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Wednesday, December 21, 2011

Court: Ho Hup has no standing

PUTRAJAYA: The Court of Appeal has ruled that Ho Hup Construction Co Bhd has no locus standi to bring a legal action against its subsidiary Bukit Jalil Development Sdn Bhd, and Pioneer Haven Sdn Bhd, over a joint development agreement (JDA) on a 24.3ha land.

A three-member panel of the Court of Appeal comprising Justices Zainun Ali, Ramli Ali and Zaharah Ibrahim made the ruling unanimously, and as such, reversed the High Court decision which was in favour of Ho Hup Construction.

“On the issue of whether Ho Hup has locus standi in its own right to bring an action (against the appellants), our answer is in the negative.

“The directors that Ho Hup can restrain are the directors of Bukit Jalil Development only, not of Ho Hup itself, as the asset in question (the 24.3ha land) is the asset of Bukit Jalil Development,” Justice Zainun ruled yesterday.

The appellate court also ruled that the JDA between Bukit Jalil Development (a 70% subsidiary of Ho Hup Construction) and Pioneer Haven (a wholly-owned unit of Malton Bhd) did not amount to a disposal of the land.

“Unless and until the land is registered in the name of Pioneer Haven, the land remains the property of Bukit Jalil, which has indefeasible title over the land,” Justice Zainun ruled.

It was previously reported that Ho Hup had entered into the JDA (via Bukit Jalil Development) with Pioneer Haven on March 16 last year, with a plan to see the partners jointly develop the freehold land in Bukit Jalil into a mixed commercial and residential project.

Later that year, Ho Hup filed the suit against Bukit Jalil Development, Pioneer Haven and nine others over the matter.

In June this year, the Kuala Lumpur High Court had ruled that Ho Hup's previous board of directors had acted in breach of its duties to Ho Hup by committing Bukit Jalil Development to the JDA, and that Pioneer Haven had knowingly assisted in those breaches.

The High Court had found that the JDA was, in substance, a disposal of the land, and as such, required the approval of shareholders under Section 132C of the Companies Act, 1965.

As no such approval was obtained, the High Court ruled that the JDA was null and void, which would enable Ho Hup Construction to proceed with its financial regularisation plan, which had been delayed pending the outcome of the suit.

Pioneer Haven and seven others then appealed against the High Court decision.

Representing Pioneer Haven was counsel Datuk Seri Muhammad Shafee Md Abdullah, while lawyer Malik Imtiaz Sarwar stood for Ho Hup Construction.

Ho Hup told Bursa Malaysia yesterday that it would be filing an appeal to the Federal Court.

“Meanwhile, the Court of Appeal has given Jan 30, 2012, as the hearing date for an application to be filed by Ho Hup for an order for the preservation of the rights and interests of Ho Hup,” it said.

By The Star

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