The one takeaway of this new corporate liability is this. Essentially, when a person associated with a company commits a corrupt act to obtain a business advantage, this will expose the company to committing a criminal offence. This will then have serious repercussions on the directors and management of the company.
There can be legal repercussions to a company when one of its directors is adjudged bankrupt. It is common in the constitution or articles of association to provide that the office of the director will become vacant if the director becomes bankrupt. I set out below three interesting legal issues that arise from bankruptcy and directors.
First, I will deal with the potential adverse impact of bankruptcy on directors’ resolutions and legal proceedings. This in light of the recent Court of Appeal decision in Sazean Engineering & Construction Sdn Bhd v Bumi Bersatu Resources Sdn Bhd  5 AMR 443;  MLJU 839. This decision was under the Companies Act 1965 (CA 1965). Secondly, I interpret these issues in light of the Companies Act 2016 (CA 2016). Thirdly, potential ways to overcome such arguments. Continue reading →
The paper analysed the Federal Court decision in Tengku Dato’ Ibrahim Petra bin Tengku Indra Petra v Petra Perdana Bhd  2 MLJ 177, FC, or otherwise known as the Petra Perdana decision. The principle on the division of powers between the directors and shareholders was also compared with the present position under section 195 of the Companies Act 2016. Continue reading →
I have been invited to speak at this year’s International Malaysia Law Conference 2018. I will be speaking on Day 2, Breakout Session 4, from 12pm to 1.15pm along with other panellist speakers. The session is titled Corporate Responsibilities: The Place of Fiduciary Obligations.
The Honourable Justice Margaret Beazly AO, President of the New South Wales Court of Appeal, will be the main speaker. Dato’ Anantham Kasinather, retired Court of Appeal Judge, and Dato’ Mohammed Faiz, Executive Chairman of PwC Malaysia, will also be sharing their insights.
Company directors have a fiduciary obligation to always act in the best interest of their company – in accordance with the business judgment rule – and to discharge their directors’ duties in compliance with the law. How should conflicts of duty and interests be dealt with? How does the Malaysian position compare with the position in New South Wales?
As in this case, statutory immunity often includes the requirement of good faith. Would a plaintiff bringing an action have to assert the absence of good faith, or would the defendant have to actively put forward a good faith argument? Continue reading →