This was an appeal against the dismissal by the Shah Alam High Court of the appellant's application for a declaration that the appellant was a scheme creditor of the respondent and was entitled to attend and vote as an unsecured creditor at the unsecured creditors' meeting of the respondent.

The appellant, a fully owned subsidiary of Public Bank Bhd, is a licensed stock broking firm. The appellant had by a letter of offer dated 7 October 1997, offered a margin facility of RM50 million to Autoways Development Sdn Bhd, a wholly owned subsidiary of the respondent. A formal agreement was executed the same day and at the same time too, the respondent, as the parent company of the borrower company, gave a corporate guarantee in favour of the appellant. All these have not been disputed.

By early 1998, it became obvious that the respondent and its group of companies were facing financial difficulties and unable to settle their debts. As a result in May, 1998, they engaged Messrs Arthur Andersen Corporate Advisory Sdn Bhd ("Arthur Andersen") a reputable firm of accountants to prep