Conclusion

To recap, the facts given has shown that the investors of Lebar Daun Sdn. Bhd. are
against the decision to apply for a Scheme of Arrangement. With that, they seek to set aside
the Order granting the Scheme of Arrangement on grounds of non-compliance to Section
368(2)(c) and Section 368(2)(d) of the Companies Act 2016 (hereinafter referred to as “CA
2016”). Aside from that, they also wish to appoint an independent approved liquidator by way
of Section 367 of CA 2016 to evaluate the proposed Scheme. To that end, we have identified
2 main issues stemming from the investors’ wishes, first being whether the investors can
invoke Section 368(2) of CA 2016 to set aside the Order for a Scheme of Arrangement due to
non-compliance of pre-conditions; second being whether it is necessary for the investors to
appoint an independent approved liquidator to assess the viability of the proposed scheme.

In regards to the first issue posed, the case of Reg v Special Commisioners of
Income Tax District of Kensingson,ex parte Princess Edmonf De Polignac 1 is first
referred to show that full disclosure is paramount to an originating summons commencement
since the Court usually takes the disclosed facts into consideration when handling an ex parte
application. Further supported by the case of Barakah Offshore Petroleum Berhad & Anor
v Mersing Construction & Engineering Sdn Bhd & Ors 2, the Court stated that all 4
conditions stipulated under paras (a) to (d) of Section 3683 have to be fulfilled, otherwise a
restraining order will not stand even if it is already granted. Thus, given that Lebar Daun Sdn.
Bhd.’s CEO is missing, and that there are misappropriated funds involved, Section 368(2)(c)
and Section 368(2)(d) is of extra importance since the Court would want to consider all
relevant facts related to the company before granting their Order. But, Lebar Daun Sdn. Bhd.
is presumed to have disregarded the requirements, given that the investors are contending
against this. And so their restraining order should be considered an incurable irregularity and
the investors may be able to set aside said Order.

Moving onto the second issue, the key provision referred to is Section 367 of CA
20164, especially subsection (1) which states that an approved liquidator is be appointed to
assess the viability of the proposed scheme. Similarly, subsection (2) then requires this
liquidator to prepare a report of his findings and present it in a meeting with the creditors or

1
[1917] 1 KB 486
2
[2019] MLJU 338
3
Companies Act 2016, Section 368
4
Companies Act 2016, Section 367
members. In addition, the case of Mansion Properties Sdn Bhd v Sham Chin Yen & Ors 5
showed that the creditors have the right to apply for an independent liquidator appointed by
the Court by way of the same provision. As long as the appointed liquidator is one that is
approved as per Section 2(1) of CA 20166, the investors can apply for the court to appoint a
liquidator instead, or by way of Section 433(3)7 the Minister in charge of the portfolio of
finance can also approve a certified professional to be their liquidator.

To finalize, the investors is highly probable in succeeding on their applications as

shown by the authorities presented above. To start with, the restraining order applied by
Lebar Daun Sdn. Bhd. was already irregular given its non-compliance with the rules under
CA 2016, and so the investors can set aside it for further action. Then, case law has shown
that independent liquidators can be applied to be appointed if the creditors wish so, thus
granting the investors their second wish.

5
[2020] MLJU 1969
6
Companies Act 2016, Section 6(1)
7
Companies Act 2016, Section 422(3)