Aathar Ah Kong Andrew v CIMB Securities: Review of Voluntary Arrangement Approval

In the High Court of Singapore, Aathar Ah Kong Andrew sought approval for a voluntary arrangement under the Bankruptcy Act. Several creditors, including CIMB Securities, Singapura Finance, and Citibank Singapore, applied to review and revoke the approval, alleging material irregularities and unfair prejudice. The court, presided over by Assistant Registrar Paul Tan, allowed the creditors' applications, revoking the approval of the voluntary arrangement and ordering that no further meetings be held, citing the debtor's lack of candor and the nominee's failure to properly scrutinize the debtor's statement of affairs.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Approval of the voluntary arrangement revoked; no further meetings to be held.

1.3 Case Type

Insolvency

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The High Court revoked the approval of a voluntary arrangement due to the debtor's lack of candor and the nominee's failure to scrutinize the statement of affairs.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Value Monetization III LtdRespondentCorporationApplication allowedWon
VMF3 LtdRespondentCorporationApplication allowedWon
Aathar Ah Kong AndrewApplicantIndividualApplication dismissedLost
CIMB Securities (Singapore) Pte LtdRespondentCorporationApplication allowedWon
Citibank Singapore LimitedRespondentCorporationApplication allowedWon
Singapura Finance LtdRespondentCorporationApplication allowedWon
Low See ChingRespondentIndividualApplication allowedWon
KGI Fraser Securities Pte LtdRespondentCorporationApplication allowedWon
Enterprise Fund II LtdRespondentCorporationApplication allowedWon
Enterprise Fund III LtdRespondentCorporationApplication allowedWon
Yio Swee KhimOtherIndividualNeutralNeutral

3. Judges

Judge NameTitleDelivered Judgment
Paul TanAssistant RegistrarYes

4. Counsels

Counsel NameOrganization
Sean La’BrooyColin Ng & Partners LLP
Jezer GohColin Ng & Partners LLP
Wong YipingPinnacle Law LLC
Aqbal Singh a/l Kuldip SinghPinnacle Law LLC
Ho Seng GiapTito Isaac & Co LLP
Ng Sze Yen CharmaineTito Isaac & Co LLP
Lim Sock Ngee PhyllisFabian & Khoo
Sean Lim Thian SiongHin Tat Augustine & Partners
Mohamed Zikri Bin Mohamed MumannilHin Tat Augustine & Partners
Soh Yu Xian PriscillaRajah & Tann Singapore LLP
Chow Chao Wu JansenRajah & Tann Singapore LLP
Lim Ke XiuHarry Elias Partnership LLP
Lim Poh ChooAlan Shankar & Lim LLC

4. Facts

  1. Mr. Aathar proposed a voluntary arrangement to his creditors.
  2. Several creditors applied to review the approval of the voluntary arrangement.
  3. Mr. Aathar made changes to the list of creditors and debt amounts.
  4. The nominee relied on Mr. Aathar's statement of affairs without scrutiny.
  5. The nominee allowed contingent creditors to vote for the full amount of their claims.
  6. The nominee excluded certain creditors from the meeting.
  7. Mr. Aathar failed to provide sufficient information regarding his liabilities and assets.

5. Formal Citations

  1. Re Aathar Ah Kong Andrew, Originating Summons (Bankruptcy) No 30 of 2016, [2017] SGHCR 4

6. Timeline

DateEvent
Originating Summons (Bankruptcy) 30 of 2016 filed
OSB 30 heard; interim order made; nominee appointed
Nominee filed report
Court ordered creditor's meeting
Notice of meeting sent to creditors
Creditors' meeting held; adjourned
Creditors' meeting held; voluntary arrangement approved
Hearing of applications to review the approval given at a creditors’ meeting
Hearing of applications to review the approval given at a creditors’ meeting
Applications allowed; approval of voluntary arrangement revoked

7. Legal Issues

  1. Debtor's duty of full and candid disclosure in voluntary arrangement
    • Outcome: The court held that the debtor failed to provide a full and candid picture of his liabilities.
    • Category: Substantive
    • Sub-Issues:
      • Transparency of proposal
      • Sufficiency of information provided to nominee
  2. Nominee's duties in voluntary arrangement
    • Outcome: The court held that the nominee breached his duties by failing to scrutinize the debtor's statement of affairs and improperly excluding creditors.
    • Category: Substantive
    • Sub-Issues:
      • Exercise of professional judgment
      • Scrutiny of debtor's statement of affairs
      • Adjudication of creditors' claims
  3. Material irregularity in creditors' meeting
    • Outcome: The court held that the breaches constituted material irregularities justifying the revocation of the voluntary arrangement approval.
    • Category: Procedural
    • Sub-Issues:
      • Lack of candor in statement of affairs
      • Failure to scrutinize statement of affairs
      • Improper admission/rejection of claims

8. Remedies Sought

  1. Revocation of Approval of Voluntary Arrangement
  2. Order that no further meetings be held

9. Cause of Actions

  • Review of Creditors' Meeting Decision
  • Material Irregularity
  • Unfair Prejudice

10. Practice Areas

  • Insolvency
  • Bankruptcy
  • Voluntary Arrangement

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Ltd and another appealCourt of AppealYes[2012] 2 SLR 213SingaporeCited regarding the duty to scrutinise debts listed by Mr Aathar in his SOA.
Andrew Fender v The Commissioners of Inland RevenueEnglish High CourtYes[2003] EWHC 3543 (Ch)England and WalesCited for the principles guiding the court in considering whether there was material irregularity in the matter.
Re a debtor (No 140 IO of 1995) sub nom Greystoke v Hamilton-SmithN/AYes[1996] 2 BCLC 429England and WalesCited for the development of the voluntary arrangement regime and the nominee's duties.
Re a Debtor (No 222 of 1990), ex p Bank of IrelandEnglish High CourtYes[1992] BCLC 137England and WalesCited for the principle that making a wrong decision to exclude or prohibit a vote gives rise to a material irregularity.

13. Applicable Rules

Rule Name
Bankruptcy Rules (Cap 20, R 1, 2006 Rev Ed)
Bankruptcy Rules (Cap 20, R 1, 2006 Rev Ed) r 75(3)
Bankruptcy Rules (Cap 20, R 1, 2006 Rev Ed) r 76
Bankruptcy Rules (Cap 20, R 1, 2006 Rev Ed) r 77
Bankruptcy Rules (Cap 20, R 1, 2006 Rev Ed) r 81(2)
Bankruptcy Rules (Cap 20, R 1, 2006 Rev Ed) r 84(4)
Bankruptcy Rules (Cap 20, R 1, 2006 Rev Ed) r 84(6)

14. Applicable Statutes

Statute NameJurisdiction
Bankruptcy Act (Cap 20, 2009 Rev Ed)Singapore
Bankruptcy Act (Cap 20, 2009 Rev Ed) s 45Singapore
Bankruptcy Act (Cap 20, 2009 Rev Ed) s 50Singapore
Bankruptcy Act (Cap 20, 2009 Rev Ed) s 54(1)Singapore
Companies Act (Cap 50, 2006 Rev Ed) s 210Singapore
UK Insolvency Act 1986 (c 45)United Kingdom
UK Insolvency Act 1986 (c 45) s 262United Kingdom

15. Key Terms and Keywords

15.1 Key Terms

  • Voluntary Arrangement
  • Statement of Affairs
  • Nominee
  • Creditors' Meeting
  • Material Irregularity
  • Full and Candid Disclosure
  • Contingent Creditors
  • Excluded Creditors

15.2 Keywords

  • Bankruptcy
  • Voluntary Arrangement
  • Creditors
  • Debtor
  • Nominee
  • Statement of Affairs
  • Material Irregularity

17. Areas of Law

Area NameRelevance Score
Voluntary Arrangement95
Insolvency Law90
Bankruptcy85
Restructuring and Insolvency80
Debtor's duties75
Nominee's duties75
Contract Law30
Guarantees and indemnities20
Guarantor20
Guarantee20
Affidavits15

16. Subjects

  • Bankruptcy
  • Voluntary Arrangement
  • Insolvency Law
  • Creditors' Rights