By a notice under Section 218(2) (a) by the Companies Act 1965, the petitioner claims for a sum of RM 226,394.71 against the respondent. The said notice dated 11.12.02 was served on the respondent on the same day. The said notice required the respondent to pay to the petitioner the said amount within 21 days from the date of service of the notice on the respondent, failing which it would be deemed to be unable to pay its debts. The respondent had neglected and failed to pay the debt after a lapse of the specified period of 21 days. The petitioner filed this winding up petition on the ground that the respondent is unable to pay its debts.

At the hearing of the petition for winding up, learned counsel for the petitioner submits that the respondent is unable to pay its debts and there is

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no evidence whatsoever to indicate that the respondent is able to do so. In the affidavit verifying the petition, the petitioner has exhibited certain records from the office of the Registrar of Companies which show the status of the respondent company. From the documents exhibited, it is shown that as at December 2002, the records do not show any information available on the financial position of the company vis a vis its profit and loss account or any records pertaining to its assets. There is actually a dearth of information on the status of the company.

The respondent in opposing the petition contends that it is a general trading company and is still in operation has permits to carry on a transportation business which is now operated by another company by the name of Keris Express Sdn. Bhd. The respondent further contends that the petitioner has been paid through Keris Express Sdn. Bhd. for RM 6,000 on 24.5.2002 and RM 8,000 on 31.5.2002. It was further contended that the respondent has sufficient means to repay the petitioner its debt and to support its claim, the respondent has exhibited a cash flow projection for the year 2003 and thus has the ability and the capacity to pay its debts. The respondent also avers that it has other source of funds which will enable it to settle its debts to the petitioner.

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In my judgment, the debt owed by the respondent is not in dispute at all. The debt arose from a consent judgment entered into between the parties in Ipoh Sessions Court Saman No. 52-2061-99. The issue before me here is simply whether the respondent is deemed to be unable to pay its debts. It is not in dispute that the respondent has not complied with the notice of demand served on them on 11.12.02 and no payment has ever been made. Payments made by the company as averred in the affidavit of the respondent opposing this petition refers to the period before the notice of demand was served on the respondent and this has no bearing and effect whatsoever on the notice of demand dated 11.12.02. On the facts available before me, I am not convinced that there is any evidence to support that the respondent is able to settle its debts. The records of the company obtained from the Registrar of Companies do not lend any credence to this fact. The cash flow projection offered by the respondent is not in my view sufficient to prove that it is able to pay its debt. Through exhibit "C6" in Enclosure 7, the respondent has put forth a cash flow projection for the year 2003 for Keris Express Sdn. Bhd. I fail to see the relevance of this fact. If at all the respondent is trying to prove its solvency or profitability, it should have produced and exhibited its own account and not of others'. Keris Express Sdn. Bhd. is a different and separate legal entity from the respondent. As to the contention of the respondent that it has other source of funds which will enable it to settle its

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debts, no evidence is offered as to what those other source of funds are. It is merely a bare statement from the respondent.

It has always been said that a company may have substantial wealth and assets which cannot be realised immediately but if the company is unabl