Court places PRG Holdings under interim judicial management amid boardroom feud, debt dispute

KUALA LUMPUR (Sept 3): PRG Holdings Bhd (KL:PRG) has been placed under interim judicial management by the Kuala Lumpur High Court, amid an escalating boardroom feud and a debt dispute with its largest shareholder, Datuk Ng Yan Cheng.

The court appointed Andrew Heng and Ashvin Mahendran of Baker Tilly Insolvency PLT as the joint interim managers (IJMs) under a sealed order dated Aug 26, PRG said in a bourse filing on Thursday.

The move effectively stripped its board of directors and management of their powers, though they remain bound to fulfill statutory compliance duties, said the Main Market-listed company that is involved in property development, construction and manufacturing of elastic textiles, webbings and metal components.

The interim order will remain in effect until the court hears and disposes of the company's application for a full judicial management order. The application is scheduled to be heard on Sept 21.

The appointment of the IJMs is not expected to cause an immediate cessation of business operations, which will continue under their supervision, said PRG.

The company applied for judicial management on Aug 3 to secure a corporate rescue mechanism and legal moratorium after it was served a winding-up petition by Ng on July 24.

Ng, who holds a 16.6% stake in the company, had demanded the immediate repayment of an alleged RM21.22 million debt after restructuring negotiations failed.

The dispute is linked to a payment battle over the Picasso Residence, a condominium project in Kuala Lumpur, for which PRG's construction arm, Premier Construction (International) Sdn Bhd (PCI) was the main contractor.

It initiated winding-up proceedings to recover RM64.24 million in unpaid construction bills from the developer, Premier De Muara Sdn Bhd (PDM) — a company linked to Ng — after an earlier proposed debt settlement between the two parties was terminated.

The proposed deal, which would have seen PDM transfer 12 condo units at Picasso Residence valued at RM13.73 million to partially offset the debt, was terminated in May after PRG accused PDM of failing to disclose its connection to Ng, as well as a separate court judgement against the developer.

The fallout triggered a tussle for control of the company, with substantial shareholder Datuk Sheah Kok Fah requisitioning an extraordinary general meeting to remove Ng's son-in-law, Andrew Chan Lim-Fai, as group managing director over alleged corporate governance concerns. Chan subsequently stepped down from the post and as executive director on July 13. 

Ng then initiated a winding-up petition against PRG, citing the alleged RM21.22 million debt.

According to the interim order, the IJMs cannot compromise, settle, discontinue or dispose of PCI's winding-up restriction against PDM without prior notice and leave of the court. The interim judicial managers are also required to report the status of the petition at the next case management.

PRG shares closed unchanged at 8.5 sen on Thursday, valuing the company at RM42 million. The stock is little changed from a year ago.

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