SFI confident of not winding-up
Published on: Tuesday, May 30, 2017
Kota Kinabalu: Sabah Forest Industry Sdn Bhd (SFI) is confident of settling all legal suits filed in the High Court here by creditors seeking to wind it up as a last resort to recover their debts.Before a packed court on Monday, High Court Judge Datuk Douglas Cristo Primus Sikayun adjourned hearing of petitions to July 4.Another High Court presided by Justice Ismail Brahim also heard a creditor's petition on the SFI case for recovery of debt/services delivered.
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A total of more than 30 secured and unsecured creditors have taken legal action to recover their debts from SFI. Lawyer for SFI, Sukumaran Vanugopal, dismissed any possibility that the pulp and paper mill business would be wound up after July 4."You saw today that some of the creditors' claims were settled and some petitions were struck out," he told Daily Express. "The prices of paper have skyrocketed and my client is bent on moving the business forward and production will accelerate 'after the holidays'," he said, adding that some unsecured creditors needed to re-file their claims because of differences in their claim amounts.
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This was also because of the requirement of the new Companies Act 2016 now in force that superseded and replaced the old Companies Act 1965 under which some of the notices for the lawsuits were filed.The Winding-Up Notice has been gazetted confirming that the new threshold for the issuance of winding-up notice is now RM10,000. This is a significant increase compared with the existing RM500 threshold under Section 218 of the Companies Act 1965.
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Justice Douglas reminded the lawyers involved to comply with the requirements of the new Companies Act, which came into force on Jan 31, 2017. A winding-up petition must be filed by the creditor within six months from the expiry date of the statutory demand. Commencement date of winding-up is the date of the winding-up order.Under the new Companies Act 2016, Judicial Management (JM) is one of the options that provides temporary breathing space for a financially distressed company from creditor enforcement actions where there is reasonable probability of the rehabilitation of the company or full or partial preservation of its business as a going concern; or when JM better serves the interests of creditors than a winding-up.This was what Alex Decena, the lead counsel for Rabobank Nederland of Labuan Offshore Financial Centre, the secured creditor for SFI's assets – its plant and equipment hoped for, as well as Christina Liew, the lawyer for some 1,000 SFI workers seeking their outstanding dues wanted, so as not to jeopardise their claim cases before the Labour Court and in litigation.Another option is the Corporate Voluntary Arrangement (CVA) that provides an opportunity for a company to enter into a voluntary arrangement with its creditors provided that the company has sufficient funds to carry on business during the CVA moratorium period.S. Vanugopal asked for costs of RM5,000 each of every satisfied creditor who withdrew their petition after SFI settled their claims. His requests were awarded accordingly despite a protestation by a creditor's lawyer.His defence of SFI against winding-up by creditors was collaborated by Decena and Liew opposing premature winding-up as SFI's business potential is still viable.Decena explained that findings from an independent audit by a professional consultancy are being studied for the best option to resolve the issue before the court.Liew was hopeful that the Sabah Government holding two per cent shares after having sold off 98 per cent to the privatised entities demonstrates political will leadership to help the affected workers who have fought their RM23 million cases over a decade, with some having passed away or retired. A majority of them are Sabahan natives who still work with SFI in Sipitang.Under the new Companies Act 2016, the threshold of priority payment in respect of employees' wages has increased from RM1,500 to RM15,000 in a receivership or winding-up with recognition of employee social security contribution as part of the priorities with respect to contributions payable in a receivership or winding-up.Stay up-to-date by following Daily Express’s Telegram channel.
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