KUALA LUMPUR (March 31): The High Court (commercial division) has fixed April 15 to deliver its decision on whether to allow P2 Asset Management Sdn Bhd to amend its statement of claim or allow the application to strike out the amended claim by defendants Entomo Malaysia Sdn Bhd, Revolusi Asia Sdn Bhd and MySJ Sdn Bhd.
The case concerns the purported dispute over the shareholders' agreement between P2 Asset Management and Revolusi Asia to acquire a 10% equity stake in the latter, which in turn holds a 100% stake in MySJ Sdn Bhd.
Justice Datuk Ahmad Fairuz Zainol Abidin heard submissions on Thursday afternoon from P2 Asset Management to amend its statement of claim and the objections made by Entomo, Revolusi Asia and MySJ to the amendment and their application to strike it out.
"After hearing submissions, I will deliver my decision on this matter via email on April 15," the judge said.
Entomo, along with Revolusi Asia and MySJ, in the proceedings on Thursday had initially objected to the presence of the media, arguing that the proceedings were held in chambers, and only have to do with the shareholders' dispute and not the MySejahtera app as a whole.
However, Justice Ahmad Fairuz allowed the presence of the media in the online zoom proceedings, as it was a matter of public interest.
P2 Asset Management had originally filed the original writ and statement of claims on Nov 24 last year. It filed the amended statement of claim on Jan 22, after some of the defendants had already filed their statement of defence.
Hence, the defendants sought to strike out the amended statement of claim.
MySJ had even filed a striking out application of the original statement of claim on Dec 24 last year, arguing there was no reasonable cause of action against it and that P2 Asset Management could continue on with the legal action against Entomo and Revolusi Asia, but not MySJ.
This resulted in P2 Asset Management filing the amended statement on Jan 22.
P2 Asset Management counsel Nagarajah Muttiah submitted that the amended statement should be allowed as no rules were violated, while all Rules of Court 2012 had been met with regards to the amendment.
He added that there was no mala fide (bad intention), tactical manouvre or delay in finding the amended statement, hence the plaintiff was entitled to make the changes.
Defendants say writ of summons should also be changed
Counsel Ashok Kandiah for Entomo and Revolusi Asia, along with Razlan Hadri Zulkifli for MySJ, argued that the writ of summons — which was originally filed on Nov 24 — was not changed despite the additional claims made in the new statement, which is a violation of court rules as the plaintiff is allegedly making new facts or cause of action, which it had not previously pleaded in the writ.
“It had changed the nature of the legal action and this had further prejudiced our clients. What they should do is withdraw the amended [statement], file a new writ and new [statement],” Ashok Kandiah said.
A writ of summons is basically a legal document, to inform the defendants in this of the suit and the nature of the action. The writ must be endorsed with a SOC or a concise statement of what your claim or the relief or remedy the plaintiff sought with sufficient information and particulars for the defendant to respond.
What is the suit about?
Entomo had submitted a proposal to the Malaysian government in April 2020 for a mobile application-based solution using a software known as KPISoft to develop what is now known as the MySejahtera app.
With the application, it allows users to perform health self-assessment, monitor health conditions, and track the movements of the population, thereby enhancing the efficiency of the contact-tracing exercise. In addition, it also became the official channel to support the National Covid-19 immunisation programme.
According to P2 Asset Management's statement of claim, Entomo does not want to offer the software on a corporate-social responsibility basis and is said to be determined to make business profit from it.
On Sept 17, 2020, Revolusi Asia was incorporated and three days later, it entered into an agreement with Entomo where Revolusi Asia would hold all the shares of MySJ, making it its nominee.
On Sept 23, 2020, MySJ was incorporated and at that time, all shares of MySJ were held by Revolusi Asia.
On Oct 6, 2020, MySJ entered into an agreement with Entomo to transfer the intellectual property of the MySejahtera app. Entomo would grant the licence for the software and MySJ would have to pay RM338.6 million, being the aggregate fees for the transfer of intellectual property and licensing fees, for the software.
Between November and December 2020, Entomo is said to have proposed a commercial model to the government, but the government did not make any affirmative decision and hence, there was fear MySJ would default its obligation under the licensing fees.
P2 Asset Management entered into the fray, where Revolusi Asia entered a share sale agreement with P2 Asset Management on Dec 31, 2020. That agreement would see Revolusi Asia transfer its 10% stake in MySJ to P2 Asset Management, where it is agreed that the latter would endeavour to obtain a letter of award (LOA) from the Malaysian government.
Subsequently, P2 Asset Management is to pay in three tranche payments to Revolusi Asia, namely:
(a) RM10 million within 7 business days from share agreement on Dec 31, 2020,
(b) another RM9.2 million within 21 business days from Dec 31, 2020, and
(c) RM76.8 million within 90 business days from the date of the LOA.
In April 2021, the Cabinet approved the continued use of the app by way of a service contract and delayed the full commercialisation of the app. In May 2021, this was extended to Sept 2, 2021.
Following that, P2 Asset Management felt that a supplemental agreement was necessary to amend the arrangement as to the payment of the third tranche as it could not proceed without the LOA. However, P2 Asset Management claimed that Entomo needed money and it paid RM12.2 million as of July 19, 2021.
Sometime later that month, Revolusi Asia was said to have approached another company, Hasrat Budi Sdn Bhd, to also acquire MySJ shares. Sometime in Sept 7, 2021, Revolusi Asia terminated its share agreement with P2 Asset Management.
Hence, P2 Asset Management is among others claiming a declaration that Entomo, Revolusi and MYSJ had committed a tort of conspiracy against it and that the shareholders agreement it signed is valid, binding and in full force.
It is also demanding special, aggravated or exemplary damages of RM5 million and general damages to be assessed by the court.
Concerns have mounted over the commercialisation of MySejahtera, as it involves the personal data of millions of people in Malaysia and usage without their consent.