Financial Distress: 6 Reliefs for Corporate Malaysia

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In EY Malaysia’s Transactions Insights (February 2021), it was pointed out that the prolonged impact of the COVID-19 pandemic continues to disrupt Corporate Malaysia, financially and operationally. Almost a year on, the magnitude of financial risks has increased. A vast majority of companies would require some form of recapitalization to improve their financial position.

I identify six much-needed reliefs to provide a shot in the arm for Corporate Malaysia. The reliefs will help to inoculate and strengthen businesses against further distress.

In the Companies Commission of Malaysia (CCM) Consultation Document issued in July 2020, CCM set out policies and a draft proposed Bill in support of such reliefs. I wrote about these changes in The Edge Malaysia as well.

Like the vaccine rollout in Malaysia, I am hoping for a smooth and quick rollout of these proposed laws. The commentary below is based on the proposed laws by the CCM. Continue reading →

Case Update: Director’s Breach of Fiduciary Duty Through Inaction

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The Privy Council’s decision in Byers v Chen Ningning [2021] UKPC 4 reiterates certain key points of law on the director’s fiduciary duty to the company. A director who knows that a fellow director is acting in breach of duty or that an employee is misapplying the assets of the company must take reasonable steps to prevent that from happening.

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Case Update: Local Authority’s Assessment Rates is Not a Priority Debt in Liquidation

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In the High Court decision of Re SG & Sons Sdn Bhd (grounds of judgment dated 10 February 2021), the Court has confirmed that the local authority’s assessment rates is not a priority debt in a winding up.
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Spartacus Order: Self Identification Order against Persons Unknown

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A self-identification order, otherwise known as a Spartacus order, is an order to compel the unknown defendant to identify himself and provide an address of service.

In the ongoing case of Zschimmer & Schwarz v Persons Unknown, Ong Chee Kwan JC in the High Court granted Malaysia’s first-ever Spartacus order recently . You can access the grounds of judgment dated 13 February 2021 for the grant of the Spartacus order. Continue reading →

Case Update: Federal Court to Decide If Unsecured Creditors Can Oppose Judicial Management

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Lee Shih and Lynn comment on the Federal Court proceedings involving points of law on judicial management

The Federal Court in the case of Million Westlink Sdn Bhd will now decide on an important area on judicial management law. Whether unsecured creditors can appear in an application for a judicial management order and oppose the making of the judicial management order. Leave to the Federal Court was granted on 4 January 2021. Continue reading →

Shareholders’ Say on Directors’ Pay: First Prosecution Due to Failure to Obtain Shareholders’ Approval

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I read the news on the Companies Commission of Malaysia charging NWP Holdings Bhd for its failure to obtain shareholders’ approval for directors’ fees. This failure was for two financial years of 2017 and 2018. This charge relates to section 230 of the Companies Act 2016 (CA 2016), being a new provision requiring shareholders in a general meeting to approve the fees of the directors. Essentially, the shareholders having a say on the directors’ pay. This is the first reported prosecution involving this section. Continue reading →