1MDB is Insolvent: Directors’ Liabilities for the Debts

In a Media Release on 23 May 2018, Malaysia’s Ministry of Finance announced that it had met with 1MDB’s Board of Directors. The directors confirmed that 1MDB was insolvent and was unable to pay its debts. 1MDB’s debts may be in the region of RM42 billion. This figure is based on the declassified Auditor General Report  issued in 2015.

 

With this tremendous amount of debt, I touch on one aspect of directors’ liabilities. The directors and other officers of 1MDB, when allowing 1MDB to take on so much debt, can be held personally liable for these debts. Continue reading

Five Legal Issues on GST at 0%

Khong Siong Sie and Kailash Kalaiarasu highlight the legal nuances behind the “abolishment of GST”.

On 16 May 2018, the government announced that the Goods and Services Tax (“GST”) is to be set at 0%, effective 1 June 2018 (see Goods and Services Tax (Rate of Tax) (Amendment) Order 2018 dated 16 May 2018)

Pic: www.beritadaily.com

This announcement was followed by a swift execution of the necessary revocation and amendment orders to remove, among others, the now redundant zero-rated supply and relief orders since no GST will be levied.

At first glance, the rakyat may be quick to describe this as the abolishment of GST. From a strictly legal perspective, however, there are greater nuances at play. Whilst economists and political analysts may have their respective takes on this measure, here are 5 points about GST at 0% viewed through a legal lens. Continue reading

Case Update: A Shareholder Derivative Action Can Be Brought for Benefit of a Deadlocked Company

The Federal Court in Perak Integrated Networks Services Sdn Bhd v Urban Domain Sdn Bhd & Ors (see the Federal Court Grounds of Judgment dated 16 April 2018) has ruled on the issue of  whether a common law derivative action can be initiated where the company is in a 50:50 deadlock.

The question of law before the Federal Court was:

Whether a derivative action may in law be brought for the benefit of a company, the management and control of which are deadlocked.

 

The Federal Court answered the question in the affirmative. The Federal Court has also set out the definitive test on wrongdoer control for the purposes of a common law derivative action. The possibility of initiating a just and equitable winding up petition based on the deadlock does not in itself prevent a shareholder from bringing a derivative action. Continue reading

LexisNexis’ Hannah Lim speaks at the United Nations Global Compact (Malaysia) Slave Free Trade World Pre-Forum Workshop

This article is contributed by LexisNexis Malaysia. LexisNexis is a leading global provider of business information solutions to professionals in legal, corporate, government, academics, tax, accounting and many more.

To find out more on LexisNexis Practical Guidance, visit here.

To find out more on the modern slavery index by country, visit The Global Slavery Index.

In a report published by the International Labour Organisation in 2017 titled Global Estimates of Modern Slavery: Forced Labour & Forced Marriage, it was estimated that in 2016 there were 5 victims of modern slavery in every 1,000 people. Further, the Global Slavery Index found that, in 2016, approximately two-thirds of the 45.8 million people in modern slavery are in the Asia-Pacific region. Examples of modern slavery include forced labor, child labor, and human trafficking.

In collaboration with the British High Commission, where Her Excellency Victoria Treadell, British High Commissioner to Malaysia gave the opening remarks, the United Nations Global Compact Network Malaysia held an all-day pre-forum workshop on Slave Free Trade last March 15th in Kuala Lumpur, where various speakers from different organisations discussed the vital role businesses play in ending slavery.

The panel of speakers was notable leaders from various NGOs and CSOs, including Dato’ Aishah Bidin from the Human Rights Commission of Malaysia (SUHAKAM), Dr. Nisar Ahmad from Universiti Sains Islam Malaysia, and Ms. Aegile Fernandez from local human rights and non-profit organisation Tenaganita.

LexisNexis’ Hannah Lim — Head of Rule of Law and Emerging Markets, SEA — spoke as a panelist about the ways in which even companies not directly involved in supply chains can still join the fight against modern slavery.

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Image 1: H.E. Victoria Treadell, British High Commissioner to Malaysia giving the opening remarks.
Image 2: Panelists flanked by UN Global Compact Malaysia officials (from second left to right) Ms Aegile Fernandez from TENAGANITA, Dr, Nisar Ahmad from USM, Dato’ Aisha Bidin of SUHAKAM, Ms Hannah Lim from LexisNexis.
Image 3: Dato’ Aisha Bidin speaking on the need for following international benchmark and standards, as Hannah Lim looks on.

Post-workshop, we canvassed Hannah’s opinion on various issues on modern slavery and what can be done to tackle it.

Continue reading