Lee Shih

Case Update: Shareholders’ Oppression Action Extends to Group of Companies

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The Malaysian High Court in Tob Chee Hoong v Tob Chee Choong & Ors [2017] MLJU 1303 has confirmed that the shareholders’ oppression remedy (section 181 of the Companies Act 1965, and section 346 of the Companies Act 2016) would extend to both the holding company and the subsidiary company.

An aggrieved shareholder may be a member of only the holding company but the oppressive conduct may only be at the subsidiary level. In line with other jurisdictions, this High Court decision confirms that the aggrieved shareholder can still seek relief. Continue reading →

Case Update: Winding Up Petition Cannot be Stayed Pending Reference to Arbitration

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In an earlier article ‘Arbitration and Liquidation: Never the Twain Shall Meet?‘, I had examined the possible tension between the contractual bargain to arbitration and the statutory right to bring winding up proceedings based on a debt. Would an arbitration agreement trump the statutory winding up process?

The recent High Court decision in NFC Labuan Shipleasing I Ltd v Semua Chemical Shipping Sdn Bhd [2017] MLJU 900; [2017] 1 LNS 943 found that there cannot be a stay under the Arbitration Act 2005 (AA 2005) of a winding up petition. A winding up petition is not a claim for payment. It is a class action in the public interest as part of a statutory regime. Therefore, it was held that a winding up petition is not a ‘proceeding’ that is susceptible to a stay pending arbitration. Further, a winding up petition does not concern a matter that is subject to an arbitration agreement. Continue reading →

INSOL International’s Kuala Lumpur Seminar – 28 November 2017

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INSOL International is the International Association of Restructuring, Insolvency & Bankruptcy Professionals. It is a world-wide federation of national associations for accountants and lawyers who specialise in turnaround and insolvency.

INSOL International will be holding its first-ever event in Malaysia with its Kuala Lumpur One Day Seminar on 28 November 2017 at the KL Hilton.

Continue reading →

Bankruptcy Amendments: The New Insolvency Rules and Voluntary Arrangement Rules

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As I have updated in my earlier article, the amendments to the Bankruptcy Act have now all come into force on 6 October 2017. We should now all be referring to it as the Insolvency Act 1967, instead of the old Bankruptcy Act 1967.

As a reminder, the new term Insolvency Act 1967 still merely refers to individual insolvency or individual bankruptcy. It does not involve corporate insolvency. Further, even under the Insolvency Act 1967, it continues to refer to the act of bankruptcy and the bankruptcy order.

Going hand in hand with the renamed Insolvency Act 1967, there are now a host of new rules that come along with the Act. Continue reading →

Auditors Face Greater Risk of Conflict under Companies Act 2016

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Under the Companies Act 2016 (CA 2016), there has now been a change in the law which may cause auditors to be conflicted or disqualified from a wider range of audit jobs. In particular, this may affect the larger audit firms.

Where an audit firm is appointed as the auditor of the company, every audit partner and now, with change in the law, every audit partner’s spouse cannot be an officer of the company. The CA 2016 defines an officer as including any director, secretary or employee of the company. Hence, an audit firm would appear to be conflicted from acting for a company where the spouse of an audit partner is merely an employee of the company. Continue reading →

SSM National Insolvency Conference 2017: Corporate Restructuring & Insolvency under the Companies Act 2015

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On 3 October 2017, the Companies Commission of Malaysia (SSM) is holding the SSM National Insolvency Conference 2017 entitled ‘Corporate Restructuring & Insolvency under Companies Act 2016: A Paradigm Change’. I have been involved in the organising of the sessions and it promises to be a very interesting conference. The registration fee is RM700.

I will be speaking and moderating Session 2 on ‘Corporate Rescue Mechanism: How It Will Work’. Joining me will be Mohamed Sufyan Mohamed Mokhtar from SSM and  Victor Saw of PwC.

Under the Companies Act 2016, the corporate rescue mechanism is made up of corporate voluntary arrangement and judicial management. Although the corporate rescue mechanism provisions have not been brought into force yet, it is anticipated that these provisions will come into effect by May 2018. In the meantime, the new draft Corporate Rescue Mechanism Rules are close to being finalised as well.

In our Session 2, the speakers will be fleshing out the application of the corporate voluntary arrangement and judicial management through factual scenarios. That should assist in seeing the practical implementation of these new mechanisms.

The other topics covered at the National Insolvency Conference are:

  • The World Bank’s Perspective on Debtors’ and Creditors’ Rights.
  • New Guidelines in Striking Off of Companies and Asset Management of Dissolved Companies.
  • Impact of the Companies Act 2016 on Winding Up.
  • What It Takes to Become an Insolvency Practitioner.

The full brochure and registration form can be found here.