KUALA LUMPUR (May 27): The High Court on Tuesday has ordered for the compulsory winding up of TH Heavy Engineering Bhd (THHE), as it allowed petitions from creditors Globalmariner Offshore Sdn Bhd, Boomslang Technology Sdn Bhd (previously known as Blackstone Technology Sdn Bhd), and Dynac Sdn Bhd.
Judge Atan Mustaffa Yussof Ahmad agreed with the petitioners that in the interests of corporate governance following multiple issues raised in the petitions, it was necessary for the court to consider compulsory winding up of the company, as opposed to voluntary winding up.
A voluntary winding up is initiated by the company, while a compulsory winding up is initiated by the court.
Atan Mustaffa noted that there were issues like questionable transactions, shifting of financial positions, lack of corporate governance, and the conduct of the previous interim liquidators, and the need for independent investigations.
“I have carefully considered the audit disclaimers, and in the interest of corporate governance that denied the creditors substantial rights….I am satisfied that voluntary winding up cannot be done on the compelling grounds of the serious concerns and multiple issues raised.
“Following this, this court grants the orders that THHE be wound up under Section 464 (1) of the Companies Act 2016 (CA), and the costs of the petition be paid from the company’s (THHE) assets,” the judge said in online proceedings covered by The Edge.
Section 464 (1) of CA outlines the grounds for which a company can be compulsorily wound up by the court.
Prior to this, THHE had been under voluntary liquidation in September 2023, a year after its delisting.
THHE has been ordered to pay costs of RM150,000 to the three petitioners who were represented by David Mathews.
Atan Mustaffa also dismissed an application by a creditor, Star Kriss Services Sdn Bhd, represented by counsel S Ravenesan, to appoint an independent liquidator to the matter, and allowed Globalmariner Offshore, Boomslang Technology, and Dynac’s petition to appoint Chiang Teng Guan from Messrs Rodgers Reidy & Co, and Lim Tian Huat as joint liquidators.
The judge in his decision ruled that the three petitioners, having 76.8% of THHE’s debt, have the right to nominate the joint liquidators, as this was a complex case and required complex forensic investigation.
“Having heard the submissions earlier, this court dismisses Star Kriss Services’ application, with costs of RM20,000,” Atan Mustaffa said.
Other parties who appeared in the online proceedings were Urusharta Jamaah Sdn Bhd’s counsel Rishwant Singh, and NSF Engineering Sdn Bhd’s Joyce Pang, while official assignee Franky Irwan Abdul Rashid appeared for the Insolvency Department.
COA dismissed TH Fabricators and THHE’s appeal
Earlier this month, a three-member bench had dismissed the Ministry of Finance (MOF)-controlled THHE’s bid to stop creditors from turning its voluntary winding up into a compulsory one.
The MOF owns 64.45% of THHE through Urusharta Jamaah Sdn Bhd (UJSB). The company was delisted in 2023.
A three-member Court of Appeal (COA) panel upheld a High Court decision allowing creditors of THHE and TH Fabricators Sdn Bhd to begin legal proceedings to place both companies into compulsory liquidation under court supervision, as it found no merit in their appeal.
“This appellate court upholds the High Court’s decision, as there is no appealable error that requires this court’s intervention,” appellate court judge Datuk P Ravinthran said in his broad grounds.
Ravinthran sat with judges Datuk Dr Choo Kah Sing and Datuk Ahmad Fairuz Zainol Abidin.
The creditors sought compulsory winding up, claiming the voluntary winding up process had multiple legal breaches. They also argued that the liquidators appointed by THHE and TH Fabricators, Andrew Heng and Ashwin Mahendran, had conflicts of interest, as a former senior executive of THHE worked at the same firm as them. The creditors requested the court to appoint independent liquidators.