Purchasers go to court in bid to oppose Empire Remix corporate voluntary arrangement


Timothy Achariam, TheEdge Markets
January 5, 2023

Hakem Arabi & Associates

KUALA LUMPUR (Jan 4): A group of buyers have applied for leave to intervene in the court-sanctioned corporate voluntary arrangement (CVA) for the Empire Remix abandoned project in Subang Jaya.

Ranjan Chandran, the lawyer for the 36 buyers who are seeking to be interveners to oppose the CVA, submitted on Wednesday (Jan 4) that the CVA was usually intended for ailing companies and not for abandoned developments.

“For CVA, its main purpose is to rehabilitate an ailing company. Here, we’re not talking about the revival of an ailing company. We’re talking about an abandoned project," Ranjan told the High Court. TOP PICKS BY EDGEPROP

“The CVA is the wrong corporate rescue mechanism for True Renaissance. Because we’re not talking about rehab or revival or ailing company, but that of a project which now stands abandoned,” the lawyer said during submissions before Judicial Commissioner Ahmad Murad Abdul Aziz.

He also submitted that True Renaissance did not disclose to the court that it had sought to include another abandoned project, Empire Remix 2, in the the CVA scheme.

“The interveners have discovered that the long list of creditors forming part of the CVA Scheme, and in total 2,411 names listed, also encompasses the purchasers of Empire Remix 2,” he said.

Ranjan also addressed the interveners’ plight, saying they have suffered for 10 years without getting their houses.

“They’ve waited 10 years for the project to be completed. No completion. Saddled with bank loans and interest payments," he said.

“It will be another five years before the project is supposedly completed. They’re going to be servicing their interest, banks aren’t going to wait. Many of them are struggling to repay,” the lawyer added.

The ailing project is located across the road from Empire Remix 2 (which has been renamed Edumetro) in USJ1, Subang Jaya. Both projects were originally launched by True Renaissance Development Sdn Bhd, a unit of Mammoth Empire Holding Sdn Bhd (MEH). However, MEH, the developer behind Empire Subang, was unable to complete the projects due to financial difficulties.

Less than 30% of Empire Remix had been completed before the project came to a halt. As a result, 2,500 buyers — who have collectively paid RM500 million through end financing, excluding their down payment and bank interest for their property — have been left with nothing to show for it.

In 2019, landowner Dergahayu Sdn Bhd, which owns the 11-acre site, got into a legal tussle with True Renaissance due to the project delays. Dergahayu then took over Empire Remix but failed to complete the development. At its launch in 2012, Empire Remix had an estimated gross development (GDV) value of RM2.3 billion.

The Edge Malaysia weekly reported last year that developer HCK Capital subsequently took over Empire Remix 2, injected RM300 million to cover the construction, infrastructure and other costs and was scheduled to complete four of the five blocks by the first quarter of 2023. The project has a GDV of RM850 million.

Ranjan has completed his submissions, and hearing of the case will continue before Ahmad Murad on Feb 15 as there are other parties who are applying to intervene.