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Case Update: Liquidators must ensure compliance with listing requirements while Company remains listed

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15 April 2022

COMPANY LAW
Company – Listed Corporation – ACE Market – Bursa Malaysia Securities Berhad – Listing Requirements – Winding Up – Liquidator – Financial Statement 

Bursa Malaysia Securities Berhad v Mohd Afrizan Bin Husain
[2022] 1 LNS 487 | Federal Court
- see the grounds of judgment here

Facts Mohd Afrizan (‘Respondent’) was appointed as the liquidator of Wintoni Group Berhad in a winding up order in 2017. Through a letter of undertaking in the same year, the Respondent agreed to comply with the ACE Market Listing Requirements (‘AMLR’) in consideration of Bursa Malaysia (‘Appellant’) allowing the continued listing of Wintoni on the Official List. However, the Respondent failed to comply with the AMLR as Wintoni had failed to announce its relevant financial statements. To add, the Respondent maintained that at the material time since Wintoni had ceased operations, he would not prepare the relevant financial statements. The Appellant then proceeded to issue a requisite notice together with a Listing Committee (‘LC’) memo, giving notice to the Respondent on the proposed enforcement action against him and specifying the nature and particulars of his breach of the AMLR. The LC imposed a public reprimand on him and directed him to do the necessary to ensure the announcement/issuance of the Financial Statements. Dissatisfied, the Respondent instituted a judicial review proceeding in respect of the decisions of the LC. The High Court allowed the Respondent’s judicial review application. Subsequently, the Appellant obtained a stay of execution of the High Court order until the disposal of their appeal to the Court of Appeal. The Court of Appeal unanimously dismissed the Appellant’s appeal and affirmed the decision of the High Court. Hence this appeal at the Federal Court

Issue 1. Whether, on a proper construction/interpretation of the Listing Requirements, there was a mandatory obligation on the Appellant to immediately and summarily de-list a listed corporation upon the listed corporation being served with a winding-up order without any room for the exercise of discretion; and

2. Whether the liquidator of a wound-up listed corporation has the power and/or duties to comply with and/or ensure compliance by the listed corporation with the Listing Requirements.
 
Held In unanimously allowing the appeal, YA Datuk Nallini Pathmanathan in delivering the judgement of the Federal Court held that Rule/Paragraph 16.11(2) of the AMLR which states that “the Exchange shall de-list a listed corporation… upon a winding-up order being made against a listed corporation” is to be afforded a purposive interpretation such that there is no mandatory obligation on Bursa Securities to immediately de-list a listed corporation in liquidation upon a winding-up order being made at first instance. Instead, Bursa Securities, whose primary duty is to protect the interest of the public investors under the Capital Markets and Services Act 2007, has the discretion to defer the de-listing of a listed corporation in liquidation until all legal challenges/appeals against the winding-up order have been exhausted. Further, the Federal Court held that where a wound-up corporation continues to be listed, the liquidator who is the person in control of the listed corporation must comply with and/or ensure compliance by the listed corporation with the Listing Requirements.

Zul Rafique & Partners
{15 April 2022}

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