Ler Lum & Co

Scheme of Arrangement Pursuant to Section 176 of the Companies Act 1965 between Korakyat Plantations Sdn Bhd (In Liquidation) and the Purchasers for the Rehabilitation of Taman Perindustrian Subang Mewah.

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Korakyat Plantations Sdn Bhd (In Liquidation)
Official Press Release
3 March 2004

Scheme of Arrangement
Between
Korakyat Plantations Sdn Bhd (In Liquidation) and the Purchasers
Pursuant To Section 176 of the Companies Act 1965

A Rehabilitation – Malaysia Incorporated Approach

Construction work for the rehabilitation of Taman Perindustrian Subang Mewah, USJ 1, Subang Jaya is well in progress.

Taman Perindustrian Subang Mewah is an industrial property development project, consisting of 478 units of single to 2-storey terrace factories and 1½-storey semi-detached factories, with total original sales value of RM146 million.

Though commercially viable, the project was abandoned in 1998 due to the developer’s inability to continue its business as a going concern.

Through compromise and cooperation between the purchasers, financiers and the authorities, the Liquidators of the developer, Korakyat Plantations Sdn Bhd (In Liquidation) put forward a scheme of arrangement for the rehabilitation of the project – in the spirit of Malaysia Incorporated.

On 3 July 2003, the Kuala Lumpur High Court (Commercial Division) sanctioned the scheme which was devised under Section 176 of the Companies Act 1965. An overwhelming majority of the purchasers and financiers of the project earlier agreed upon the scheme on 20 December 2002.
Apart from resolving the financial problem faced by the project which has been abandoned since 1998, the scheme resolves the highly complicated legal aspect of the problem caused by security rights claimed by various financiers over the development land, which is a common problem faced by many abandoned property development project.

The scheme which is a compromise by the parties involved, essentially comprises the contribution of fund by purchasers and end-financiers to a rehabilitation account – the Escrow Account for the completion of Taman Perindustrian Subang Mewah, the full settlement of the amount owing to the chargee of the development land and consequently, its redemption.

The Liquidators view the scheme as a proactive and constructive approach in the winding-up of the Company and is the most efficient and fair way of addressing the position of creditors, in particular the purchasers, who would otherwise be limited to negligible or nil distribution in view of their unsecured position.

The scheme was also devised to meet the wider social objectives in reviving such abandoned projects facing various social and commercial complications, which in turn would bring benefit to all interested parties, whether directly or indirectly.

The Liquidators – Dr. Ler Cheng Chye and Mr. Lum Tuck Cheong of Messrs Ler Lum & Co. were appointed by Court as the Liquidators on 10 May 2000.

Affiliated worldwide with Jeffreys Henry International, an association of independent firms of business advisors, Ler Lum & Co. is a firm of Chartered Accountants providing a complete range of professional services in the areas of audit and business advisory, corporate recovery and taxation. Ler Lum & Co. is determined to play a positive role in revival of the country’s economy since the last economic crisis, focussing in turnaround through legal, commercial and financial remodelling of abandoned property development projects into viable and competitive projects in current economic environment.

Taman Perindustrian Subang Mewah is a pioneer benchmark project for a number of projects that is presently under the firm’s care. Details of the scheme can be obtained from the firm’s office or its website, www.lerlum-hlb.com.

The Liquidators anticipate that the success of the scheme would pave the way and become a model for the rehabilitation of other abandoned property development projects in the country, which normally face similar financial, legal, and commercial complications.

The Liquidators have been working closely with the authorities in the spirit of “Malaysia Incorporated”, a pragmatic policy introduced by the government to develop the country to achieve the aspirations of Vision 2020.

The Liquidators expressed appreciation to the authorities for their support and Yang Berhormat Datuk Lee Hwa Beng, the State Assemblyman of Subang Jaya Constituency for his views and support given throughout the period.

The project is expected to be completed by the end of 2004.

A relaunch of the project, to be officiated by the Menteri Besar of Selangor would be held on 6 March 2004 at the Taman Perindustrian Subang Mewah site.

Queries may be directed to:

Ms. Sharon Leng or Ms. Adelaine Amir
Messrs Ler Lum & Co.
B-3-11, Megan Avenue II
12, Jalan Yap Kwan Seng
50450 Kuala Lumpur.
Telephone: 03 2715 1555
Facsimile: 03 2163 4609
Project updates can be viewed at the website www.lerlum-hlb.com

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