Selangor Properties Berhad: Proposed Selective Capital Reduction

I read in the news about the proposed selective capital reduction exercise for the listed company Selangor Properties Berhad. The major 68.2% shareholder of Selangor Properties proposes to privatise the company and allow the remaining 31.8% shareholders to exit the company with a pay-out of RM5.70 per share.

I read the announcement dated 25 October 2018. I was interested to see that the proposed mechanism for the selective capital reduction will be by way of a court order under section 116 of the Companies Act 2016. This is instead of the alternative route of using the solvency statement. Continue reading

Shareholder Oppression: A Personal Wrong or a Corporate Wrong?

Lee Shih and Joyce Lim discuss the effect of the Singapore Court of Appeal’s decision in the Sakae Holdings case. This article was originally published in Skrine’s Legal Insights Issue 03/2018.

In the recent case of Ho Yew Kong v Sakae Holdings Ltd [2018] SGCA 33 (“Sakae Holdings”), the Singapore Court of Appeal had the opportunity to clarify the distinction between personal wrongs committed against shareholders of a company and corporate wrongs against the company. This distinction directly relates to the question of whether the appropriate relief in each respective scenario would be by way of an oppression action or a statutory derivative action.

ST Photo. Image from the Business Times Singapore.

The Singapore Court of Appeal set out a framework to determine whether an aggrieved shareholder could maintain an oppression action or ought to have pursued a statutory derivative action instead. Continue reading

Malaysia Insolvency Conference 2018 on 22 November 2018

On 22 November 2018, the Malaysia Insolvency Conference 2018 will be held at Connexion @ Nexus, Bangsar South. The conference is jointly organised by the Malaysian Institute of Accountants (MIA), the Insolvency Practitioners Association of Malaysia (IPAM), and the Malaysian Institute of Chartered Accountants (MICPA).

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Case Update: The First Judicial Management Decision in Malaysia

Summary

The High Court case of Re Leadmont Development Sdn Bhd [2018] MLJU 1320; [2018] 1 LNS 1420 is the first decision on judicial management in Malaysia.

Judicial management orders were granted ex parte for two related companies, Leadmont Development Sdn Bhd (“Leadmont”) and its subsidiary Sierra Delima Sdn Bhd (“Sierra Delima”). The judicial management orders were to facilitate the rehabilitation of these two companies. The companies wanted to successfully complete their project, the Selayang StarCity Project. A secured creditor of the companies, Infra Segi Sdn Bhd (“Infra Segi”), intervened after the grant of the judicial management orders to set aside the orders.

Image: http://www.selayangstarcity.com.my/

The decision is important for setting out the background and statutory framework of the judicial management provisions in Malaysia. It spells out the test for the grant of a judicial management order. The Court ultimately exercised its inherent jurisdiction to set aside the earlier judicial management orders. Continue reading

Case Update: The MARA Decision on Appointment of Directors and Management Review

The High Court decision in Majlis Amanah Rakyat (MARA) v Dato’ Abd Rahim Adb Halim & Ors [2018] 8 CLJ 738; [2018] MLJU 1008 touched on some important points on the appointment of directors. It is also the first decision to briefly deal with the new right of management review under section 195 of the Companies Act 2016 (CA 2016).

Image: www.theedgemarkets.com

This dispute arose from the boardroom and shareholder tussle where MARA had requisitioned for an EGM of the company, Med-Bumikar. Med-Bumikar held a substantial stake in the listed entity, MBM Resources Bhd (MBMR). UMW had tabled an offer to purchase Med-Bumikar’s stake in MBMR. The crown jewel at the heart of the dispute was essentially MBMR’s 20% stake in Perodua. UMW already had approximately 38% interest in Perodua and this would allow UMW to have control over Perodua. Continue reading