Financially-distressed Jepak seeks judicial management

KUALA LUMPUR (March 13): Jepak Holdings Sdn Bhd, the company that was initially awarded an RM1.25 billion solar hybrid project involving 369 schools in rural Sarawak which is central to Datin Seri Rosmah Mansor’s graft trial, is now seeking judicial management to fix its financial problems.

This application was filed at the High Court here in January following winding-up petitions made by two companies who are sub-contractors of its project.

Judicial management is a method of debt restructuring where a qualified insolvency practitioner is appointed as an independent judicial manager to rehabilitate a financially-troubled company.

Once a court order for judicial management is granted, a moratorium will be put in place to prevent legal action from being initiated against the company, as well as from it being wound up.

In Jepak's ex-parte originating summons, it wanted the court order to appoint one Datuk Mohd Afrizan Husain as the judicial manager for a period of six months and for the present winding-up petitions to be dismissed.

Jepak landed in trouble when the Ministry of Education (MoE), which had awarded the company the solar power hybrid project in a contract dated June 20, 2017, set up a task force in Oct 2018 to investigate allegations that it forged the signatures and seals of school principals to make fraudulent claims from the Ministry.

“As a result of this, the MoE had stopped paying Jepak and this led the company to be unable to continue with the project,” it said in papers filed in the High Court which were sighted by theedgemarkets.com.

“The Ministry issued a termination notice dated Oct 2, 2019 but in the meantime throughout the year, it found a white knight to continue with the project,” the court documents stated.

At the same time, Jepak had commenced legal proceedings to claim RM7.8 billion against MoE's asset management division and the Malaysian Government for purportedly terminating the contract unlawfully.

MastiJaya Sdn Bhd, one of the companies petitioning to wind up Jepak, sought to intervene in the company’s application for judicial management.

Meanwhile, Tenaga Nasional Bhd’s TNB Repair and Maintenance Sdn Bhd, which is another creditor of Jepak which is owed RM43 million, was allowed by the High Court judicial commissioner Nadzarin Wok Nordin to intervene in Jepak’s application and bring its dispute over the debt to arbitration.

Nadzarin also heard submissions from Jepak's counsel De Zhen Shim, who opposed MastiJaya's application to intervene in the company's application.

Meanwhile, MastiJaya was represented by Datuk Wong Rhen Yen.

The court has fixed March 24 for its decision on MastiJaya's application to intervene and also to hear Jepak's application to appoint a judicial manager.

Besides MastiJaya, another company named BHJ Enterprise Sdn Bhd also has a winding-up order on Jepak Holdings.

Rosmah is facing graft charges for accepting a total of RM6.5 million and soliciting RM187.5 million from former Jepak managing director Saidi Abang Samsudin, in exchange for allegedly helping the company clinch the project.

Click here for more property stories