The court upheld that the creditor grouping in the scheme of arrangement was unfair and lacked necessary transparency and disclosure.

Life is a series of natural and spontaneous changes. Don't resist them; that only creates sorrow. Let reality be reality. Let things flow naturally forward in whatever way they like - Laozi

Introduction

[1] There are two appeals before this court. In the first appeal, 38002/2021, the appellant, MDSA Resources Sdn Bhd ("MRSB") applied for the High court's sanction and approval for its scheme of arrangement pursuant to ss 366, 368 and 369 of the Companies Act 2016 (" CA ") and also extension of the restraining order. The High court ("HC") refused these two applications. In the second appeal, 379-02/2021, the appellant, Resolve Resources Sdn Bhd ("RSB") applied to intervene at the HC but this was also dismissed.

[2] Stripped off the legal jargon, at this stage for better and easier understanding, a little elaboration on the appeals above would be appropriate. MRSB is in colossal debts owed to its creditors. One of them is the respondent. MRSB proposed some terms to the creditors on how to settle these debts. MRSB wants the HC to give approval or sanction for this proposal. This proposal is better known as a scheme of arrangement. The respondent also objected to this proposal.

[3] This proposal means little, if not nothing if the creditors can still sue MRSB and take whatever court actions in respect of recovering the debts. Therefore, MRSB also wish that these actions continue to be restrained by the order of the HC. This is the application to extend the restraining order ("RO").

[4] Another application refused by the HC is the application by RSB to intervened in this case. RSB is the special purpose vehicle to assist the proposal to settle MRSB's debts. RSB wants to be a party at the HC. It wants to say its piece before the HC decides whether the sanction should be granted or not.

[5] Thus, before us are three matters. First, the refusal of the HC to sanction the scheme of arrangement. Second, is the refusal of the HC to extend the RO and third, the decision of the HC to dismiss the application to intervene by RSB. The first and second, relate to the first appeal and the third relates to the second appeal.

Background Facts

[6] MRSB is owned by Hatten MS Pte Ltd Singapore. MRSB is a company engaged in property development and related activities. It is involved in the mixed development of a site in Banda Hilir, Melaka. Four components for the development are Elements Mall, Hatten Place, Silverscape Residence and the hotel, Double Tree Hilton.

[7] MRSB which is in financial distress needed both, time and arrangement to stave off its creditors who are always entitled to recover their money from MRSB. That can be done if a meeting could be held between MRSB and its creditors, essentially to agree to some form of compromise or arrangement on the payment of the debts and for more time to be accorded to MRSB to honour its commitments.

[8] The intervener allowed by the HC in this case is the respondent, Adrian Sia Koon Leng who is a purchaser of the property developed by the MRSB, the appellant. He is also a creditor of MRSB as he had let that property he bought, back to MRSB for rental under a scheme known as "Guaranteed Rental Return Scheme" ("GRR"). He objects to any scheme of arrangement from MRSB. His main reason is because the scheme of arrangement lacks particulars.

[9] On 10 September 2020 the HC ordered the said meeting within two months and granted to MRSB the RO also for two months.

[10] Thereafter, the HC granted extension for the meeting to be held and also provided extension of the RO.

[11] Pursuant to the order made by the HC on 10 September 2020 for the meeting with regard to the scheme of arrangem