The recent decision of the High Court in Asia Media Sdn Bhd (In Liquidation) (Post Winding Up Application No. WA-28PW-356-06/2024) offers a timely reminder of where real power lies when a company enters liquidation. The ruling clarifies the weight to be given to creditors’ preferences in the appointment of private liquidators under Section 477 of the Companies Act 2016, a provision that has long left room for discretion and dispute. The dispute in Asia Media  was, on its face

The Court of Appeal’s recent ruling in  Dato’ Sri Andrew Kam Tai Yeow  v  Raub Mining & Development Company Sdn Bhd & Raub Oil Mill Sdn Bhd  has brought clarity on director retirement and re-election processes.  When a company director is due to retire at an impending general meeting, can the director be deemed to have retired upon the expiry of the period in which the meeting ought to have been convened, if the meeting could not be held for some reason?   Background Facts  

In the world of business, directors are like the captains of a ship, steering the company through both calm and stormy seas. But what happens when the captain dips into the ship’s treasure chest for personal gain? That is where corporate governance steps in, waving its big rulebook to ensure everyone plays fair.   What Constitutes Misuse of Company’s Funds, And Its Consequences   A director has statutory duties towards the company as well as duties under the common law. It is

Recently, the Court of Appeal in Ong Kwee Lee v Able Perfect Sdn Bhd, examined the question whether one could claim to be the beneficial owner of shares purchased but not fully paid? The Court of Appeal found in favour of the said party pursuant to a trust deed created between Ong Kwee Lee and Able Perfect Sdn Bhd, the registered owner of the shares. In early 2016, two business partners, Ng and Ong, agreed to acquire 500,000 shares in Sekoplas Industries Sdn Bhd (Sekoplas), w

The sanctity of contracts is a key principle in contract law, rooted in the idea that any agreements entered into freely by parties must be upheld, unless vitiating factor such as fraud, duress or illegality come into play. In  Tan Chong Industrial Equipment Sdn Bhd v Transnasional Express Sdn Bhd & 6 others  [2024] CLJU 1977, the Court of Appeal re-examined this fundamental principle, affirming that the integrity of contractual obligations holds firm even against claims of u

When two parties claim the right to purchase the same property under separate agreements with the same seller, which agreement takes precedence? In the case of Teckland Motors Sdn Bhd v Pang Guan Hong & Ors  [2024] 9 MLJ 359, the Defendants, as landowners, found themselves at the centre of such a dispute.   This case highlights the legal considerations involved when determining which sale and purchase agreement is valid, and who ultimately holds the rights to the property. Th

On 28.8.2024, the Federal Court issued a landmark decision that clarified the distinctions between oppression actions and derivative actions under the Companies Act 2016 (CA 2016). This ruling offers valuable guidance in determining the appropriate legal course based on individual circumstances. Facts Low Cheng Teik & ors v Low Ean Nee Civil Appeal No.: 02(f)-30-04/2023(W) was an appeal by Low Cheng Teik and two others (Appellants) against the decision of the Court of Appeal

As businesses may also be misused to finance serious offences such as money laundering, terrorism, proliferation financing, and other illegal activities, the Companies Act 2016 implemented a beneficial ownership (BO) reporting system to reduce the prevalence of such unlawful activities.   The Companies (Amendment) Act 2024 (Amendment Act) came into operation on 1 April 2024. This alert discusses the key amendments, specifically the beneficial ownership reporting requirements.

It is commonplace that contracting parties will document their meeting of minds into a written agreement for formality and ease of enforceability. The question is whether contracting parties can subsequently come to a mutual agreement to vary the terms of the initial agreement including the agreement in relation to consideration i.e. price. Although a contract is essentially founded on the consent of both the promisor and promisee, this does not mean contracting parties can v

Derivative action is an action commenced on behalf of a company, especially in cases of “fraud on the minority” and “wrongdoers in control”. The commencement of derivative action is now a statutory regime under the Companies Act 2016 (CA). A complainant may, with the leave of court initiate, intervene in or defend a proceeding on behalf of a company. This is not confined to the members of the company alone as  it also extends to persons who are not members but entitled to be

Companies often embark on a spectrum of corporate exercises designed to bolster their market standing, drive shareholder value and adapt to the ever-evolving business dynamics.   This alert examines the various common corporate exercises that are undertaken by listed companies, ranging from rights issues to raise additional capital to bonus issues that reward shareholders. Each initiative represents a deliberate step towards sustainable growth of these listed companies.   Rig

Section 245 of the Companies Act 2016 (CA 2016) provides for a company and for its directors and manager to keep and maintain accounting and other records at the registered office of the company or such other places as the directors think fit. These accounting and other records shall at all times be open for inspection by the directors. Further, the court also may by order allow an approved company auditor acting for a director to inspect the accounting and other records of t

‘…one has to remember that a scheme of arrangement is a corporate rescue mechanism. As with other corporate rescue mechanisms, such as judicial management, it seeks to rehabilitate the company and achieve a better realisation of assets than possible on liquidation.’ Hitachi Plant Engineering & Construction Co Ltd And Another V Eltraco International Pte Ltd And Another Appeal  [2003] 4 SLR 384 Consequent to the Consultative Document on the Proposed Companies (Amendment) Bill 2

In the realm of contractual agreements, the interplay between oral promises and subsequent written agreements often becomes a focal point of legal scrutiny. The Federal Court in Abd Ghani Golamdin v Universiti Utara Malaysia & 2 Ors [2023] 6 MLJ 1 examined a scenario wherein an employee received an oral commitment of additional remuneration from his superiors, and this commitment was subsequently documented in writing. A key question emerged - Would this written “agreement” s

On 10 October 2023, the Government tabled amendments to the Companies Act 2016 (CA) via the Companies (Amendment) Bill 2023. This Bill introduces, among others, a comprehensive beneficial ownership reporting framework under the new Division 8A in Part II of the CA. Proposed Amendments The key proposed amendments are as follows: 1.Criteria of Beneficial Owner Presently, Section 2 of the CA defines “beneficial owner” as the ultimate owner of the shares and does not include a no

In a move towards strengthening corporate governance and promoting high standards of integrity and accountability, the Companies Commission Malaysia (CCM) has recently issued a new Code of Ethics for Company Director and Company Secretary ( Code of Ethics ). This Code of Ethics serves as general guidelines on the ethical expectations of directors and company secretaries when carrying out their duties. This Code of Ethics supersedes the previous Code of Ethics – Company Direct