KUALA LUMPUR (Oct 25): Some 600 employees of Utusan Melayu (M) Bhd under a voluntary separation scheme (VSS) who are still owed nearly RM60 million in backdated wages and benefits are considered beneficiary trustees of the properties, and not creditors, High Court judge Nadzarin Wok Nordin ruled on Tuesday (Oct 25).
“This court found all the properties of Utusan are to be included and added to the said definition of trust properties, I am satisfied that in this case before me, the elements of a trust has been proven and therefore, a trust can be said to be implied.
“As the court viewed that the VSS employees who are involved in the VSS exercise are beneficiaries of the trust properties, they stand outside the liquidation process and are entitled to the benefit of the trust properties,” the judge said.
His decision, delivered via email, was sighted by theedgemarkets.com.
As trustees, the employees therefore have the right to be paid ahead of the creditors.
Nadzarin noted there were only eight payments made by Utusan Melayu — formerly controlled by Umno — to staff who took the VSS prior to a creditors voluntary liquidation (CVL) exercise dated Oct 7, 2019.
“There is still an outstanding amount of RM59,403,367.97 pursuant to the VSS. Only 593 VSS employees have filed their proof of debt (POD) with the liquidator,” he said.
Nadzarin said he had seen the VSS terms which required a total of 12 payments over a period of 12 months, and the payments to be made to the VSS employees after statutory deductions, debt owing, and other official processes were completed.
The judge noted that a letter dated Oct 8, 2019, by Utusan Melayu chairman Datuk Abdul Aziz Sheikh Fadzir stated that an agreement had been arrived at whereby the payments of the VSS would be made using funds obtained from the sale of Kumpulan Utusan, or Utusan Group, assets. Nadzarin said that the background is evidence of the purported commitment by the plaintiff (company) to settle the VSS payments from the sale of the Utusan Group's assets.
He said the net proceeds (from the sale of Utusan Group’s assets) after deducting the necessary and compulsory payments such as real property gains tax, quit rent, assessment, liquidators fees, legal fees and miscellaneous payments on the sale less redemption sum ought to be paid to Messrs Lavinia Dell Akbar, Tee & Partners and failing that, Messrs Azmi & Associates as stakeholders for the VSS employees.
It was previously reported that Utusan Melayu had a debt of RM323.98 million owed to secured and priority creditors, which sought the liquidation of Utusan Melayu's assets to pay the outstanding debt and other commitments, the documents further stated.
Consequently, in December 2019 the High Court (commercial division) approved the appointment of Datuk Tee Guan Piam as liquidator for Utusan Melayu, which is undergoing a voluntary winding up. Utusan Melayu sought the application to get court approval for the liquidator to undertake the exercise. Altogether, there are 29 assets or properties which are listed to be sold.
In September 2018, it was reported that Utusan Melayu had offered VSS to its staff, but the company subsequently faced problems in continuing payment to employees under the VSS scheme after its creditors applied for liquidation of its assets in 2019, prompting the employees to intervene in the winding-up process.
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