This article first appeared in The Edge Malaysia Weekly on January 10, 2022 - January 16, 2022

The Jan 5 Federal Court decision that a company undergoing liquidation does not have to be delisted upholds the spirit of the exchange’s listing requirements rather than merely the letter of the law.

“As long as the wound-up company remains listed, the liquidator, being the controlling person of the company, has to comply with the AMLR (Ace Market Listing Requirements),” said Federal Court Judge Datuk P Nalini, who chaired the three-member bench that allowed an appeal by Bursa Malaysia against the Court of Appeal’s (COA) decision in January last year that a wound-up company should be delisted.

The other judges on the bench were Federal Court justices Puan Sri Zaleha Yusof and Datuk Rhodzhariah Bujang.

The company in question is Wintoni Group Bhd, which went into liquidation in 2017.

Bursa’s Listing Committee had taken action against the liquidator Datuk Mohd Afrizan Husain for alleged breaches of the AMLR, or Main Market Listing Requirements (MMLR), for causing and permitting delay in the announcement or issuance of the quarterly or annual report of Wintoni. The action was certified by the exchange’s Appeals Committee.

Bursa had claimed that Afrizan failed to comply with the MMLR. However, his lawyers argued that the Companies Act prohibits him from complying.

Under the Companies Act, only directors can prepare the company’s accounts. But since the company was wound up, the directors had lost their powers, argued Afrizan’s lawyers.

The COA upheld the High Court’s decision in allowing Afrizan’s judicial review of Bursa’s Listing Committee and Appeals Committee.

The COA three-member bench led by Justice Datuk Lau Bee Lan ruled that the language used in Rule 16 (2) of MMLR makes it clear that the delisting is mandatory, and the exchange does not have the discretion to maintain the company’s listing status.

Last Wednesday (Jan 5), Justice Nalini said as the AMLR requires financial statements of the listed company to be prepared, the liquidator has to comply with or ensure compliance with the requirement. Furthermore, the directors of a wound-up company cannot do anything without the consent or authorisation of the liquidator who is in control of the company, she added.

In a nutshell, the wound-up companies, which will not be delisted immediately, are obliged to file financial accounts and annual reports so that shareholders and the investing public will be able to scrutinise these listed firms’ financials.

Clearly, that is in the interest of transparency and good governance. Perhaps the investing public may even be able to find out what went wrong at Wintoni and why it fell into liquidation in the first place.

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