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Uniphoenix Corporation Bhd v Raymond Leong Ah Kat 191 where the court
emphasised that in order to lift the corporate veil, there must be sufficient evidence
to prove that the holding company had absolute control over its subsidiaries and
associate companies.
The claim that Uniphoenix and its subsidiaries were one entity was substantiated by
a search in the registry of companies, which confirmed that Uniphoenix was the
brain and mind of its subsidiaries and had total control over them. The court has also
indicated the possibility that the principle in Salomon‟s case would not be applied to
group of companies if the evidence is clear to show the wholly-owned subsidiary is
bound hand and foot to the holding company and the facts have not been challenged.
This can be seen from the Federal Court decision in Sunrise Sdn Bhd v First Profile
(M) Sdn Bhd & Anor 192 which stated that in the situation where it was an undisputed
fact that the subsidiary was wholly-owned by the holding company, and it had not
been challenged that the holding company by proxy or through its nominees
managed the subsidiary, there was no need to lift the veil. This is because, the
composition, type, shareholding and control of the subsidiary stood in front of the
veil.
Likewise, in Kwan Chew Holdings Sdn Bhd v Kwong Yik Bank Bhd, 193 Gopal Sri
Ram JCA decided that where the companies have been regarded as one entity from
the beginning, it is not open for the defendant to change its stance and choose to treat
each company in the group as a different entity. The judge went on to state that in
these circumstances, it was not a question of lifting the veil or treating the companies
in the group as one economic entity, but merely an example of equity in personam
where the defendant was estopped from denying that companies in the group were
191 [2004] 6 MLJ 90.
192 [1996] 3 MLJ 533 at 542.
193 [2006] 6MLJ 544 at 559-560.
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