The Kuala Lumpur High Court today granted an application to withdraw the winding up of Rakyat Corporation after the provisional liquidator, petitioner and creditors consented to it.

However, Judge Mary Lim Thiam Suan ordered the provisional liquidator to file an affidavit within seven days to report on the action carried out by the liquidators.

She also dismissed requests from the petitioner and creditors for damages and cost.

NONE On July 15, a creditor representing 44 other creditors filed an affidavit at the Penang High Court to prevent Rakyat Corporation from being wound up because the liquidator is said to be also an interested party.

The liquidator of the company Insolcorp Advisory Sdn Bhd, is said to have an interest in the winding up company, Machang Indah Bhd (formerly known as Rakyat Corporation Bhd).

Sources said that the two directors of Insolcorp Advisory are also directors of Machang Indah. Secretaries of both of these companies are also the same person with the same addresse of correspondence.

The Kuala Lumpur High Court, on June 17, appointed Gabriel Teo Chun as the provisional liquidator to oversee the assets and businesses of Rakyat Corporation until it hears the winding up petition.

According to documents obtained by Malaysiakini, Gabriel Teo's name and details of his connection with other 'friendly parties' appeared on the Companies Commission of Malaysia's latest records.

Audited accounts in 2007 show that Rakyat Corporation faced a RM37 million capital deficiency.

Fluctuating assets

According to the documents, the capital structure of Rakyat Corporation appeared to be fluctuating from the end of 2002 to end of 2007. Rakyat Corporation had total assets of RM7.3 million in 2002 while it was depleted to RM4 million in 2007.

Trade receivables for the corporation also fluctuated from 2003 to 2007. In 2003, the seizable assets was RM2.7 million, in 2004, RM40.8 million, and in 2005, it was at RM34.7 million.

Then, for the next two years, 2006-2007, it had dropped to RM1.2 million and RM473,077 respectively.

The matter, according to the documents, was brought to the attention of Prime Minister Najib Razak who is also the Minister of Finance.

The Ministry of Finance, on June 8, responded to letters sent by sources, saying that the matter will be looked into.

The matter has raised the question as to why Bank Rakyat, the parent company, which has been under the purview of the Ministry of Domestic Trade, Co-operatives and Consumerism, is now being supervised by the Ministry of Finance.

Bank Rakyat owns 60 percent of the total number of co-operatives in Malaysia.