Affidavit filed in court revealed that the total assets of PCB and PCBD amounts to approximately RM1.33 Billion which was not disclosed in the scheme of arrangement where the company has misrepresented its financial position and potentially committed financial statement fraud.
An affidavit filed at Ipoh high court by former PCB CEO Mohamed Shafeii on 31 May 2021 has revealed that the total assets of PCB and PCBD amounts to approximately RM1.33 Billion was not disclosed in the scheme of arrangement where the scheme approved in April 2021.
PCB and PCBD has removed the financial institutions creditors from the scheme which was initially included in the scheme when the first scheme was drafted and proposed to the initial creditors.
By removing the financial institutions creditors, the remaining non financial institutions creditors are mainly realated companies of PCB and PCBD to achieve the required 75% votes of approval.
PCB and PCBD also misrepresented the company’s financial position in its scheme of arrangement that the company is not in a position to repay the debt and proposed to write down the debt to 90% or paying just 10 cents for every RM1 of debts. The misrepresentation of company’s financial position is a serious act of oppression against the company’s creditors and JV partners and the company has also potentially committed financial statement fraud.
PCB and PCBD also mistreated the company joint venture partners by categorising them as creditors under the scheme of arrangement. Following the unfair treatment of the joint venture partners, one of the JV partners ARX Holdings Sdn Bhd and ARX-YSC Sdn Bhd has filed. an intervention in the high court and subsequently won the intervention.
The high court has ruled in favour of ARX Holdings Sdn Bhd and ARX-YSC Sdn Bhd and ordered PCB and PCBD to remove them from the scheme of arrangements and to be recognised as joint venture partners.
Following the high court ruling against PCB and PCBD, if other creditors under the scheme bring this case to the court, it is probable that the court will appoint a liquidator against PCB and PCBD for the failure to repay its debt and the company would be put under administration and the company’ strategic assets and landbanks would be auctioned off cheaply.
I urged the state government to take this issue seriously and to state its position whether the state government is aware and agreeable to the scheme of creditors which was approved mainly by the intercompany creditors in April.
I was informed that one of the company creditors which was treated unfairly is in the process of filing a suit in the court against its unfair treatment of debts. And if they succeed, the state might stand to lose a public listed company and the company’s strategic assets.