Court backs financier in RM21.1mil pre-factoring dispute
Court of Appeal overturns High Court's finding that the pre-factoring facility amounted to unlicensed moneylending.
The Court of Appeal has ruled in favor of a financing company, allowing it to recover RM21.1 million from an oil and gas firm. The three-judge panel overturned a previous decision that deemed the arrangement unlicensed moneylending. SA Puncak Management Sdn Bhd (SAPM) provided KL Petrogas Sdn Bhd (KLP) with two Islamic financing facilities to support its natural gas project and working capital.
One involved purchasing KLP's unpaid invoices, while the other financed KLP's future billing. Initially, the High Court deemed the pre-factoring facility moneylending and ruled SAPM's financing agreements unenforceable. However, the Court of Appeal found SAPM to be engaged in legitimate debt financing and exempted from the Moneylenders Act 1951.
As a result, KLP must pay SAPM RM21,122,459.02, including RM50,000 in costs for both courts and proceedings. This ruling highlights the need for Malaysia to allow debt financing to avoid seeking such arrangements abroad.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Court backs financier in RM21.1mil pre-factoring dispute freemalaysiatoday.com
