluntary liquidation of TH FAB.

[6] The issues and facts arising in OS 574 and OS 582 are substantially the same and overlap with one another. In both proceedings, the Plaintiffs (creditors) seek leave of the Court to commence legal action or proceedings against the respective companies and their current liquidators. The applications are premised on s 451(2) of the Companies Act, 2016 ("CA 2016") relevant to companies under voluntary winding up, which provides:

"After the commencement of the winding up, no action or proceeding shall be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court may impose."

[7] The purpose of the Plaintiffs pursuing the applications for leave to commence legal proceedings against the Defendants in OS 574 and OS 582 is to seek, inter alia, orders that THHE and TH FAB be wound up compulsorily by the Court and for the appointment of independent liquidators by the Court in place of Mr Andrew Heng and Mr Ashvin Mahendran.

[8] The Plaintiffs' contention is that there are very compelling reasons why the voluntary liquidation regime is wholly unsuitable and that THHE and TH FAB ought instead, to be compulsorily wound up under the control and supervision the Court .

[9] As regards the prayer for leave to commence action against both Mr Andrew Heng and Mr Ashvin Mahendran, the grounds relied on are that they are unfit to act as liquidators and should not be allowed to helm the liquidation or be further involved in the affairs and undertakings of THHE and TH FAB. However, in the course of the oral submissions, learned counsel for the Plaintiffs informed this Court that he would not proceed with the leave application against the liquidators.

[10] Accordingly, this Court had proceeded to hear and determine only the question whether leave ought to be given to the Plaintiffs to commence proceedings to compulsorily wind up of THHE and TH FAB.

[11] In this regard, there is no dispute that this Court may order the compulsory winding up of a company notwithstanding that the company is already in voluntary liquidation. Section 464(1) of the CA 2016 provides:

"A company, whether or not it is being wound up voluntarily, may be wound up under an order of the Court on the petition of any one or more of the following:..."

[12] It is the Plaintiffs' case that there is sufficient prima facie evidence shown in these proceedings to warrant the grant of leave to the Plaintiffs to pursue the legal actions, on account of the following factors:

a) the need for an independent inquiry and investigation into the affairs of the companies.

b) the need for an independent liquidator