KUALA LUMPUR (April 14): ACE Holdings Bhd applied with the High Court’s (Commercial division) to be placed under judicial management last month, under Section 405 of the Companies Act.
Court papers sighted by The Edge following a file search revealed that the application was filed by Messrs Vinu and Lopex on March 13, and a second case management was fixed for Friday (April 14) after Koperasi Permodalan Felda Malaysia 2 Bhd applied to intervene.
The court has now fixed May 17 for ACE Holdings' judicial management petition to be heard by judge Ahmad Murad Abdul Aziz.
Judicial management is a corporate rescue mechanism, where companies apply with the High Court to appoint a judicial manager for them when they are unable to pay their debts, creditors or directors.
ACE Holdings is facing action from the Securities Commission Malaysia (SC) for its recent attempt to take over Apex Equity Holdings Bhd, as well as suits from several investors over its failure to deliver investment returns.
The company is seeking for Datuk Robert Teo Keng Tuan from RSM Corporate Restructuring (Malaysia) Sdn Bhd to be appointed as its judicial manager, and to be placed under judicial management for six months.
It is also seeking to stay any winding-up proceedings or enforcement, detention or distress levied against the company or its properties, and for no order of winding up of the company to be made during the period.
In addition, ACE Holdings is also seeking liberty to file for an extension of the order.
In the affidavit supporting its application, founder Datuk Choong Chee Meng said the financial position of the company had been affected, and it is currently unable to pay its debts.
Hence, it is seeking judicial management to ensure the company’s survival and the preservation of its business.
“The appointment and expertise of a judicial manager will be able to nurse the company’s financial health, and will give rise to its recovery from the debts owed to its creditors and ultimately benefit its creditors,” Choong stated in his affidavit of support.
ACE Holdings' other legal battles
Koperasi Permodalan Felda had obtained a Mareva injunction against ACE Holdings to freeze RM40 million held by the company, following three investment agreements which promised the cooperatives a return of 18% to 20%.
Koperasi Permodalan Felda claimed that ACE Holdings’ subsidiary ACE Credit was late for several months with the payment of their 2021 investment returns, despite the cooperatives repeatedly chasing for the payment that was supposed to be made within 14 days from Dec 31.
The 2021 returns were only paid on March 28. ACE Credit then failed to pay the returns for the first half of 2022 under the third agreement, which was supposed to be made semi-annually.
Although it initially asked for more time to make the payment as Koperasi Permodalan Felda chased for the returns, ACE Credit later told the cooperatives, via a lawyer's letter, that the third agreement was only a money-lending agreement, and not an investment agreement, which the cooperatives vehemently denied.
Following this, the cooperatives had filed for leave (permission) to intervene in the judicial management application, and case management has been fixed for next month.
Besides this, ACE Holdings, along with Choong, have applied to strike out the suit filed by the SC against it and Apex Equity last November, saying that it had disposed of its shares in Apex Equity on Jan 1, therefore rendering the suit as academic.
Apex Equity, Apex Securities and other individuals or parties named in the SC's suit had also sought to strike out the legal action.
The SC filed the action last November to prevent ACE Group from taking control of Apex Equity.
The application to strike out the SC's suit will be heard before High Court Judicial Commissioner Adlin Abdul Majid on June 27.