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Siow Yoon Keong v H Rosen Engineering BV 280 where the transaction in question
was the passing of a resolution and only one creditor, Rosen, suffered losses. In
order to interpret section 304(1), the courts have made reference to English cases
to guide them. The elements of fraudulent trading which courts need to construe
are: 281
a) Parties knowingly
b) Carrying of any business
c) Intent to defraud of for any fraudulent purpose
10.6.2.1 Party Knowingly
Like section 213, the Malaysian provision imposes liability on "any person who
was knowingly party to the carrying on of the business." Section 304(1) is more
extensive than the insolvent trading provision in section 303(3) because the latter
only applies to „an officer of the company.‟ However, section 303(3) is wider in
its application, when compared to the UK wrongful trading provisions, the
Australian insolvent trading provisions and the New Zealand reckless trading
provisions which only apply to directors.
In LMW Electronics Pte Ltd v Ang Chuang Juay & Ors, 282 the plaintiff creditor
took action against four directors for fraudulent trading. The court deduced from
the facts of the case that the first and the second defendants were not parties to
the carrying out of the business because, throughout the relevant period, the
management of the company was in the hands of the third and fourth defendants.
Both the first and the second defendants were not involved in the deed of
assignment of trade receivables which was transferred to the holding company.
The third and the fourth defendants, who were also directors of the holding
company, were responsible for making the „statement by directors‟ in the audited
280 [2003] 4 MLJ 569.
281 These elements are similar to section 213 of the UK Insolvency Act 1986 and section 993 of
the UK Companies Act 2006.
282 [2010] 1 MLJ 185 at 203-204.
297