My company entered into a Facility Agreement (“FA”) with the bank. I am the guarantor. Due to MCO, we defaulted the loan in the FA. The bank took legal action against my company and demanded the sum from me as guarantor. Can I ignore the letter of demand? What is the legal implication?

 What if I did not sign the guarantee to the FA as a guarantor and my signature was forged?

 Why is there such a problem in evidence since the law does not require demand notices to be replied to?

What should I do when I receive a letter of demand?

  1. Check the timeframe given to you to reply to the demand.
  2. Consult a lawyer as soon as possible.
  3. Instruct your lawyer to immediately reply to the demand.
  4. State your defence clearly and as early as possible.
  5. If there is a defence of fraud and forgery, immediately lodge a police report so that an investigation can be carried out.
  6. Send the documents alleged to be forged for examination by an expert.

Case in point: Small Medium Enterprise Development Bank Malaysia v Lim Woon Katt [2016] 9 CLJ 73