KUALA LUMPUR (May 7): Practice Note 17-listed Sarawak Cable Bhd (KL:SCABLE) is planning to take legal action against the appointed liquidators of its subsidiary, Leader Cable Industry Bhd (LCIB), alleging wilful negligence and misconduct in how LCIB's assets may be disposed of.
In a filing with the stock exchange on Wednesday, the loss-making cable manufacturer, currently under interim judicial management, said its board had used its remaining authority to inform the appointed liquidators — Khoo Siew Kiat and Goh Hua Yang from Messrs Deloitte Restructuring Services PLT — of its intention to start legal proceedings.
Sarawak Cable said the proposed legal action, which could include seeking a court order to prevent certain actions (injunctive relief), stems from concerns that the potential disposal of LCIB’s assets has been managed in a way that harms the company’s interests.
The company added that the specific details of the alleged misconduct will be revealed by its legal counsel once the lawsuit is filed.
On May 15 last year, the High Court granted a winding-up petition filed by OCBC Bank (Malaysia) Bhd against LCIB, as well as another Sarawak Cable subsidiary, Universal Cable (M) Bhd, after OCBC claimed that Sarawak Cable had not secured creditor approval for a proposed scheme of arrangement involving Universal Cable and LCIB by the deadline of Sept 26, 2023.
The court subsequently appointed Khoo and Goh as joint liquidators for both Universal Cable and LCIB.
Sarawak Cable, meanwhile, was placed under interim judicial management following an application by law firm Messrs Krish Maniam & Co, which is seeking payment for unpaid legal fees.
Sarawak Cable fell into PN17 status in September 2022 after its external auditor raised concerns about the company's ability to continue operating as a going concern. The company appointed Malacca Securities Sdn Bhd as its principal adviser to develop a regularisation plan but has yet to submit its plan to Bursa Malaysia.
Shares in Sarawak Cable last traded at seven sen, giving the company a market value of RM27.9 million.
The group’s largest shareholder is chairman Datuk Seri Mahmud Abu Bekir Taib, second child of the late Tun Abdul Taib Mahmud, with an 18.63% stake.