Legal questions on the Scomi Group Judicial Management Application
First, the Scomi Group application raises this question: can a listed company apply for judicial management?
Section 403(b) of the Companies Act 2016 essentially provides that all the provisions on judicial management cannot apply to the following:
(b) a company which is subject to the Capital Markets and Services Act 2007.
The Companies Commission of Malaysia disqualifies all listed companies from using the judicial management provisions, as listed Co's are subject to the Capital Markets and Services Act 2007.
Amendment to the Companies Act 2016 recognised this:
77. Currently, the benefit of judicial management is not available to companies which are regulated under CMSA 2007 including listed companies. The proposed amendment would assist all companies facing financial difficulties including listed companies an avenue to rehabilitate their situations through judicial management.
Second, Scomi Group has SECURED CREDTORS
Under section 409(b) of the Companies Act 2016, any secured creditor can exercise a veto against the judicial management application.
Section 409(b) reads:
” … the Court shall dismiss an application for a judicial management order if it is satisfied that
(b) the making of the order is opposed by a secured creditor.”