OCBC vs KS Energy: Interim Judicial Management under IRDA for Insolvency

Oversea-Chinese Banking Corporation Limited (OCBC) applied for interim judicial management for KS Energy Limited (KSE) and KS Drilling Pte Ltd (KSD) under Section 91 of the Insolvency, Restructuring, and Dissolution Act 2018 (IRDA). The High Court of Singapore, presided over by Aedit Abdullah J, granted the orders on 18 September 2020, citing the companies' insolvency, loss of confidence in management, and the potential for a more advantageous realization of assets under judicial management.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Orders sought granted.

1.3 Case Type

Insolvency

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court grants interim judicial management for KS Energy and KS Drilling due to insolvency and loss of confidence in management.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Oversea-Chinese Banking Corporation LimitedApplicantCorporationOrders sought grantedWon
KS Energy LimitedRespondentCorporationInterim Judicial Management OrderedLost
KS Drilling Pte LtdRespondentCorporationInterim Judicial Management OrderedLost

3. Judges

Judge NameTitleDelivered Judgment
Aedit AbdullahJudgeYes

4. Counsels

Counsel NameOrganization
Sarjit Singh GillShook Lin & Bok LLP
Hoang Linh TrangShook Lin & Bok LLP
Daniel Tan Shi MinShook Lin & Bok LLP
Nair Suresh SukumaranPK Wong & Nair LLC
Tan Tse Hsien BryanPK Wong & Nair LLC
Foo Li-Jen NicolePK Wong & Nair LLC

4. Facts

  1. KSE is a publicly listed company on the Main Board of the Singapore Exchange.
  2. KSE Group provides services to the global oil and gas industry.
  3. The applicant bank holds about 61.14% of KSE’s total liabilities.
  4. Between 2016 and 2019, the KSE Group faced financial difficulties.
  5. Mr. Kris Wiluan was charged with 112 charges for engaging in false trading and market rigging of KSE shares.
  6. The applicant has lost confidence in the management of KSE and KSD.
  7. KSD is burning through slightly over US$1,000,000 per month in manpower and maintenance costs.

5. Formal Citations

  1. Re KS Energy Ltd and another matter, , [2020] SGHC 198

6. Timeline

DateEvent
Term loan dated granted by the applicant to KSD
Bridging loan of S$5,000,000 granted by the applicant to KSD
12-month debt moratorium on Jumbo loan begins
Deed of amendment and restatement dated
Supplemental letter dated
12-month debt moratorium on Jumbo loan ends
Mr Kris Wiluan charged with 112 charges
Hearing date
Orders sought granted

7. Legal Issues

  1. Interim Judicial Management
    • Outcome: The court granted the order for interim judicial management.
    • Category: Substantive
    • Related Cases:
      • (1987) 3 BCC 124
      • [2012] BusLR D91
      • [1992] SGHC 212
  2. Insolvency
    • Outcome: The court found that there was a very clear case of balance sheet insolvency.
    • Category: Substantive

8. Remedies Sought

  1. Order for interim judicial management

9. Cause of Actions

  • No cause of actions

10. Practice Areas

  • Insolvency
  • Restructuring
  • Corporate Law

11. Industries

  • Oil and Gas
  • Finance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Re a Company (No. 00175 of 1987)N/AYes(1987) 3 BCC 124N/ACited for the principle that an order for IJM is appropriate where there is a prima facie case for judicial management and the company's assets are in jeopardy.
In Re Switch Services Ltd (In Administration)N/AYes[2012] BusLR D91N/ACited for the principle that it is not a prerequisite to the grant of an order for IJM that all the criteria for the granting of a judicial management order are satisfied
Re Stephen Eric Consultants Pte LtdHigh CourtYes[1992] SGHC 212SingaporeCited for the principle that the appointment of a provisional liquidator was held to be justified not only to protect the Company’s assets but also to ensure that it [was] properly run and managed pending the hearing of the winding up petition

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Section 91 of the Insolvency, Restructuring, and Dissolution Act 2018Singapore
Section 89(1) of the Insolvency, Restructuring, and Dissolution Act 2018Singapore
Section 92 of the Insolvency, Restructuring, and Dissolution Act 2018Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Interim Judicial Management
  • Judicial Management
  • Insolvency
  • IRDA
  • KSE Group
  • Balance Sheet Insolvency
  • Super-Majority Creditor

15.2 Keywords

  • Insolvency
  • Judicial Management
  • Interim Judicial Management
  • Singapore
  • IRDA
  • OCBC
  • KS Energy
  • KS Drilling

17. Areas of Law

Area NameRelevance Score
Insolvency Law95
Judicial Management90
Interim Judicial Management90
Restructuring and Dissolution85
Bankruptcy60
Company Law50

16. Subjects

  • Insolvency Law
  • Corporate Restructuring
  • Judicial Management