The High Court has again confirmed that for the initial grant of a restraining order in a scheme of arrangement, the applicant must meet all the pre-conditions in section 368(2) of the Companies Act 2016 (CA 2016).
This was confirmed in the recent decision in Lagenda Erajuta Sdn Bhd (Grounds of Judgment dated 20 February 2020).
With the coronavirus outbreak, Malaysia is now under restricted movement to limit the gathering of people. The Prime Minister announced the movement control order and the associated regulations have been gazetted. This article aims to set out six key issues for companies as they navigate the holding of general meetings.
By way of background, on 16 March 2020, the Registrar of Societies announced that in light of the coronavirus pandemic, all annual general meetings for societies have been banned until 30 June 2020.
Seemingly, on 16 March 2020, the Companies Commission of Malaysia (SSM) had issued a press release to ask all companies to consider all available options for meetings including electronic meetings at multiple venues. Companies would also apply for extension of time to hold its annual general meetings. The link on the SSM website has now gone down so I cannot locate a copy of that press release.
I set out the six possible issues that companies have to take note of in relation to their general meetings.
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 [2020] 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.
I set out a case update on the Federal Court decision of Tee Siew Kai v Machang Indah Development Sdn Bhd (see the Grounds of Judgment dated 17 February 2020). The decision is on the law applicable to the grant of leave to sue a liquidator in his personal capacity. This decision reverses the Court of Appeal decision in Tee Siew Kai (as liquidator for Merger Acceptance Sdn Bhd) (in liquidation) v Machang Indah Development Sdn Bhd (in liquidation) (previously known as Rakyat Corp Sdn Bhd [2019] 2 MLJ 514.
This decision reiterates the importance of leave of the Court in order to avoid wasteful litigation against liquidators and to preclude unwarranted interference with the winding up process. There must be a prima facie case made out, the Court must evaluate the evidence to see if this has been met, and pecuniary loss suffered by the company must be shown. Continue reading
