M DEVELOPMENT Ltd (formerly known as NTI International) said on Friday that the litigation commenced by its subsidiary Winsta Holding Pte Ltd and the latter's seven subsidiaries (collectively known as Winsta Group) against 13 defendants failed to obtain creditors' funding support.
In response, M Development entered into a deed of sale and assignment on Oct 29 with the appointed liquidators of the seven subsidiaries in the Winsta group to "purchase their causes of action against these 13 defendants".
"The company will be taking steps to vigorously prosecute the litigation and will make further updates as appropriate," M Development said.
M Development had in May disclosed a series of "undisclosed interested party transactions" under Winsta Group constituted "actionable wrongs and breach of duties" on the part of certain executive directors and officers of the Winsta Group.
These undisclosed transactions were uncovered in an internal audit by KordaMentha. All seven subsidiaries of Winsta Holding have been placed in creditors' voluntary liquidation since August.
Winsta Group has also commenced legal proceedings against 13 defendants, including former director Sim Pei Yee, as well as persons and entities related to Ms Sim.
But after the liquidators informed the creditors of the seven subsidiaries that there are insufficient funds to prosecute the litigation, the creditors have declined to provide funding for this purpose, hence prompting M Development to fork out the costs of this litigation.
"The company is of the view that it would be in the interests of its shareholders and other stakeholders for the litigation to be prosecuted vigorously against the thirteen defendants, including Ms Sim, notwithstanding the liquidation of the Winsta Group subsidiaries," M Development said.