Meeting With The Director Of The Kuala Lumpur Administration Unit Of The Malaysian Department Of Insolvency

Dear Members of the Kuala Lumpur Bar,

On 15 December 2021, the Kuala Lumpur Bar Committee Civil Practice & Court Liaison Committee (“KLBC CPCLC”) held a meeting with the Director of the Kuala Lumpur Administration Unit of the Malaysian Department of Insolvency to discuss feedback raised by members pertaining to the administration of insolvency matters. The Kuala Lumpur Insolvency Department (“KLID”) has also highlighted several issues for our attention. The KLBC CPCLC was represented by its Chairperson Nimalan Devaraja.

We set out below a brief summary of the matters discussed during the said meeting:

1. Delay By KLID In In Responding To Request For Refund Of Deposit
   
   The KLID responded that they cannot process the request for a refund of the deposit promptly due to lawyers not serving the required documents together with the request. This has resulted in the delay as refunds can only be processed once all documents are provided.Click here for a checklist of the relevant documents required to be submitted together with a request for a refund. For further inquiries, pertaining to the deposit refund process, kindly email to :i) shafik.zuhaini@mdi.gov.my (Bankruptcy)
   ii) norazuin.harun@mdi.gov.my (Liquidation)
2. Delay By KLID In Responding To Inquiries

   The KLID had informed us that steps were taken to respond to inquiries as promptly as possible. However, delays may occur because the inquiries are not made to the relevant persons and/or where the officers dealing with the matter have left KLID.In such situations, members raise their issues directly to the respective person in charge from the KLID for assistance. The details of said persons are set out below:
   i) syifa.baharom@mdi.gov.my (Bankruptcy)
   ii) nasuha.halim@mdi.gov.my (Liquidation)

3. To Upgrade The System To Conduct Bankruptcy Search And Winding Up Search

   The CPCLC raised that the official system for bankruptcy searches and winding up searches was not updated promptly even after the Receiving Order and Adjudication Order (AORO) and/or Winding Up Order was served.The KLID explained that the delay in updating the system was because the KLID requires the sealed Court Order to be served first before the process can be undertaken.Further, the KLID informed us that they are no longer able to check the MyIdentity system and are now fully reliant on the sealed Court Orders for the details of the relevant individuals/companies. Accordingly, the KLID has asked us to inform members to ensure that all the information in the sealed Court Orders, including but not limited to the Judgment Debtors Identity Card/Company Registration Number are accurate when commencing proceedings.

4. Delay By KLID In Realising The Debtor’s Assets Despite Information Being Provided By The Creditors

   The KLID informed us that as standard operating procedure, action was taken promptly upon the receipt of material information in order to realise the assets of any judgment debtor.Accordingly, the KLID had asked us to provide them with detailed information of any specific instances when there have been delay in the realisation of assets after the KLID had been provided with information on the Judgment Debtor’s assets. Members who are facing such situations with the KLID are to send the relevant information and supporting documents to the secretariat at noratikah@klbar.org.my latest by 21 January 2022. The CPCLC will collate all the information on relevant matters and all information collated will be referred to KLID for their attention and further action.

5. Touting At The KLID CountersThe KLID reported to us that there have been acts of touting being undertaken at the KLID officers by lawyers and/or law firms. The KLID views this matter seriously and are very concerned about the increase in such acts.We strictly remind/advise any member of the Bar who tout to immediately cease such practice. The Kuala Lumpur Bar Committee will not hesitate to take legal action against anyone involved in such activities.
6. Signing Of S&P For Charged Property (Hartanah Bercagar)

   The KLID informed us that they have no authority to execute agreements pertaining to the sale and purchase of properties charged as security. It is for the lawyers to liaise with the respective chargors as it is within their discretion/authority as the collateral holder. There is therefore no need to delay the process by attempting to first get clearance/official confirmation from KLID to execute the agreement.

7. Filing Of Proof of Debt (POD) With The Assets

   Lawyers representing secured creditors are advised to file a POD with a Statement of Accounts excluding the charged assets if the assets have been sold. We have been informed that there are situations where lawyers are still proceeding to file PODs even though the secured assets have been sold. This resulted in a lengthy process as the KLID needs to seek clarification from the lawyers before they can take further action.Do note, filing POD with assets means the charge property has been handed over to the KLID for sale.

8. Notis Bantahan Sent By Email

   Lawyers are reminded that all Notis Bantahan must be physically served at the KLID counter and that submission by email will not be entertained and/or is only for follow-up purposes. The process for consideration of the Notis Bantahan will take approximately 21 days.

Vivekananda Sukumaran
Chairman
Kuala Lumpur Bar Committee

Nimalan Devaraja
Chairperson
Civil Practice & Court Liaison Committee