The High Court in Dato’ Shun Leong Kwong & Anor v Menang Corporation (M) Bhd & Ors  MLJU 870 (grounds of judgment dated 21 May 2021) dealt with, among others, the issue of whether the company could suspend its directors. The Court also addressed issues relating to Board meetings and the requisition of the members’ meeting.
The Privy Council’s decision in Byers v Chen Ningning  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.
This article kickstarts the series of the Top 5 cases for the year 2020. This follows last year’s Top 5 Company Law Cases in Malaysia for 2019, restructuring and insolvency cases, and arbitration cases. This year’s series will cover five areas: company law, tax, construction, restructuring and insolvency, and arbitration cases in Malaysia.
We start with this year’s top company law cases in Malaysia. I will do things a bit differently as there were a number of interesting company law decisions. So I group the cases (which are more than five) into five areas of company law issues. Continue reading
The High Court in the Sulaiman & Taye decision (see the grounds of judgment dated 8 July 2020 of Ong Chee Kwan JC) deals with very significant issues in relation to fraudulent trading. Fraudulent trading is where directors of a company have to bear personal liability for the debts of a company in winding up. This is because the directors carried on the business of the company with the intent to defraud its creditors. In particular, whether the delinquent directors bearing personal liability then has to pay directly to the aggrieved applicant or to pay into the wound up company’s assets for the general benefit of all the creditors. Continue reading
I have been invited to speak at the Malaysian Institute of Accountants‘ webinar on Wednesday 17 June 2020. It is titled Reliefs and Risks for Companies and Directors: COVID-19 Temporary Measures. My co-speaker is Kenneth Foo, both of us being the authors of Companies Act 2016: The New Dynamics of Company Law in Malaysia. Here is the registration form for the two-hour webinar. Fees are RM150 for MIA members and RM195 for non-members.
This seminar will cover all the common practical issues for companies arising from the movement control restriction. With the heightened risk of solvency-related issues, directors must also be aware of their responsibilities and the risks of personal liability.