ASAKARIKEN (M) SDN. BHD. (Registration No. 199501014156) LAIN-LAIN ASAKA RIKEN CO., LTD.

IN THE HIGH COURT OF MALAYA AT PULAU PINANG IN THE STATE OF PULAU PINANG, MALAYSIA COMPANIES (WINDING-UP) NO. PA-28NCC-30-03/2020 In the matter of Asakariken (M) Sdn. Bhd. (Registration No. 199501014156); And In the matter of Section 464(1)(b), 465(1 )(e), 466(1)(a) and/or 466(1)(c) of the Companies Act 2016; And In the matter of the Companies (Winding up) Rules 1972 BETWEEN ASAKA RIKEN CO., LTD. ...PETITIONER AND ASAKARIKEN (M) SDN. BHD. (Registration No. 199501014156) .. RESPONDENT GROUNDS OF JUDGMENT Introduction [1] The protagonist in this suit were the Petitioner and Ms. Foong Wai Fong (“Foong”). They were both shareholders/contributories and creditors of the Respondent company. [2] [3] [4] [5] [6] The Petitioner issued a statutory demand to the Respondent for repayment of for a loan that was due and owing. When the demand was not satisfied within the 21-day period, the Respondent was deemed insolvent and the Petitioner proceeded to petition to wind-up the Respondent pursuant to sections 465 and 466 Companies Act 2016 (Encl. 1). The Respondent themselves did not resist the Petition. In other words, the Respondent were deemed to have admitted to the debt and the propriety of the statutory demand and the Petition. Foong, however, appeared to oppose the Petition. It was unclear from the ‘Notice of Intention to Appear in what capacity she was appearing to oppose the Petition. She had omitted to state her capacity in the said form as was required. She subsequently submitted that was appearing in the 3 capacities — creditor, contributory and director. Foong’s ground for opposing the Petition was premised primarily on the validity of the debt. She says that the alleged debt was not due and owing and that the statutory demand was bad. There were 2 other applications before the court: (a) Foong applied to strike out the Petition on the same grounds for opposing the Petition (Encl. 62); and (b) The Petitioner filed an application amend the description of the Respondent in the proceedings. It was merely to add the words [7] [8] [9] “(in receivership)” immediately after the name of the Respondent (Encl. 34). Decision | heard all 3 applications together. After hearing the parties’ submissions: (a) dismissed Foong’s application to strike-out the Petition (Encl. 62); (b)! allowed the Petitioners application to amend the description of the Respondent (Encl. 34); and (c)l ordered the company to be wound-up (Encl. 1). These are the grounds for my decisions. Background The Petitioner owned about 60%, while Foong owns about 30%, of the shares in the Respondent company. Loan [10] In 2014, the Petitioner loaned RM2,800,000.00 to the Respondent (“Loan”). That loan was due on 31.07.2018. Statutory Demand [11] On 16.01.2020, the Petitioner issued a statutory demand to the Respondent for the repayment of RM840,000.06 of the Loan (“Statutory Demand”). It was not repaid. Under Receivers and Managers [12] Shortly thereafter, the Respondent came under receivership on 25.02.2020. As a matter of interest, it was the Petitioner who appointed receivers and managers over the Respondent pursuant a Facility Agreement and Debenture dated 17.04.2019 (“Debenture”) in respect a different loan. Other Issues Kept Separate [13] That Debenture and the dispute between the Petitioner and Foong qua shareholders is the subject of an ongoing separate civil suit. | make particular mention of the civil suit more as a reminder that this Petition is only concerned the solvency of the Respondent. Other issues in dispute between the Petitioner and Foong qua shareholders are not within the ambit of consideration of this Petition. Resolution for those disputes will have to be found in the civil suit or elsewhere. Set-Off [14] After the lapse of 21-day statutory demand period, the Petitioner on 19.03.2020 put the Respondent on notice that the entire RM2,800,000.00 loan sum was due and that it had set-off the debt against the sum of RM2,473,650.70 due from the Petitioner to the Respondent, leaving a balance of RM326,249.21 due form the Respondent to the Petitioner (“Set-Off Notice”). Petition [15] On 30.03.2021, the Petitioner petitioned to wind-up the Respondent on the premise that the Respondent is deemed insolvent for the non- payment of the statutory demand dated 16.01.2020. However, the outstanding amount due on the petition was a reduced sum of RM326,249.21 after accounting for the set-off. Not Opposed by Respondent [16] The Respondent is not opposing the Petition. In other words, they admit the debt and accepts the propriety of the claim in the statutory demand and the Petition. Opposition from Foong [17] Foong filed a Notice of Intention to Appear on 16.06.2020 to oppose the Petition supported by 4 affidavits dated 16.06.2021, 03.07.2020, 15.07.2020 and 07.08.2020. Grounds of Opposition [18] Foong’s main ground for opposing the Petition is that the sum of RM326,349.21 is not due under the loan repayment terms or, alternatively, is no longer due under the statutory demand which has been fully set-off against the RM2,473,650.79. [19] In short, Foong is trying to dispute the debt when the Respondent themself are not. This is something that she is not entitled to do at law. Legal Principles [20] The relevant legal principle as to who and on what basis he may oppose a winding-up petition is summarized in the authoritative decision of the High Court in Lin Shoon Jewellers Sdn Bhd v Kedai Emas Mee Chan Sdn Bhd [2006] 2 CLJ 644 (“Lin Shoon’) as follows: “(45] To sum up what has been adumbrated above, the court makes the following conclusions: (a) that the opposing contributory as a contributory to the respondent is entitled to appear and oppose the creditor’s petition to wind-up the respondent notwithstanding the respondent itself does not appear to oppose the petition; (b) if the opposing contributory has fully paid up for his shares in the respondent, he must first show that the respondent is solvent and there is a likelihood that there will be surplus of assets at the end of the process available for distribution among all the contributories; (c}) that the grounds for the opposition by the opposing contributory must be confined to matters that relate or affect his liabilities or rights as a contributory to the respondent in the outcome of the winding-up process, not otherwise; (d) for that purpose, the opposing contributory is not allowed to raise issues to the effect that he disputes the debts claimed by petitioner against the respondent. Such dispute should properly be raised by the respondent itself; ...” [21] These principles were more recently affirmed by the High Court in Taman Rimba (Mentakab) Sdn Bhd v Warrior Rubber Products (M) Sdn Bhd [2017] 1 LNS 1896 (“Taman Rimba’) where the above passage was reproduced with approval. The learned High Court Judge also added as follows: “[66] Fifthly, case law authorities have held that a contributory may rightfully only oppose a winding up petition on grounds which are related to matters affecting his rights or liabilities qua contributory. Matters concerning debts of a company are not ordinarily within the remit of a contributory to raise, what more to oppose. A corollary to this principle is that as between the standing of the contributories of a company vis-a-vis its creditors in a winding up proceedings, greater weight is to be ascribed to the wishes of the creditors, more so when the basis is the inability of the company to pay its debts when due.” [22] In Lin Shoon and Taman Rimba, the party appearing was opposing the Petition in their capacity as a contributory. However, the principles set out therein is not confined to just contributories. | am of the view that the said principles equally apply parties seeking to oppose the petition in any other capacities. In the case of a creditor, the adumbrated principles would apply mutatis mutandis. [23] As for a director, applying the same legal principles, | really cannot envisage a situation where the director’s rights and liabilities would be affected by the winding-up per se. As such, | am of the view that, in practice, a director has no standing to appear on the petition. [24] These views are fortified by the fact that the statutory form for the “Notice of Intention to Appear” (Form 8 of the Winding-up Rules) only provides for a contributory to appear to oppose, and/or a creditor to appear to support, the Petition. Application to Instant Case [25] Applying the said legal principles to the instant case, | find that: (a)Foong failed to demonstrate that that she has an interest in the winding-up of the company qua contributory, i.e., that the Respondent was solvent and there is a likelihood that there will be surplus of assets at the end of the process available for distribution among all the contributories. (b)Even if Foong did have an interest in the winding-up of the company, her ground for opposing the petition — disputing the debt due to the Petitioner — was not premised on matters that relate or affect her liabilities or rights adversely as a contributory to, or a creditor of, the Respondent in the outcome of the winding-up process. (c) Above all else, Foong is not allowed to raise issues to the effect that she disputes the debt claimed by Petitioner against the Respondent. Such dispute should properly be raised by the Respondent themselves and, in this case, the Respondent are not disputing the debt. Court Bound Not to Consider Debt Issue [26] If the debt was disputed by the Respondent themselves, | would have given it full consideration and come to a finding on whether the debt was bona fide. But the law is trite that Foong, not being the Respondent, does not have /ocus standi or right to dispute the debt. That right belongs exclusively to the Respondent who have admitted the debt. | am thus bound not to make any finding other than the debt due is bona fide. Other Allegations [27] Foong also made several other lesser allegations. She attributed the Respondent's lack of opposition to the Petition to the fact that the Respondent is under the control of the Petitioner and claims that the Petitioner and Respondent has conspired to file the Petition for collateral purpose. [28] These complaints, as | have said, are not within the ambit of consideration in the instant Petition. They do not relate or affect her liabilities or rights adversely as a contributory to, or a creditor of, the Respondent in the outcome of the winding-up process. [29] If Foong wishes to seek remedies against such complaints, they belong elsewhere such as in the civil suit for minority oppression, conspiracy, etc. Whatever it is, it does lie here in the winding-up petition on the grounds of insolvency. Decision [30] For the above reasons, | dismissed Foong’s striking out application (Encl. 62). Amendment Application [31] The Petitioner applied to amend the description of the Respondent from “Asakariken (M) Sdn Bhd” to “Asakariken (M) Sdn Bhd {in receivership)”. All that the Petitioner sought to do was to clarify that the status of the company — that in was in receivership. There was no doubt as to the identity of the Respondent party and that it had not changed. [32] The court is vested with the power to make amendments to the description of the parties to the proceedings as long as it does not change the party (Pearlman (Veneers) S.A. (PTY) LD v. Bernhard Bartels [1954] 1 WLR 1457, English Court of Appeal). [33] ! accordingly allowed the Petitioners application to amend the description of the Respondent (Encl.34). | also ruled that there is no necessity to re-advertise, re-gazette and/or re-serve the causepapers. Petition [34] | rejected Foong’s opposition to the Petition for the same reasons that | dismissed her application to strike out the Petition. | accordingly ordered that the Respondent company be wound-up (Encl. 1). Dated 15'* June 2021 LA seo. CHONG Judicial Commissioner High Court of Malaya, Penang 10 Peguamcara Bagi Pihak Pempetisyen: Saritha Devi Kirupalani / Nur Ainnabila Rosdi Tetuan Zaid Ibrahim & Co Peguambela & Peguamcara Level 19, Menara Milenium, Jalan Damaniela, Pusat Bandar Damansara, 50490 Kuala Lumpur Peguamcara Bagi Pihak Foong Wai Fong: Karin Lim Ai Ching / Shamsul bin Jamil / Lee Kar Kheng Tetuan Presgrave & Matthews Peguambela & Peguamcara Tingkat 1, No. 2 Lebuh Pantai, 10300 Pulau Pinang 11