The Kuala Lumpur High Court has ordered that InventQjaya Sdn Bhd (IQJ) be wound-up for failure to pay RM240 million debts.

Justice Abdul Wahab Ahmad made the order after allowing the government's winding-up petition against the company, which it (the government) claimed had breached a loan agreement entered by both parties.

"l am satisfied this is a proper case for the winding-up order to be issued," he said after hearing submissions made by senior federal counsel Pretam Singh and counsel Wan Anuar Shadat for IQJ director and chief executive officer Dr Sadeg Mustafa Faris ( photo ).

According to Bernama , the judge also ordered that an official receiver be appointed as provisional liquidator.

Earlier, the court refused Sadeg's application for a stay of execution on the winding-up order.

IQJ is a collaborative effort between the government and an United States-based company, Reveo Inc, to undertake research and development to develop and commercialise frontier technology-based patents in Malaysia.

Following the decision, the Insolvency Department will take over the management of InventQjaya.

However, another counsel representing Sadeg, S N Nair said they would file an appeal against the decision and also apply for stay of execution of the winding up order.

Arrest warrant

On Jan 27, the Kuala Lumpur Sessions Court issued a warrant of arrest against Sadeg after the prosecution could not serve on him three charges under the Anti-Money Laundering Act (AMLA) 2001.

In Feb last year, police seized the company with an order under the AMLA. The seizure came in the wake of questions raised in relation to RM50 million belonging to the company being transferred out of the country. Two police reports were lodged over the matter.

The government sought to wind-up IQJ for failure to repay an outstanding loan of RM240 million.

Sadeg, in his affidavit opposing the winding-up petition, claimed that the loan agreement was to formalise a joint venture between the Finance Ministry (MOF), IQJ and Reveo Inc USA, where the latter parties were to transfer and develop technology and Ministry of Finance was to provide venture capital.

Sadeg who is based in Pleasantville, New York, claimed that IQJ's bank accounts, which had a credit balance of RM1,530,029.83 in cash and RM34 million in fixed deposits, had remained frozen despite the seizure order on the company being lifted.

He alleged that IQJ was arbitrarily, deliberately and unlawfully put into its current position in a concerted effort to cause a breach of the terms of the loan agreement.

Pretam Singh submitted that InventQjaya breached the loan agreement signed between the company and the Government on June 18, 2003, by failing to increase the paid-up capital and utilising a portion of the loan disbursed under the agreement to make advances amounting to RM553,464 to Reveo Bangalore, India.

He said that there was nothing in Sadeg's affidavit to show that he had settled all his debts after the notice under the Companies Act 1965 was served on him and also failed to put forward any evidence that the breaches had not been committed.