Company wins bid for judicial review on 6-month period for debt repayment

Wabina’s lawyers Ong Yu Shin and Soon Ley Theng outside the courtroom at the High Court in George Town today.

GEORGE TOWN: The High Court here today allowed a judicial review of a minister’s order on the federal gazette allowing companies to repay their debts in six months instead of 21 days during the movement control order period and preventing companies unable to pay from being wound up or declared bankrupt.

Justice Rosilah Yop granted the leave application by Wabina Constructions & Engineering Sdn Bhd which had sought a review of the ministerial order dated April 23.

In its application, it said the Companies (Exemption) Order 2020 was gazetted without debate in Parliament and was inconsistent with the Companies Act.

Its lawyer Ong Yu Shin also applied to transfer the case to the Federal Court for deliberation on whether such an order was constitutional.

He said this would also allow the apex court to decide if a minister could make changes to the law pertaining to companies’ repayment to creditors without the matter being heard in Parliament first.

Senior federal counsel Rahazlan Affandi Abdul Rahim raised no objection to the leave application to deliberate the minister’s order.

However, he objected to Ong’s request for the case to be transferred to the Federal Court through oral application only, saying a proper application should be filed.

Rosilah told Ong to make a formal request, pending which she would deliberate on submissions from both sides. She also set July 14 for case management.

On May 12, Wabina named the federal government, the domestic trade and consumer affairs ministry, its minister Alexander Nanta Linggi, the Companies Commission, and Seal Properties (KL) Sdn Bhd as respondents in the review.

Wabina had won an award of RM7 million against Seal Properties in February. But due to Linggi’s order, it said, it was unable to obtain its dues in 21 days or cause Seal Properties to be declared insolvent or bankrupt.

It accused the minister of acting unreasonably and in excess of his authority by changing substantive laws in the Companies Act without going through Parliament.

Prior to the minister’s order, companies which owed others money had a maximum of 21 days to settle their debts, failing which they would be liable to closure under Section 466 (1)(a) of the Companies Act 2016.

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