The Court of Appeal in Abdul Malek Faisal bin Mohd Hyffny v Shaikh Marikhzan Jalani & 2 others (grounds of judgment dated 21 February 2023) invalidated an extraordinary general meeting (EGM) where the shareholders had passed a resolution to remove the director and chairperson of the company. The appeal turned on whether the shareholders should have waited for the full 15 minutes before electing one of their number to be chairperson of that meeting.
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The High Court in Safari Alliance Sdn Bhd v Tan Lee Chin and others (grounds of judgment dated 25 August 2021) dealt with how a shareholder cannot maintain an oppression action against rulings made by the Chairperson at a general meeting. Such rulings do not amount to “affairs of the company” for oppression.
The High Court in the Eka Noodles Berhad v Norhayati binti Tukiman (grounds of judgment dated 21 August 2021) decided that a single member of the company can put in the request for the directors to hold a company general meeting.
On 10 April 2020, the Companies Commission of Malaysia (SSM) announced that seven reliefs will be provided to companies in light of the COVID-19 outbreak and Malaysia’s Movement Control Order (MCO). These initiatives are very much welcomed. They range from temporary protection from winding up of companies, extension of time to lodge statutory documents, and an extension of time for the annual general meeting.
Shareholder meetings are an important platform to allow for members to debate and vote on matters affecting the affairs of a company. Case law has held that the holding of the general meeting, and the right to vote, are a fundamental right of the members.
Hence, it is particularly important to meet all legal requirements for such meetings. A technical non-compliance may result in the meeting being invalid and void.
I wanted to touch on three recent legal developments on shareholder meetings. The issues range from whether there is a need to second a proposed resolution, the powers of the corporate representative, and the ability to requisition a general meeting. Continue reading
