1 HC/OA 449/2025 (“OA 449”) was the application of CKR Paints & Coating Specialist Pte. Ltd. (“CKR Paints”) for leave to convene a creditors’ meeting for the purpose of considering a proposed scheme of arrangement (the “Scheme”), pursuant to s 210(1) of the Companies Act 1967 (2020 Rev Ed) (“CA”).

2 The application was opposed by Maybank Singapore Limited (“Maybank”), United Overseas Bank Limited (“UOB”) and DBS Bank Ltd (“DBS”), who were major creditors of CKR Paints. Oversea-Chinese Banking Corporation Limited (“OCBC”) and Cast Laboratories Pte Ltd attended the hearing but took no position. The Housing and Development Board (“HDB”) did not support and took no position on the application, but disputed the allegation that it caused the financial demise of CKR Paints by its termination of a contract, which it said was with a different company. ¹

3 CKR Paints was one of a group of companies (collectively, the “CKR Group”). I have outlined the history of the CKR Group’s restructuring efforts in Re Nagarani d/o Karuppiah (Maybank Singapore Ltd and others, non-parties) and another matter [2025] SGHC 115 at [8]–[11] and do not repeat it here.

4 In respect of OA 449, CKR Paints’ Scheme proposed a one-time payment of S$2.44m to be distributed to all its creditors on a pro-rata basis within 30 days of the court’s approval of the Scheme, in exchange for a full discharge of its debts. ² The funds would be sourced from an investor, who would be entitled to a share of CKR Paints’ profits. ³

5 I dismissed the application and in view of the appeal filed against my decision now provide the grounds for my decision.

6 Counsel for CKR Paints submitted that the proposed Scheme was viable and workable, that it was beneficial to the creditors, and that it had a realistic path to being approved by the creditors. ⁴ Alternatively, CKR Paints was open to counter-proposals, which could be made at the meeting, and would be preferable to CKR Paints going insolvent. ⁵

7 Counsel for CKR Paints submitted that the interests of the creditors would not be prejudiced by the convening of the meeting. The creditors no longer had any security besides the personal guarantees of the two individuals who were founders and shareholders of the CKR Group companies, and those individuals had no significant assets, thus all the creditors of CKR Paints were essentially in one class. ⁶

8 Additionally, counsel for CKR Paints submitted that the Scheme was sufficiently detailed and addressed the concerns of the creditors. ⁷

9 Finally, counsel for CKR Paints submitted that OA 449 was not an abuse of process, nor was it frivolous or vexatious. ⁸

10 Counsel for Maybank and UOB submitted that OA 449 should be dismissed because:

(a) There was no realistic prospect of the proposed Scheme receiving the requisite approval from creditors. ⁹

(b) CKR Paints had not disclosed material information. CKR Paints had not provided an explanatory statement, liquidation analysis, or adequate financial disclosure, and the term sheet was riddled with inaccuracies. ¹⁰ It had not disclosed that this was the second attempt to convene a creditors’ meeting in eight months on worse terms than the first attempt. ¹¹ It had not disclosed how creditors were to be classed. ¹²

11 Counsel for Maybank and UOB also submitted that OA 449 was an abuse of process. It was not a genuine attempt to propose a scheme of arrangement, but was filed to delay or stave off the bankruptcy of the director of CKR Paints, Chinnakaruppan Kalaiyarasan (“Mr Arasan”), and his wife, Nagarani d/o Karuppiah (“Mdm Nagarani”). ¹³ Mr Arasan and Mdm Nagarani were the personal guarantors of the debts CKR Contract Services Pte Ltd owed to Maybank, while CKR Paints was the corporate guarantor of the same debt. ¹⁴ It was submitted that CKR Paints had failed to make full and frank disclosure of, amongst other things, its relations with the proposed funder, whether there were related party creditors, and whether preferential payments and disposals had been made. ¹⁵

12 Section 210(1) of the CA provides that:

13 The applicable principles underlying the court’s decision on whether to grant leave to convene a creditors’ meeting under s 210(1) are well-established, and were summarised by the Court of Appeal in Pathfinder Strategic Credit LP and another v Empire Capital Resources Pte Ltd and another appeal [2019] 2 SLR 77 (“Pathfinder”) at [29]:

14 I found it inappropriate to grant CKR Paints leave to convene a creditors’ meeting for the following reasons.

15 As a preliminary matter, while the proposed Scheme may perhaps not have been sufficiently detailed so as to be ready for presenting to the creditors to be voted upon, its basic contours were sufficiently simple and clear (see above at [4]) so as to enable the court to assess its feasibility, and I proceeded to do so.

16 Fundamentally, I found that there was no realistic prospect of the proposed Scheme being approved by the creditors. To obtain approval, the Scheme had to be supported by a majority in number representing three-quarters in value of the creditors who vote (s 210(3AB) of the CA). At the hearing, Maybank’s counsel indicated that some recovery had taken place and the amount owed to Maybank was about $47m as at 28 May 2025. ¹⁶ Meanwhile, UOB held about S$765,019.05 of CKR Paint’s debts as at 20 May 2025. ¹⁷ DBS had also filed a winding up application against CKR Paints with a debt value of about S$1,431,007.86. ¹⁸ Based on these latest available figures, Maybank, UOB and DBS held about 93% in debt value amongst CKR Paints’ creditors. ¹⁹ As counsel for Maybank and DBS rightly noted, even if the debt to Maybank was fully extinguished, UOB and DBS would hold about 40% in debt value amongst CKR Paints’ creditors. ²⁰ This alone would have been more than enough to block the proposed Scheme, even if all other creditors were in favour of it.

17 CKR Paints took the view that the proposed Scheme was superior to a previous proposed scheme in HC/OA 1002/2024 (the “Previous Scheme”) in so far as it involved a one-time payout not dependent on any external factors, and said that the Scheme would be advantageous to creditors compared to insolvency. ²¹ While it was not for me to consider the merits of the Scheme at the leave stage (The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Ltd and another appeal [2012] 2 SLR 213 at [63])), I note that the creditors disagreed with CKR Paints. Maybank took the view that the proposed Scheme offered worse terms than the Previous Scheme. ²² The Previous Scheme had been withdrawn by CKR Paints precisely because it was clear that, in its words, “[i]n light of the position taken by Maybank Singapore Limited, who is a major creditor, it is clear that the scheme of arrangement will not be approved by the requisite statutory majority”. ²³ On 10 March 2025, the court had also dismissed CKR Paints’ application for another moratorium, noting that the restructuring attempts had gone on for long enough and the major creditors were objecting to the proposed scheme. ²⁴ There had been nothing since then to suggest that the present or any future proposal was more likely to succeed and that leave should be granted for CKR Paints to convene a creditors’ meeting.

18 Although I accepted CKR Paints’ submission that it was not necessary for it to show that it had the votes at the time of the application for leave, ²⁵ it had to at least show that it had a reasonable prospect of successfully obtaining approval. It was not able to do so in the face of such staunch and longstanding opposition. It had not, in fact, been able to do so since its financial difficulties first arose almost two years ago in July 2023, despite the benefit of a moratorium lasting more than one and a half years. ²⁶ In the above circumstances, it would not be fair to make the order sought by CKR Paints merely on the remote possibility of the creditors’ positions changing.

19 Finally, in so far as Maybank and UOB argued that OA 449 was an abuse of process because it was intended to stave off the bankruptcies of Mr Arasan and Mdm Nagarani, I declined to make any such finding. The threshold for a finding of abuse of process is necessarily a high one, particularly in the context of scheme applications where regard must be had to the inherently dynamic nature of the restructuring process (Pathfinder at [94]). Counsel for CKR Paints confirmed that it was not part of the proposed Scheme that Mr Arasan and Mdm Nagarani that their personal guarantees would be released. ²⁷ It was not clear to me that OA 449 was not a bona fide attempt at restructuring, even if it was an unrealistic one. It was, in any event, not necessary to make a finding of abuse of process to dispose of the matter.

20 For the above reasons, I dismissed OA 449.

21 Maybank, UOB, DBS and OCBC indicated they would seek costs under the usual banking documentation. I made no order as to costs in respect of HDB.