Azahar Mohamed J:

[1] PECD Berhad (the 1st applicant) and PECD Construction Sdn Bhd (the 2nd applicant) are two ailing companies. The applicants are insolvent or, at least, on the verge of insolvency. The 1st applicant, a public limited company is the holding company of the 2nd applicant. Bursa Malaysia has announced its intention to delist the 1st applicant. According to the balance sheet of the 1st applicant as at the financial end 31 December 2007, the shareholders' fund stands at approximately negative RM908,210,930,596 with total liabilities of RM1,011,300,596. And based on the balance sheet of the 2nd applicant as at the financial end 31 December 2007, the shareholders' fund stand at approximately negative RM853,783,131 with total liabilities of RM1,520,298,656.

[2] As a result of this state of affairs, both the applicants had on 13 August 2008, filed an ex parte application and obtained the following orders on 18 August 2008:-

(i) Meetings of certain creditors of the applicants (the Scheme Creditors) were ordered to be convened pursuant to s 176(1) of the Companies Act 1965 (the Act) within 90 days from the date thereof to consider a Scheme of Arrangement dated 22 October 2008 (the Scheme) proposed by the applicants.

(ii) A restraining order pursuant to s 176(10) of the Act (the Restraining Order) on all legal proceedings against the applicants for a period of 90 days from the date of the order.

[3] Against this backdrop three enclosures, came up for hearing before me. The applications of Merino-ODD Sdn Bhd (the 1st intervener), Affin Bank Berhad (the 2nd intervener) and Am Trustee (the 3rd intervener) are to be found in encl 19, encl 30 and encl 34 respectively.

[4] At this point, it is important to take a closer look at s 176(1) and s 176(10) of the Act. Now pursuant to s 176(1), it is provided that where a compromise or arrangement is proposed between a company and its creditors or any class of them or between the company and its members or any class of them the court may, on the application in a summary way of the company or of any creditor or member of the company, or in the case of a company being wound up of the liquidator, order a meeting of the creditors or class of creditors or of the members of the company or class of members to be summoned in such manner as the court directs. Further s 176(10) provides that where no order has been made or resolution passed for the winding up of a company and any such compromise or arrangement has been proposed between the company and its creditors or any class of those creditors, the court may, in addition to any of its powers, on the application in a summary way of the company or of any member or creditor of the company restrain further proceedings in any action or proceedings against the company except by leave of the court and subject to such terms as the court imposes.