Duta Nilai Holdings Sdn Bhd v Ismail Bin Othman & Ors

Appellant(s): Duta Nilai Holdings Sdn Bhd

Respondent(s):

• Ismail Bin Othman
• Zainab Binti Mansor
• Al-Amin Strategic Commodity Sdn Bhd
• Mohd Nornizan Bin Ramlan @ Jamil
• Mohamad Naser Bin Osman

• YA Dato' Mohd Nazlan Bin Mohd Ghazali
• YA Dato' Faizah Binti Jamaludin
• YA Datuk Dr Lim Hock Leng

• The appellant, Duta Nilai Holdings Sdn Bhd, initiated legal action against its former directors and related parties (the respondents) challenging the validity of 161,632,017 Redeemable Convertible Preference Shares (RCPS) issued to the third respondent.
• The RCPS issuance was part of a larger "Acquisition Exercise" (2015-2017) where the appellant's immediate holding company acquired a remaining share of Lot 613 by purchasing the appellant from the first and second respondents and settling the appellant's and its subsidiary's "Existing Liabilities".
• The appellant contended that the RM161,574,236.24 "Existing Liabilities" assumed by the third respondent, which formed the consideration for the RCPS, were "fictitious and/or non-existent".

• Whether the High Court erred in placing weight on the "reclassification" of debts without first determining, as a threshold factual matter, the existence of the underlying pre-existing indebtedness.
• Whether the High Court erred in treating the reclassification as an effective assignment or transfer of the original creditors' rights to PR in the absence of formal evidence of assignment or consent.
• Whether the High Court erred in its assessment of the appellant's expert evidence, including by rejecting the expert as not objective and substituting its own views on accounting treatment.

• The Court of Appeal dismissed the appeal with costs, affirming the High Court's decision to dismiss the appellant's claim.
• The Court found that the High Court's factual assessment regarding the existence of indebtedness and the reclassification was not "plainly wrong," as it was supported by contemporaneous documents, audited accounts, and the overall transactional matrix.
• The Court held that the High Court was entitled to limit the weight of the appellant's expert evidence, as expert opinions are advisory and can be rejected if found unreliable or inconsistent with other evidence, even if unopposed.