ACE Holdings’ legal woes grow with new RM10m suit filed by 27 investors

• They claim that since last year, they had separately tried to redeem their investments, but ACE Holdings had replied that since its operations were badly affected by the Covid-19 pandemic, payments would be delayed.

KUALA LUMPUR (May 2): Twenty-seven investors, including Tat Hin Precision Engineering Sdn Bhd, have filed a suit seeking almost RM10 million against beleaguered ACE Holdings Bhd.

Almost all of the investors who filed the suit hail from Penang, except for one each from Subang Jaya, Cyberjaya, and here.

So far, this is the largest group of plaintiffs suing ACE Holdings. They filed the suit at the High Court (Commercial division) through Messrs Chan Eng & Co on March 28 this year.

The plaintiffs claimed that they had separately entered into a private placement memorandum and share subscription agreement for the issuance of 9.6 million preferential shares to them between June 2017 and December 2020.

As part of the agreement, the plaintiffs alleged that they will enter a sum for commitment which is fully redeemable after five years, with promises of annual returns of 12% to be paid at a rate of 6% on a semi-annual basis.

They had invested between RM200,000 and RM1.15 million each, according to the statement of claim sighted by The Edge.

The plaintiffs claimed that after reading the offer, they believed they would get the 12% annual return on investment and decided to enter into the agreements with ACE Holdings.

They claim that since last year, they had separately tried to redeem their investments, but ACE Holdings had replied that since its operations were badly affected by the Covid-19 pandemic, payments would be delayed.

The plaintiffs claimed that the response by ACE Holdings was against the terms of the private placement memorandum and the share subscription agreement, and that the company had failed to pay back their investments on the purported maturity date, as well as the accrued dividends since last year.

Hence, they are seeking a return of their investment in addition to the accrued dividends that is entitled to them. The almost RM10 million sum does not include the accrued interests claimed from ACE Holdings.

The case was called for case management on Tuesday (May 2) before High Court senior assistant registrar Anith Farhana Azman, who fixed May 18 for the case to be case managed again via e-review.

ACE Holdings also entered an appearance in the suit and will be represented by the firm of Messrs Shahrizat, Rashid and Lee.

Earlier, ACE Holdings had filed a judicial management petition which is fixed for hearing before High Court judge Ahmad Murad Abdul Aziz on May 17.

Judicial management is a corporate rescue mechanism, where companies apply with the High Court to appoint a judicial manager for them when they are unable to pay their debts, creditors or directors.

ACE Holdings is facing action from the Securities Commission Malaysia for its recent attempt to take over Apex Equity Holdings Bhd, as well as suits from several investors over its failure to deliver investment returns.

The company is seeking for Datuk Robert Teo Keng Tuan from RSM Corporate Restructuring (Malaysia) Sdn Bhd to be appointed as its judicial manager, and to be placed under judicial management for six months.

It is also seeking to stay any winding-up proceedings or enforcement, detention or distress levied against the company or its properties, and for no order of winding up of the company to be made during the period.

The Edge had previously reported that ACE Group is facing a slew of suits by its investors.