Zaleha Zahari JCA:

[1] The High Court Judge by order dated 27 February 2009 allowed the application of the three interveners (the respondents in these appeals) to set aside an ex parte order dated 18 August 2008 obtained by the applicants (the appellants in all three appeals). The three appeals were heard jointly and were unanimously dismissed with costs. My reasons in dismissing them are as follows.

[2] The common issues for determination in these appeals are: Whether there were material non-disclosure on the part of the appellants in obtaining the ex parte order dated 18 August 2008? In respect of the appeal against the respondent in Appeal No. W-02(IM)-385-2009, what is the consequence in law of an undertaking given by the 1st appellant to them as trustee of certain noteholders? Whether the proposed scheme of the appellants is mala fide?

The Facts

[3] The antecedent facts leading to the filing of these three appeals are these.

[4] On 14 October 2004 Murabahah Notes Issuance Facility Agreement (MUNIF/MMTN) was executed by PECD Jaya Holdings Sdn. Bhd. (formerly known as Peremba Jaya Holding Sdn Bhd., "the issuer") to issue certain notes ("the notes") of up to RM200 million to various noteholders (investors). AmTrustee Berhad (the respondent in Appeal No. W-02-385-2009 subsequently referred to as "AmTrustee") acts as trustee for the noteholders in relation to the notes, pursuant to a trust deed dated 14 October 2004 as amended by Supplemental Trust Deed dated 17 October 2005.

[5] In 2007, the issuer defaulted in payments under the notes which led to AmTrustee and the noteholders considering legal action to be taken. PEDC Berhad (the 1st appellant in all three appeals), the holding company of the Issuer, requested indulgence in respect of the Issuer's default. In consideration thereof, the 1st appellant agreed to pay to AmTrustee RM30 million from the 1st appellant's rights issue exercise.

[6] On 1 August 2007 the 1st appellant issued a Letter of Undertaking to AmTrustee where they irrevocably and unconditionally agreed that a sum of RM30 million from the proceeds received from its rights issue exercise will be paid to AmTrustee towards monies owing by the issuer under the notes and that such payment will be made not later than seven days after the date of receipt by the 1st appellant of the proceeds of the rights issue. The 1st appellant also agreed to indemnify the noteholders/AmTrustee, against all loses and claim.

[7] The Securities Commission, pursuant to the powers conferred upon them by the applicable law then, ie, s. 32 of the Securities Commission Act 1993, vide letter dated 26 September 2007, approved the 1st appellant's rights issue exercise conditional upon the terms set out in the Annexure which includes the utilization of the rights issue monies, of which RM30 million was to part-settle the MUNIF/MMTN and other borrowings that are already due and payable, as well as to comply with the relevant requirement of the Securities Commission's Policies and Guidelines on Issue/Offer of Securities pertaining to the rights issue exercise.

[8] On 18 September 2007 and 5 October 2007, the 1st appellant issued a Circular to its shareholders on the rights issue and Addendum to Circular. In both these documents, it was expressly stated that, from the proceeds of the rights issue, RM30 million will be for partial redemption of the MUNIF/ MMTN Notes.

[9] On 10 October 2007 the 1st appellant's shareholders approved the rights issue exercise and subscribed to the rights issue shares. The rights issue was successfully completed, granted listing status, and quoted on Bursa Malaysia Securities Berhad on 30 November 2007.

[10] After receiving the rights issue proceeds, vide letter dated 11 January 2008, the 1st appellant informed AmTrustee that the subject matter of their undertaking, (ie, the sum of RM30 million), would not be paid to AmTrustee but would instead be utilised under a scheme which involved cash payment of RM40 mil