I set out five tips on how I regularly check the Bursa Malaysia (stock exchange) Company Announcements page to gain legal and commercial awareness. This note is based on an email I sent out to my team members.
lee shih
MACC Amendment Act: Preparing for Corporate Liability
In an earlier post, I wrote about the 6 key issues arising from the MACC Amendment Bill. The Bill introduced corporate liability for corruption offences. The Amendment Bill has now been gazetted on 4 May 2018 as the MACC Amendment Act 2018. However, this Act has not been brought into force yet.
I set out certain thoughts on how companies can already prepare for the coming into force of the corporate liability provisions under the MACC Amendment Act 2018. Continue reading
1MDB is Insolvent: Directors’ Liabilities for the Debts
In a Media Release on 23 May 2018, Malaysia’s Ministry of Finance announced that it had met with 1MDB’s Board of Directors. The directors confirmed that 1MDB was insolvent and was unable to pay its debts. 1MDB’s debts may be in the region of RM42 billion. This figure is based on the declassified Auditor General Report issued in 2015.
With this tremendous amount of debt, I touch on one aspect of directors’ liabilities. The directors and other officers of 1MDB, when allowing 1MDB to take on so much debt, can be held personally liable for these debts. Continue reading
Case Update: A Shareholder Derivative Action Can Be Brought for Benefit of a Deadlocked Company
The Federal Court in Perak Integrated Networks Services Sdn Bhd v Urban Domain Sdn Bhd & Ors (see the Federal Court Grounds of Judgment dated 16 April 2018) has ruled on the issue of whether a common law derivative action can be initiated where the company is in a 50:50 deadlock.
The question of law before the Federal Court was:
Whether a derivative action may in law be brought for the benefit of a company, the management and control of which are deadlocked.
The Federal Court answered the question in the affirmative. The Federal Court has also set out the definitive test on wrongdoer control for the purposes of a common law derivative action. The possibility of initiating a just and equitable winding up petition based on the deadlock does not in itself prevent a shareholder from bringing a derivative action. Continue reading
MACC Amendment Bill: Introduces Corporate Liability for Corruption Offences
The MACC Amendment Bill 2018 has been presented in Parliament on 26 March 2018. One of the key changes is the introduction of corporate liability for corruption offences. If the Bill is passed, these provisions will come into force once the amendment Act is gazetted. [edit: Since writing this article, it has also been reproduced in theSun newspaper on 30 March 2018. The MACC Amendment Act has now been gazetted on 4 May 2018 and where I share more of my thoughts.]
The main thrust of this Bill is to introduce a new far-reaching corporate liability provision into the MACC Act. There are key changes and steps that companies, and its directors and officers have to be aware of.
Compendium of Companies Act 2016 Cases: Part 1
With the Companies Act 2016 in force for more than a year, I thought it is useful to set out a compendium of cases and transactions that have applied the Companies Act 2016 provisions.
As a summary, in terms of the reported cases, many of the cases relate to winding up based on the inability of the company to pay debts. This is under section 466 of the Companies Act 2016 (the old section 218 of the Companies Act 1965). Other cases also relate to other areas of winding up or shareholder disputes. I also highlight below examples of capital reduction and schemes of arrangement. Continue reading