Financial Distress: 6 Reliefs for Corporate Malaysia

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

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.

Continue reading

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

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

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

Delivering a Talk on Resolving Boardroom and Shareholders Disputes

I will be delivering a webinar on Wednesday 10 February 2021 for the Companies Commission of Malaysia. It will be on Resolving Boardroom and Shareholders Disputes. I will also be incorporating the latest company law decisions.

The webinar will include the following topics: Continue reading

Case Update: Federal Court Decides on Threshold for Winding Up Based on Illegality

In Tan Keen Keong @ Tan Kean Keong v Tan Eng Hong Paper & Stationery Sdn Bhd & Ors and other appeals [2020] MLJU 2204 (grounds of judgment dated 17 December 2020), the Federal Court dealt with an important question of law for a just and equitable winding up.

What is the threshold for winding up a company based on allegations of illegality or breach of statute? Continue reading