KUALA LUMPUR (July 4): The High Court has, in a landmark decision, set aside the corporate voluntary arrangement (CVA) by True Renaissance Development Sdn Bhd for the Empire Remix abandoned project in Subang Jaya.
This is the first decision made on a CVA that has been challenged in court.
Judge Ahmad Murad Abdul Aziz delivered his broad grounds for setting aside the CVA. In arriving at his decision, the court considered that the powers of the court cannot be ousted with the use of a Federal Court’s decision in the Semenyih Jaya case as a precedent for this.
The court also considered that there was no approval from the land owner for True Renaissance to continue with the project.
The ailing project is located across the road from Empire Remix 2 (which has been renamed Edumetro) in USJ1, Subang Jaya. Both projects were originally launched by True Renaissance, a unit of Mammoth Empire Holding Sdn Bhd (MEH). However, MEH, the developer behind Empire Subang, was unable to complete the projects due to financial difficulties.
Less than 30% of Empire Remix had been completed before the project came to a halt. As a result, 2,500 buyers — who have collectively paid RM500 million through end financing, excluding their down payment and bank interest for their property — have been left with nothing to show for it.
In 2019, landowner Dergahayu Sdn Bhd, which owns the 11-acre site, got into a legal tussle with True Renaissance due to project delays. Dergahayu then took over Empire Remix but failed to complete the development. At its launch in 2012, Empire Remix had an estimated gross development value of RM2.3 billion.
As a result, 467 purchasers had filed three separate applications to challenge the sanction of the creditors who had approved the CVA. Their challenge was that the CVA was intended for the ailing companies and not for the abandoned development.
Moreover, the purchasers claimed that the CVA for Empire Remix 1 also covered Empire Remix 2 and there was no definitive commencement and completion date.
The court held that the CVA was not workable, and hence awarded costs of RM30,000 to the interveners.
In the proceedings on Tuesday, True Renaissance was represented by Lee Hoe Leong and Emily Chong.
Some 364 purchasers were represented by Datuk KL Wong and Desmond Ho Chee Cheong, while the other 103 purchasers were represented by Ranjan N Chandran, T Susielan and Vinitha Laksmy Mohan.
The Edge Malaysia weekly reported last year that developer HCK Capital had taken over Empire Remix 2 with an injection of RM300 million to cover the construction, infrastructure and other costs. The project has a gross development value of RM850 million.