If you are interested to read from a legal stand point on the biggest closure of gym centers in Malaysia, Mr. Lee Shih, a dispute resolution lawyer at Skrine has written on 5 Key Legal Issues from the Closing Down of True Fitness Malaysia on his website at TheMalaysianLawyer.com.
Burgielaw just simply could not resist to put on their investigating cap and did some homework. The documents extracted below are information available in the public domain.
6 May 2017
A sale and purchase agreement was entered into for a consideration of USD36,720,000.00.
The ultimate Vendor is Mr PJW, Patrick John Wee Ewe Seng.
29 May 2017
Tongfang Kontafarma announced that completion of the SPA took place on 29.5.2017. Referring to the above, USD32,970,000.00 should have been paid to the ultimate vendor.
According to the announcement, the shareholdings upon completion will be as follows:
One of the undertakings from PJW is to close down of his controlled fitness operations not later than 31.12.2017, failing which franchise fees shall be payable by such operating companies.
Winding Up Proceedings
On 3.6.2017, A winding up petition was filed by Cheah Chin Kean against True Fitness World Sdn Bhd.
The alleged debt was RM14,468.64.
The debt appears to arose from RM12,000.00 legal fees and RM2,468.64 which was assigned in favour of Cheah Chin Kean after he bought over the entire debt from Perkasa Tech.
Who is Perkasa Tech?
Perkasa Tech’s business is in supplying of stationeries.
The owner of Perkasa Tech is Mahaletchumy A/P Ramakrishnan.
Cheah Chin Kean was approached by Perkasa Tech to buy the debt on or around 15.3.2017 and all 6 companies appear to owe Perkasa Tech in various amounts.
Both the letter dated 15.3.2017 and the Assignment dated 30.3.2017 was signed by one Mahaletchumy A/P Ramakrishnan.
A quick check shows that Mahaletchumy A/P Ramakrishnan is the sole proprietor of Perkasa Tech and also a sole proprietor to a legal firm namely M Ramakrishnan & Co, both sharing the same address.
After the completion of assignment, on 3.4.2017, Cheah Chin Kean issued a ”letter of demand” to True Fitness World Sdn Bhd and explained how it derived the debt of RM14,468.64.
(On 31.1.2017, the new Companies Act 2016 came into force and the threshold for initiating a winding up was increased from RM500.00 to RM10,000.00.)
On 2.5.2017 a S465 notice was issued by Messrs Melanie.
6 June 2017
Cheah Chin Kean filed a motion to appoint an interim private liquidator which was fixed for hearing on 9.6.2017.
9 June 2017
True Fitness announced that it would close down citing reasons of no longer financially viable.
On 19.6.2017, the winding up petition is fixed for case management.
As of the date of writing, we could neither find any reasons for Cheah buying over the debt nor True Fitness World Sdn Bhd consenting to the assignment of debt in the affidavit. We are similarly not sure over the reason of appointing a private liquidator for a rather small debt.
We did a further search and we also discovered that Cheah Chin Kean has filed 3 other winding up petitions as follows:
- WA-28NCC-338-06/2017 (CHEAH CHIN KEAN v True Yoga Sdn Bhd) which is fixed before Puteri Nursheila Binti Rahimi on 03 Jul 2017 at 9:00 AM, Aras 5, Tengah, Pengurusan Kes, Kompleks Mahkamah KL;
- WA-28NCC-342-06/2017 (CHEAH CHIN KEAN v Fitness Growth Sdn Bhd ) which is fixed before Puteri Nursheila Binti Rahimi on 03 Jul 2017 9:00 AM, Aras 5, Tengah, Pengurusan Kes, Kompleks Mahkamah KL;
- WA-28NCC-336-06/2017 (CHEAH CHIN KEAN v Truest Sdn Bhd) which is fixed before Puteri Nursheila Binti Rahimi on 03 Jul 2017 at 9:00 AM Aras 5, Tengah, Pengurusan Kes, Kompleks Mahkamah.
If you are a member of True Fitness and you still have an active subscription, Alex Anton Netto, a lawyer from Dee, Netto, Fatimah & Ng has offered to help initiate a class action. Please contact him through his online lawyer profile on our BurgieLaw online legal platform.