Company Law Case Update: Oppression Issues on Beneficial Shareholders and a Shareholders Agreement

The High Court decision in Gue See Sew & 2 others v Heng Tang Hai & 2 others (see the Grounds of Judgment dated 2 January 2020 and at Gue See Sew & Ors v Heng Tang Hai & Ors [2020] MLJU 46) deals with important legal issues on whether a beneficial owner of shares can initiate an oppression action and whether breaches of a shareholders’ agreement can be grounds for oppression.

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Case Update: Federal Court Decides on Issue of Leave to Sue Liquidator Personally

I set out a case update on the Federal Court decision of Tee Siew Kai v Machang Indah Development Sdn Bhd (see the Grounds of Judgment dated 17 February 2020). The decision is on the law applicable to the grant of leave to sue a liquidator in his personal capacity. This decision reverses the Court of Appeal decision in Tee Siew Kai (as liquidator for Merger Acceptance Sdn Bhd) (in liquidation) v Machang Indah Development Sdn Bhd (in liquidation) (previously known as Rakyat Corp Sdn Bhd [2019] 2 MLJ 514.

This decision reiterates the importance of leave of the Court in order to avoid wasteful litigation against liquidators and to preclude unwarranted interference with the winding up process. There must be a prima facie case made out, the Court must evaluate the evidence to see if this has been met, and pecuniary loss suffered by the company must be shown. Continue reading

Artificial Intelligence has Arrived for Criminal Sentencing

We will be seeing the use of artificial intelligence (AI) in the Malaysia courts for the first time this week. AI will be used to give guidance to a Magistrate Court Judge on the sentencing of certain criminal offences. The public prosecutor and the defence counsel will still get a chance to submit and comment on the sentencing guideline generated by the AI system. The Magistrate Judge will have the final discretion on the sentence to impose.

This article will set out how this AI system will be implemented. This is based on the various news reports (see here, here and here) and the presentation made by the Chief Judge of Sabah and Sarawak Tan Sri Datuk Seri Panglima David Wong Dak Wah at the Selangor Bar Civil Law Conference on 14 February 2020. I anticipate that there will be more clarity once the system is up and running. Continue reading

Six Points on Leave to Appeal to the Federal Court

At the recent Civil Law Conference on 14 February 2020, there was a list of good pointers, statistics and tips set out in the session on leave to appeal to the Federal Court. This post sets out the chances of success and examples of questions where leave was allowed.

As a brief background, in Malaysia, the apex court is the Federal Court. For matters that originated at the High Court, the final level of appeal is before the Federal Court. But an appeal to the Federal Court is not as of right. There must first be an application for leave, or permission, to appeal to the Federal Court. The test for leave is that there must be a question to be decided for the first time or a question of importance where a Federal Court decision would be to public advantage. Where leave is allowed, the Federal Court would then allow the appeal proper to be heard.

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IRB Tax Dawn Raid – How to Deal With It

The guest authors, Siong Sie and Desmond Liew, set out tips on what to do if there is a surprise visit or a dawn raid carried out by the Inland Revenue Board.

The news recently featured the new Tax Investigation Framework 2020 of the Inland Revenue Board of Malaysia (IRB).

The Inland Revenue Board of Malaysia (IRB) actively conducts tax investigations or “raids” on taxpayers. The main purpose of these raids is to deter tax evasion and/or aggressive tax planning with the ultimate aim of enhancing tax compliance. It is not uncommon for the IRB to have obtained a reasonable amount of information – either through its own global intelligence or through informers – prior to conducting a dawn raid on a taxpayer.

Siong Sie and Desmond, set out some tips on what to do if there is such a surprise visit or a dawn raid carried out by IRB. Continue reading

Talk on Resolving Boardroom and Shareholders Disputes

On Tuesday 7 April 2020, I will be speaking at the Companies Commission of Malaysia seminar on ‘Resolving Boardroom and Shareholders Disputes‘. It is a half day talk from 9am to 1pm and with a registration fee of RM250 or RM300. It is open to members of the public.

I am looking forward to sharing practical insight from the various cases I have worked on. I frequently receive queries from company secretaries, directors and shareholders on certain disputes. I then designed this seminar around these often raised issues. Continue reading