in the court of appeal malaysia (appellate jurisdiction)

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(Miri) Sdn Bhd & Ors. v. Ling Beng Sung [1978] 2 MLJ 227. The respondent in that case had applied by originating summons in his capacity as a member of the first appellant company for a number of orders the gist of which was that the second and third appellants be removed from office as managing director and director respectively and a receiver and manager be appointed to conduct the company’s affairs and for repayment of various sums alleged to have been disposed of wrongfully or without proper authorization. There was an alternative relief asked for that the company be wound up. The company was a family company in which the elder brothers (the second and third appellants) were the majority shareholders. The respondent and two younger brothers were minority shareholders. It was alleged that the second and third appellants had committed breaches of their powers as directors of the company and in particular complaint was made relating to: (a) the purchase and outfitting of a motor yacht, Berjaya Malaysia; (b) loan to Encik Harun Ariffn; (c) donations to political parties; (d) advances to and investments in joint ventures; (e) drawing by the second and third appellants from the company’s funds, and (f) remuneration paid to the second appellant as managing director. It appeared that after inquiries were made by the respondent many of the acts of the second and third appellants were validated by resolutions of the company. The learned trial 24
judge dismissed the application but on appeal the Federal Court ([1976] 1 MLJ 59) held: (a) that the purchase by the second appellant of the yacht, Berjaya Malaysia was misuse of the company’s funds and the moneys which he had paid out or for which he had himself reimbursed from the company’s funds in respect of the donations to political parties were improperly paid. The second appellant should therefore take over the Berjaya Malaysia and pay to the company all the money spent on it and also pay the company the amount of donations paid to the political parties; (b) that in order to protect the minority shareholders in this case the court would order: (i) that one of the younger brothers be appointed director to safeguard their interests; (ii) that donations be made in future only with the prior approval of the board of directors; (iii) that no bank account be operated without the signatures of two directors, one of whom shall be other than the elder brothers, i.e., the majority shareholders; (iv) that no moneys be drawn by any of the directors without the prior approval of the Board; (v) that the power delegated to the first respondent to make investments on behalf of the company be cancelled; (vi) that three clear days’ notice be given in writing of any directors’ meetings, and (vii) that the bonus for the directors in future be 2% of the nett profits and that no bonus be paid until after the passing of the 25
Page 1 and 2: IN THE COURT OF APPEAL MALAYSIA (AP
Page 3 and 4: 4. The 2 nd Respondent’s group co
Page 5 and 6: Business of the Company. The chairm
Page 7 and 8: 14. The 1 st Respondent continued t
Page 9 and 10: problems or complaints with regard
Page 11 and 12: 34. This was and is a clear breach
Page 13 and 14: Contributions and any other contrib
Page 15 and 16: 3. costs of and occasioned by this
Page 17 and 18: 2.1:1 to set up and operate the Dep
Page 19 and 20: 9. In accordance with the terms of
Page 21 and 22: 16. Messrs Ernst and Young were app
Page 23: (b) regulate the conduct of the aff
Page 27 and 28: directors exercised. These might be
Page 29 and 30: But if a case of “oppression” o
Page 31 and 32: In Kumagai Gumi Co Ltd v. Zenecon-K
Page 33 and 34: sufficient to constitute oppression
Page 35 and 36: emove the petitioner from the compa
Page 37 and 38: the starting point in any case unde
Page 39 and 40: Thus the personal relationship betw
Page 41 and 42: an oppressive manner. The learned a
Page 43 and 44: (ii) that the respondent company ha
Page 45 and 46: another company called Maestro Prod
Page 47 and 48: stores, for eg. Robert Tan, adverti
Page 49 and 50: the staff was also made use of to h
Page 51 and 52: ecognized the expertise of the 2 nd
Page 53 and 54: Agreement dated 10 July 1998, which
Page 55 and 56: 1.1 Upon the signing of a sale of s
Page 57 and 58: The response to the last two letter
Page 59 and 60: Our client confirms that they will
Page 61 and 62: We have been instructed by our clie
Page 63 and 64: the change of shareholding in the 2
Page 65 and 66: In addition to the three issues rai
Page 67 and 68: follows: Further down the minutes i
Page 69 and 70: Ms Kat Yong also highlighted the fi
Page 71 and 72: y demonstrating its ability to pay
Page 73 and 74: agreement of the Joint-Venture (“
Page 75 and 76:
until all avenues be exhausted befo
Page 77 and 78:
security. For that reason, the bank
Page 79 and 80:
The “Report on Verifications of S
Page 81 and 82:
It is clear to us that the learned
Page 83 and 84:
their staff in the central purchasi
Page 85 and 86:
shareholder in the Company. The lea
Page 87 and 88:
CONCLUSION As stated in the case of
Page 89:
For the Appellants: Counsel: Lim Pi
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in the court of appeal malaysia (appellate jurisdiction)

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