The coronavirus pandemic gives rise to the major risk of companies and small businesses going insolvent. In this article, I set out the restructuring and corporate rescue options for businesses in Malaysia. For example, companies can pursue the corporate rescue mechanisms under the Companies Act 2016. For small businesses who are sole proprietors, they may face bankruptcy. These individuals consider the voluntary arrangement under the Insolvency Act 1967.
The High Court issued its grounds of judgment in Safari Alliance Sdn Bhd v Tiger Synergy Berhad (Grounds of Judgment dated 1 March 2020).
The case dealt with the statutory right of a shareholder under section 310(b) of the Companies Act 2016 (CA 2016) to hold a general meeting of the company. This right is especially significant here since the general meeting was to replace the directors of the public-listed company, Tiger Synergy Berhad.
The Companies Commission of Malaysia (SSM) has issued the Guideline for the Reporting Framework for Beneficial Ownership of Legal Persons. This guideline has already come into force. Companies, limited liability partnerships and businesses have up to 31 December 2020 to obtain and update their beneficial ownership information.
I had earlier written about the global trends on disclosure of beneficial ownership and also the existing Malaysian position in the Companies Act 2016 (CA 2016). I had also made some comments on the consultation document on the proposed beneficial ownership guidelines.
I now write on 10 things on the beneficial ownership framework to Malaysian companies and the responsibilities that follow.
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  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.
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
In the Golden Plus Holdings decision, the High Court sets out give important points relating to the removal of directors under the Companies Act 2016 (CA 2016). You can read the grounds of judgment dated 14 January 2020.
The decision deals with the issues relating to requisitioning an EGM, the unavailability of some directors to attend a Board meeting, whether there can be first a requisition and then a convening of an EGM, the special notice requirement for removal of a director, and whether there can be improper motives to invalidate the removal of a director.