In a voluntary winding up, claims against a company must directly arise from contractual agreements; unliquidated damages are not provable without established liability through trial.

Introduction

[1] This is an appeal concerning the proof of debt filed against a company that has been voluntarily wound up.

[2] The Appellants, who were the plaintiffs in the High Court, are foreign individuals from the Middle East.

[3] The Respondent, who was the first defendant in the High Court, is a private incorporated company governed by the Companies Act 2016 . It is the holding company of Abrar Global Asset Management Sdn Bhd ("AGAM"), an asset management company.

[4] We heard the appeal on 20 May 2025 and thereafter reserved our decision to deliberate on the submissions advanced by the parties.

[5] Having now done so, we deliver our decision below together with the supporting grounds.

Background

[6] Between March and June 1997, the Appellants (other than the Second Appellant) were invited by AGAM to invest in a short-term investment ("Raya Fund"). The Raya Fund promised a return on capital and profit of between 15%-20% within a year, by June 1998. The Raya Fund was structured based on Bai Bithaman Ajil Islamic financing for the sole purpose of enabling AGAM to purchase shares in Mun Loong Bhd ("Shares") from the Respondent at RM13.00 per share in April 1997, and for the subsequent repurchase of those Shares by the Respondent from AGAM at RM15.60 per share in October 1998. For this purpose, an asset purchase agreement, an asset sale agreement, a trust deed, and a power of attorney were executed between the Respondent and AGAM. The through a corporate guarantee and directors' guarantees in favour of AGAM.

[7] The Raya Fund was the brainchild of Dr Wan Hasni Wan Suleiman ("Dr Wan Hasni"), an astute Bumiputra businessman and the Chief Executive Officer of the Abrar group of companies, which included the Respondent and AGAM.

[8] Pursuant thereto, the First to Sixth Appellants invested USD1,400,000.00, USD1,983,339.94, USD198,333.99, USD99,985.00, USD91,630.31, and USD385,000.00 respectively.

[9] Following the Asian Financial Crisis of 1998, the Malaysian stock market crashed. The Respondent fell into severe financial difficulties and was consequently unable to repurchase the Shares.

[10] On 23 February 1999, AGAM informed all investors, including the Appellants, that the Raya Fund could no longer be realised due to the stock market crash. The Respondent proposed a settlement through the issuance of new shares in Abrar Corporation Bhd, but this proposal did not materialise.

[11] Instead, on 27 May 2000, the Respondent was placed under special administration by Pengurusan Danaharta Nasional Bhd pursuant to the Danaharta Act 1998 . A workout proposal was prepared to settle claims and debts owed to the Respondent's creditors. This proposal took effect when the Respondent entered into creditors' voluntary liquidation on 30 November 2005, under the charqe of Anwar Yahva and later Lim San Peen, the second defendant in the High Court, as liquidator ("the Liquidator").

[12] Pursuant to the said liquidation, the Appellants submitted proofs of debt to the Liquidator. The First and Third to Sixth Appellants submitted their respective proofs of debt, while the Second Appellant submitted a proof of debt on behalf of the Khuniani investors

[13] The Liquidator, however, rejected the Appellants' proofs of debt.

In the High Court

[14] As the Appellants are dissatisfied with the rejection of their proof of debt, they instituted Kuala Lumpur High Court Originating Summons No WA-28PW-115-04/2021 on 14 April 2021 and claimed as follows against the Respondent and Lim San Peen in Bahasa Melayu ("Application"):

"a) Kebenaran membuat permohonan ini;

b) Bahawa keputusan Encik Lim Sa