THE APPLICATION OF THE COMPANIES ACT 2016 TO MINORITY SHAREHOLDERS IN PRIVATE COMPANIES IN

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THE APPLICATION OF THE COMPANIES ACT 2016 TO MINORITY SHAREHOLDERS IN PRIVATE COMPANIES IN

MALAYSIA

CHEN THIM WAI

MASTER OF LAW (BY RESEARCH) UNIVERSITI UTARA MALAYSIA

2018

THE APPLICATION OF THE COMPANIES ACT 2016 TO MINORITY SHAREHOLDERS IN PRIVATE COMPANIES IN

MALAYSIA

CHEN THIM WAI (821730)

A Thesis submitted to the Ghazali Shafie Graduate School of Government in fulfillment of the requirements for the Master of Law

Universiti Utara Malaysia

Kolej Undang-Undang, Kerajaan dan Pengajian Antarabangsa (College of Law, Government and International Studies)

Universiti Uta a Malaysia

PERAKUAN KERJA TESIS / DISERTASI (Certification of thesis I dissertation)

Kami, yang bertandatangan, memperakukan bahawa (We, the undersigned, certify that)

CHEN THIM WAI (821730) SARJANA

calon untuk ljazah

(candidate for the degree oQ

telah mengemukakan tesis / disertasi yang bertajuk:

(has presented his/her thesis I dissertation of the following title):

THE APPLICATION OF THE COMPANIES ACT 2016 TO MINORITY SHAREHOLDERS IN PRIVATE COMPANIES IN MALAYSIA

seperti yang tercatat di muka surat tajuk d~n kulit tesis / disertasi.

(as it appears on the title page and front cover of the thesis I dissertation).

Bahawa tesis/disertasi tersebut boleh diterima dari segi bentuk serta kandungan dan meliputi bidang ilmu dengan memuaskan, sebagaimana yang ditunjukkan oleh calon dalam ujian lisan yang diadakan pada 30 APRIL 2018

That the said thesis/dissertation is acceptable in form and content and displays a satisfactory knowledge of the field of study as demonstrated by the candidate through an oral examination held on: APRIL 30, 2018

Pengerusi Viva (Chairman for Viva)

Pemeriksa Luar (External Examiner)

Pemeriksa Dalam (Internal Examiner)

Tarikh: 30 APRIL 2018 Date

ASSOC. PROF. DR. HARLIDA ABDUL Tandatangan

WAHAB (Signature)

PROF. DR. HASAN! BIN ALI Tandatangan

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Tandatangan

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- - - + - -DR. NURLI YAACOB (Signature) ~

Nama Pelajar ( Name of Student)

Tajuk Tesis (Title of the Thesis)

Program Pengajian (Programme of study)

Penyelia Utama (Main Supervisor)

CHEN THIM WAI (821730)

THE APPLICATION OF THE COMPANIES.ACT 2016 TO MINORITY SHAREHOLDERS IN PRIVATE COMPANIES IN MALAYSIA

·--- ...

SARJANA

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ASSOC. PROF. DR. RUZITAAZMI

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PERMISSION TO USE

In presenting this thesis in partial fulfillment of the requirement for Master of Law degree, from Universiti Utara Malaysia, I agree that Universiti Library may make it freely available for inspection. I further agree that permission for copying of this thesis in any manner either in whole or in part, for scholarly purpose may be granted by my supervisor, or in her absence, by the Dean, Ghazali Shafie Graduate School of Government, College of Law, Government and International Studies (COLGIS). It is understood that any copying or publication or use of this thesis or parts thereof for financial gain shall not be allowed without my written permission. It is also understood that due recognition shall be given to me and to Universiti Utara Malaysia for any scholarly use which may be made of any material from this thesis.

Request for permission to copy or to make use of material in this thesis in whole or in part, shall be addressed to:

Dean (Ghazali Shafie Graduate School of Government)

UUM College of Law, Government and International Studies (UUM COLGIS) Universiti Utara Malaysia

06010, UUM Sintok Kedah Darul Aman Iv Malaysia r a

ABSTRAK

Akta Syarikat 2016 (CA 2016) memperkenalkan undang-undang barn yang mempengarnhi pemegang saham minoriti bagi syarikat persendirian yang tidak terlibat dalam pengurnsan atau tidak berada dalam lembaga pengarah syarikat. Undang- undang mengenai mesyuarat pemegang saham diubah dengan ketiadaan mesyuarat agung tahunan dan kelulusan resolusi melalui prosedur resolusi bertulis tanpa memerlukan mesyuarat diadakan. CA 2016 juga memperkenalkan sistem tadbir urns korporat barn yang mengelirnkan dan peraturan yang lebih ketat untuk pembayaran dividen. Oleh yang demikian, tujuan kajian ini ialah untuk mengkaji kesan pernbahan, dalam undang-undang mengenai mesyuarat pemegang saham, sistem tadbir urns korporat dan peraturan dividen, mengenai pemegang saham minoriti dalam syarikat persendirian. Metodologi yang digunakan adalah penyelidikan berasaskan kepustakaan yang berkaitan dengan bidang undang-undang di bawah CA 2016 dengan membandingkannya dengan undang-undang yang sama di negara-negara Komanwel dan Akta Syarikat 1965 (CA 1965). Kajian ini mendapati bahawa, bagi sistem tadbir urns korporat, CA 2016 telah memilih peraturan pengurnsan dalaman yang dikenali sebagai Peraturan yang Boleh Diganti, yang mengawal hubungan antara pemegang saham dan pengarah yang terdapat secara berserakan yang terletak di seluruh Akta tanpa panduan untuk mengenal pastinya. Ini adalah kelemahan yang jelas kepada para pemegang saham minoriti dalam syarikat persendirian untuk mengetahui hak mereka berbanding dengan Table A di CA 1965. Undang-undang barn mengenai mesyuarat menyediakan prosedur 'resolusi tertulis' yang membolehkan resolusi diluluskan tanpa mesyuarat selagi jumlah ahli yang dipersetujui bersetuju, yang membolehkan kemungkinan penyalahgunaan oleh pemegang saham yang mengawal dalam meluluskan resolusi tanpa sebarang perbahasan. Satu lagi undang-undang baru menyingkirkan keperluan mesyuarat agung tahunan (AGM) sebagai mekanisme akauntabiliti oleh para pengarah syarikat, yang mana ini mengabaikan kepentingan para pemegang saham. Seterusnya, jangkaan pemegang saham minoriti untuk menerima pulangan pelaburannya dengan dividen dihalang oleh peraturan yang mengawal pembayaran dividen yang bergantung kepada syarat-syarat yang tidakjelas seperti "keuntungan" (profits) dan "hutang yang kena dibayar" (debts due); dan keputusan kes undang-undang common yang lapuk. Adalah disyorkan supaya jadual untuk mengenal pasti peraturan pengurnsan dalaman disediakan; perlindungan disediakan untuk undang-undang baru 'resolusi tertulis' dan ketiadaan AGM; terma dalam peraturan dividen ditakrifkan dan pembatalan keputusan undang-undang common yang lapuk.

Kata Kunci: Pemegang Saham Minoriti dalam Syarikat Persendirian, Peraturan Yang Boleh Diganti, Resolusi Tertulis, Peraturan Dividen, Akta Syarikat 2016.

ii

ABSTRACT

The Companies Act 2016 (CA 2016) introduces novel laws affecting minority shareholders in private companies who are neither involved in its management nor on its board of directors. The law on shareholders' meetings is changed by the absence of annual general meeting and the passing of resolution by a written resolution procedure without holding a meeting. The CA 2016 also introduces a new corporate governance system which is confusing and a stricter rule for payment of dividends. The purpose of this study is to examine the effects of the changes, in the law on shareholders' meetings, corporate governance system and the dividend rule, on the minority shareholders in private companies. The methodology employed is library-based research that relates to those areas of law under the CA 2016 by comparing it with similar laws in the Commonwealth countries and the Companies Act 1965 (CA 1965).

It reveals that, on the corporate governance system, the CA 2016 has opted for internal management rules known as Replaceable Rules, governing the relationship between shareholders and directors, which are located all over the Act without any guidance to identify them, which is a clear disadvantage to the minority shareholders in knowing their rights as compared to Table A under the CA 1965. The novel laws on meetings provide for 'written resolution' procedures enabling resolutions to be passed without a meeting so long as the requisite number of members have agreed to it, which allows for possible abuse by the controlling shareholders in passing a resolution without any debate. Another novel law dispenses with the requirement of annual general meeting (AGM), thus, disregarding its importance as an accountability mechanism by the directors to the shareholders. Finally, payment of dividends are hampered by the rules which relied on undefined terms such as 'profits' and 'debts due'; and outdated common law case decisions. It is recommended that a table to identify the internal management rules be provided; safeguards be in place for the novel laws of ·written resolution' and absence of AGM; terms in the dividend rule be defined and the reversal of outdated common law decisions.

Keywords: Minority Shareholders in Private Companies, Replaceable Rules, Written Resolution, Dividend Rule, Companies Act 2016.

iii

ACKNOWLEDGMENTS

As I reflect on my academic journey of research, this quote comes to mind - there is no end to learning. Although there were challenges along the way, I have been fortunate to have a patient and helpful supervisor in Dr. Ruzita Azmi, who through her untiring efforts have given insightful comments on my work and posed thoughtful issues for me to ponder which have gone a long way towards the improvement of this thesis - I am grateful for that.

The resources of this university including its staff have enabled me to view matters from a different perspective. In preparing for this research, I have found the lectures on Academic Writing and Legal Research Methodology to be guidance tools of immense value.

At home, I am blessed with a wonderful wife, Wong Lai Thiang, who has been a pillar of support in all my endeavours, academic or otherwise.

iv

TABLE OF CONTENTS

PERMISSION TO USE ^I

ABSTRAK ¹¹

ABSTRACT ¹¹¹

ACKNOWLEDGMENTS ^IV

TABLE OF CONTENTS ^V

LIST OF TABLES X

LIST OF STATUTES Xl

LIST OF CASES XllI

LIST OF ABBREVIATIONS ^XIX

CHAPTER ONE: INTRODUCTION 1

1.1 Background of the Study 1

1.1.1 Companies Act 2016 (CA 2016) 1

1.1.2 Company law reform and the Companies Act 2016

rs1t1 Utara

1.2 Statement of the Problem 5

1.3 Research Questions 13

1.4 Research Objectives 14

1.5 Significance of the Study 14

1.6 Research Methodology 15

1.6.1 Research Design 15

1.6.2 Scope of the Study 16

1.6.3 Types of Data 17

1.6.4 Data Collection Methods 18

1.6.5 Analysis of Data 20

1.7 Limitation of the Study 22

1.8 Literature Review 23

1.8.1 Introduction 23

1.8.2 Defmition of Operational Terminologies 24

1.8.3 Review of Literature 26

V

1.9

1.8.3.1 Corporate Governance for Minority Shareholders in Private Companies

1.8.3.2 Replaceable Rules and Table A

1.8.3 .3 Issues Relating to Meetings for Minority Shareholders in Private Companies under the CA 2016

1.8.3.4 Dividend Rule - Profits Test and Solvency Test Chapterisation

CHAPTERTWO:CORPORATEGOVERNANCEFOR MINORITY SHAREHOLDERS IN PRIVATE COMPANIES 2.1 Introduction

2.2 Corporate Governance and its Meaning

2.3 The Companies Act and the Emergence of Private Companies 2.4 Corporate Governance and Private Companies

2.4.1 Cadbury Report, Greenbury Report and Hampel Report 2.4.2 BHS Ltd, BEIS and a Code for Private Companies 2.4.3 Corporate Governance for Private Companies 2.5 Corporate Governance and Minority Shareholders in

ays1a

Private Companies

2.6 Corporate Governance and Shareholders' Meetings 2.7 Corporate Governance and Agency Theory

2.7.1 Theories and Corporate Governance 2. 7 .2 Agency Theory

2. 7 .3 Dominance of the Agency Theory 2.8 Corporate Governance for Private Companies

and Minority Shareholders

2.8.1 Governance Problems in Private Companies 2.8.2 Corporate Governance Under the CA 1965

and the CA 2016 2.9 Conclusion

CHAPTER THREE: TABLE A AND REPLACEABLE

vi

26 33

37 43 47

49

49 50 54 56 56 58 62

64 72 74 74 75 79

80 80

81 84

85

RULES -A COMPARISON OF TWO CORPORATE GOVERNANCE SYSTEMS

3 .1 Introduction

3.1.1 Articles of Association (AOA) and Table A for Existing Companies

3.1.2 Replaceable Rules (RR) for New Companies 3 .2 History of Company Law in Malaysia

3.2.1 Companies Act 1965 (CA 1965) 3.2.2 Table A in the CA 1965

3.3 History of Table A in the UK

3.4 The Corporate Governance System in Table A 3.5 Division of Powers in Table A in the CA 1965

3.5.1 Between Board of Directors and Shareholders 3.5.2 Between Controlling and Minority Shareholders

3.5.2.1 One Share, One Vote 3.5.2.2 Majority Rule

3.6 Accountability of the Directors in Table A in the CA 1965 3. 7 Replaceable Rules in the CA 2016

3.8 Conclusion and Brief Findings

1 Uta ra a ays1a

85

86 88 88 88 90 90 94 95 95 101 101 103 106 110 117

CHAPTER FOUR: ISSUES RELATING TO MEETINGS UNDER 121 THE COMPANIES ACT 2016 FOR MINORITY SHAREHOLDERS IN PRIVATE COMPANIES

4 .1 Introduction

4.1.1 Controlling and Minority Shareholders

4.1.2 Controlling Shareholders, Duties and Ratification 4.2 Annual General Meeting (AGM)

4.2.1 AGM as an Accountability Mechanism 4.2.2 No AGM

4.3 Written Resolution

4 .4 Access to Information and Documents

vii

121 122 123 124 124 128 134

139

4.5 Replaceable Rules and Voting Powers of Minority Shareholders 141

4.5.1 Pre-emption right 141

4.5.2 Weighted votes 142

4.6 Right of Shareholders to Make Recommendations to the BOD 143

4.7 Directors' duties 144

4. 7 .1 Introduction 144

4.7.2 Common law 144

4.7.3 Statutory Duties of Directors 146

4. 7 .3 .1 Introduction 146

4.7.3.2 Overview of the Statutory Duties of Directors 148 4. 7. 3 .2 .1 Duty to Act for Proper Purposes and in Good Faith;

Duty of Care, Skill and Diligence 148 4.7.3.2.2 Duty of Disclosure of Conflicts of Interest 149 4. 7 .3 .2.3 Duty to Seek Prior Approval of Shareholders 149 4.7.3.3 Enforcement of Statutory Duties and Civil Penalties 150 4.7.3.4 Statutory Duties and Ratification 152 4.8 Statutory Remedies for Minority Shareholders 153 4.9 Weaknesses in the Statutory Remedies in the CA 2016 156 4.9.1 'Just and Equitable' Winding up

ta ra a aysia

4.9.2 Oppression Proceedings 157

4.9.3 Statutory Derivative Actions 159

4.9.4 Statutory Injunction 160

4.10 Conclusion and Brief Findings 161

CHAPTER FIVE: THE DMDEND RULE UNDER THE 169 COMPANIES ACT 2016 AND MINORITY SHAREHOLDERS IN

PRIVATE COMPANIES

5.1 Introduction

5.2 Capital Maintenance Rule (CMR) 5.3 Dividends, Creditors and Shareholders

5.4 Dividends, Profits and Reformulation of Capital 5.5 Subsequent UK Case Law Developments

viii

169 170 171 173 174

5.6 Profits Test

5.7 Weaknesses in the Profits Test 5.8 Solvency Test and its Weaknesses

5.9 Minority Shareholders, Dividends and Directors 5 .10 Conclusion and Brief Findings

CHAPTER SIX: CONCLUSION AND RECOMMENDATIONS

6.1 Introduction

6.2 Brief Findings Relating to the Three Research Questions 6.2.1 First Research Question

6.2.2 Second Research Question 6.2.3 Third Research Question 6.3 Recommendations

6.3.1 First Research Question and Company Constitution 6.3 .2 Second Research Question

6.3.2.1 Written Resolution and No AGM Concepts

6.3.2.2 Power Sharing and the Black and Kraakman Model 6.3.3.3 Access to Information and Records

6.3 .3 Third Research Question on Dividends 6.4 Suggestions for Future Research

6.5 Conclusion

BIBLIOGRAPHY

ix

175 176 182 185 187

192

192 193

193 194 195 196 196 197 197 198 200 201 202 203

206

Table 1.1

Table 3.1

LIST OF TABLES

Locally incorporated private companies per year

Table of replaceable rules in Australia

X

7

111

LIST OF STATUTES

Malaysia

Companies Act 1965

Companies (Amendment) Act 2007 Companies Act 2016

Australia

Uniform Companies Act 1961 Corporations Law 1989

First Corporate Law Simplification Act 1995 Corporations Act 2001

Hong Kong

Companies Ordinance 2012 New Zealand

Companies Act 1993

Financial Reporting Act 2013 Singapore

Companies Act (Cap 50) South Africa

Companies Act 2008 United Kingdom

Joint Stock Companies Act 1844 Clauses Consolidation Act 1845 Limited Liability Act 1855 Companies Act 1856

xi

Companies Act 1862

Companies Act 1907 Companies Act 1948 Companies Act 1980 Companies Act 1985 Companies Act 2006

xii

LIST OF CASES

Abdul Rahim Aki v Krubong Industrial Park Sdn Bhd (1995) 3 MLJ 417 Ammonia Soda Company Limited v Chamberlain (1899) 2 Ch 629

Arah Cipta Sdn Bhd v Piala Gagasan (M) Sdn Bhd & Anor (2010) 9 CLJ 964 ARL Associate Sdn Bhd & 30 Ors v Bank Kerjasama Rakyat Malaysia Berhad (2012) MLill 1450; (2013) 1 AMCR 829

Australian Growth Resources Corporation Pty Ltd (Recs and Mgrs Apptd) v Van Reesema & Ors (1988) 13 ACLR 261

Automatic Self-Cleansing Filter Syndicate Co Ltd v Cuninghame (1906) 2 Ch 34 Baldev Singh v Mahima Singh & Ors (1974) 2 MLJ 206

Bank of Australasia v Hall (1907) 4 CLR 1514 Bond v Barrow Haematite Steel Co (1902) 1 Ch 353 Bonham-Carter v Situ Ventures Ltd (2012) BCC 717

Bratton Seymour Service Co Ltd v Osborough (1992) BCLC 693 Brunninghausen v Glavanics (1999) 32 ACSR 294

BSN Commercial Bank (M) Bhd v River View Properties Sdn Bhd (1998) 1 MLJ 872 Bushell v Faith (1970) AC 1099

Campbell Paterson v B Paterson & Sons, Limited & Ors (1916) SC (HL) 13 Caparo Industries plc v Dickman & Ors (1990) 1 All ER 568

Celcom (Malaysia) Bhd v Mohd Shuaib Ishak (2011) 3 MLJ 636

Chew Hock San v Connaught Housing Development Sdn Bhd (1985) 1 MLJ 350 Chiew Sze Sun & Anor v Cast Iron Products Sdn Bhd & 4 Ors ( 1994) 1 CLJ 157 Coleman v Myers (1977) 2 NZLR 225

Continental Tyre & Rubber Co (Great Britain) Ltd v Daimler Co Ltd (1915) 1 KB 893 Crawley & Ors v Short (2009) 76 ACSR 286

xiii

Credit Development Pte Ltd v IMO Pte Ltd (1993) 2 SLR 3 70

Dato' Gan Ah Tee & Anor (in their capacity as liquidators of Par-Advance Sdn Bhd (in liquidation)) v Kuan Leo Choon & Ors (2012) 10 MLJ 706

Dato Mak Kok & Anor v See Keng Leong & 9 Ors (1990) 1 CLJ 71

Dato Mohd Tahir bin Abdul Rahman & Ors v Syarikat Permodalan Kebangsaan Bhd

& Ors (1991) 2 CLJ 1155

Dato' Seri Timor Shah Rafiq v Nautilus Tug & Towage Sdn Bhd (2017) MLm 540 Dato' Tan Kim Hor & Ors v Tan Chong Consolidated Sdn Bhd (2004) 1 MLJ 690 Dato Ting Check Sii v Datuk Haji Mohamad Tufail bin Mahmud & Anor (2007) 7 MLJ 618

Dato' Toh Kim Chuan v Swee Construction and Transport Company (Malaya) Sdn Bhd (1996) 1 MLJ 730

Dimbula Valley (Ceylon) Tea Co Ltd v Laurie (1961) Ch 353 Dunn v Shapowloff (1978) 3 ACLR 775

Ebrahimi v Westboume Galleries Ltd (1973) AC 360 Edwards & Anor v Halliwell & Ors (1950) 2 All ER 1064

Expo Holdings Sdn Bhd & Ors v Toyo Ink Group Bhd (2014) 10 MLJ 674 Fisher v Black and White Publishing Company (1901) 1 Ch 174

Fliway Transport Pty Ltd v Soper (1988) 14 ACLR 690 Foss v Harbottle (1843) 67 ER 189

Gabriel Peter & Partners (suing as a firm) v Wee Chong Jin & Ors (1998) 1 SLR 374 Gas Lighting Improvement Co Ltd v Commissioners of Inland Revenue (1923) AC 723

Great Eastern Railway Company v Turner (1872) LR 8 Ch App 149 Hew Sook Ying v Hiw Tin Hee (1992) 2 MLJ 189

xiv

Hickman v Kent or Romney Marsh Sheepbreeders Association (1915) 1 Ch 881 Hilton International Limited (in liq) v Hilton & Anor (1988) 4 NZCLC 64,721 Hogg v Cramphorn Ltd & Ors (1967) Ch 254

In re British Seamless Paper Box Company (1881) 17 Ch. D 467

In re Buenos Ayres Great Southern Railway Co Ltd The Company v Preston ( 194 7) 1 Ch384

In re Exchange Banking Co (Flitcroft's Case) (1882) 21 Ch. D 519 In re George Newman & Co (1895) 1 Ch 674

In re National Bank of Wales, Limited (1899) 2 Ch 629

In the matter of The South British Insurance Company Limited (1980) ACLC 34419 Indo Malaysia Engineering Co Bhd v Muniandy Rengasamy & Co (1990) 3 MLJ 301 Industrial Equity Ltd v Blackbum (1977) 3 ACLR 89

Isle of Wight Railway Company v Tahourdin (1883) 25 Ch D 320

Jaya Medical Consultants Sdn Bhd v Islan & Peninsula Sdn Bhd (1994) 1 MLJ 520 Jet-Tech Materials Sdn Bhd & Anor v Yushiro Chemical Industry Co Ltd & Ors (2013) 2 MLJ 297

Kang Choon Leu @ Kang Chee Sim v Wintoni Group Berhad & 8 Ors (2016) 2 AMCR 257

Kumagai Gumi Co Ltd v Zenecon-Kemagai Sdn Bhd (1994) 2 MLJ 79 Lee v Neuchatel Aphalte Company (1889) 41 Ch. D 1

Lee Hark Lam & Ors v Kebun Rimau Sdn Bhd & Anor (2016) 6 MLJ 751 Lee Mun Lyn v Wong Kok Tung & Ors (2015)

MLm

Lian Keow Sdn Bhd (In Liquidation) & Anor v Overseas Credit Finance (M) Sdn Bhd

& Ors (1988) 2 MLJ 449

Lim Hean Pin v Thean Siang Co Sdn Bhd & Ors (1992) 2 MLJ 34

Lim Koei Ing v Pan Asia Shipyard & Engineering Co Pte Ltd (1995) 1 SLR 499 xv

Ling Meng Khong Stanley v Teo Chee Siong and Others (Yeo Boon Hwa, third party) (2011) SGHC 18

Long Acre Press Limited v Odhams Press Limited (1930) 2 Ch 196 Lonrho Ltd v Shell Petroleum Co Ltd (1980) 1 WLR 627

Low Kim Cheong v SSF Curtain Sdn Bhd ( dahulunya dikenali sebagai My Curtain Sdn Bhd) & Ors (2011) 1 LNS 667

Mac Plant Services Ltd v Contract Lifting Services (Scotland) Ltd (2009) SC 125 Marra Developments Limited v BW Rofe Pty Limited (1977) 3 ACLR 185

Mascon Rinota Sdn Bhd & Ors v Rinota Construction Sdn Bhd (2016) 4 MLJ 400 Metropolitan Fire Systems Pty Ltd v Miller (1997) 23 ACSR 699

Mills v Mills (1937-1938) 60 CLR 150

Mohd Badli bin Abd Razak & Ors v Ali bin Ismails (2016) 5 MLJ 29

Nawar Mani alp Ramachandran & Ors v Rajendran a/1 Ramachandran & Ors (2016) MLJU 1787

Ng Pak Cheong v Global Insurance Co Sdn Bhd (1995) 1 MLJ 64 Owen Sim Liang Khai v Piasau Jaya Sdn Bhd & Anor (1996) 1 MLJ 113

Paidiah Genganaidu v Lower Perak Syndicate Sdn Bhd (1972) 1 MLJ 220

Pan-Pacific Construction Holdings Sdn Bhd v Ngiu-Kee Corp (M) Bhd & Anor (2010) MLJU269

Peskin v Anderson (2001) 1 BCLC 372 Peter Buchanan Ltd v Mc Vey (1955) AC 516

Peters' American Delicacy Co Ltd v Heath (1939) 61 CLR 457

Petra Perdana Bhd v Tengku Dato' Ibrahim Petra Bin Tengku Indra Petra & Ors (2014) 11 MLJ 1

PJTV Denson (M) Sdn Bhd & Ors v Roxy Malaysia Sdn Bhd (1980) 2 MLJ 136 rT Anekapangan Dwitama v Far East Food Industries Sdn Bhd (1995) 1 MLJ 21

xvi

Qatar Islamic Bank v Asian Finance Bank Bhd & Ors (2015) 7 MLJ 445 QBE Insurance Group Ltd v ASC (1992) 8 ACSR 631

Re a Company (1986) BCLC 261 Re Barry Artist Ltd (1985) ¹ WLR 1305

Re City Equitable Fire Insurance Co Ltd (1925) Ch 392 Re Duomatic (1969) 2 Ch 365

Re Hume Industries (Far East) Ltd; Hume Industries (F.E.) Ltd v Humes Ltd (1974) 1 MLJ 167

Re Kong Thai Sawmill (Miri) Sdn Bhd; Kong Thai Sawmill (Miri) Sdn Bhd & Ors v Ling Beng Sung (1978) 2 MLJ 277

Re Harmer Ltd (1959) ¹ WLR 62

Re Northridge Properties Ltd (in liq) BC7769001, unreported M46/75, 13^th December 1977

Re Saul D Harrison & Sons plc (1995) 1 BCLC 475 Re Senson Auto Supplies Sdn Bhd (1988) 1 MLJ 326 Re Smith and Fawcett Ltd (1942) Ch 304

Re SQ Wong Holdings (Pte) Ltd (1987) 2 MLJ 298 Re Swaledale Cleaners Ltd (1968) 1 WLR 1710

Re Timbalec Pty Ltd and Companies Act (1974) 4 ALR 12 Re Tivoli Freeholds Ltd (1972) VR 445

Regal (Hastings) Ltd v Gulliver (1942) 1 All ER 378 Richard Brady Franks Ltd v Price (1937) 58 CLR 112 Salomon v Salomon & Co Ltd (1897) AC 22

Soh Jiun Jen v Advance Colour Laboratory Sdn Bhd & Ors (2010) 5 MLJ 342 Solaiappan & Ors v Lim Yoke Fan & Ors (1968) 2 MLJ 21

xvii

Soo Boon Siong@ Saw Boon Siong v Saw Fatt Seong and Soo Hock Seang (as estate representative Soo Boon Kooi@ Saw Boon Koay (deceased)) & Ors (2008) 1 MLJ 27

Southern Cross Mine Management Pty Ltd v Ensham Resources Pty Ltd & Ors (2003) QSC 402

Sri Hartamas Development Sdn Bhd v MBF Finance Bhd (1992) 1 MLJ 313 Sri Jeluda Sdn Bhd v Pentalink Sdn Bhd (2008) 3 MLJ 692

Sunrise West Sdn Bhd & Ors v Pravin Mahtaney Ramchand & Anor (2012) 1 MLJ 414

Tan Chong Teik v Gan Seong Chin@Gan Chin & 5 Ors (2014) 1 AMCR 605

Tan Guan Eng v Ng Kweng Hee (1992) 1 MLJ 487

TanHup Thye v Refco (Singapore) Pte Ltd (in members' voluntary liquidation) (2010) MSCLC 99,175

Tan Joo Chai & Anor v Eco Water Technologies (M) Sdn Bhd (2015) 3 MLJ 380 Tan Sooi Shin v Kow Kek Hing (1991) 3 MLJ 390

Taylor v Carroll (1991) 6 ACSR 255

a ays1a

Tenaga National Bhd v Irham Ninga Sdn Bhd & Anor (2011) 1 MLJ 752

Tengku Dato' Ibrahim Petra bin Tengku Indra Petra v Petra Perdana Berhad (2017) MLJU 1976

Tien Ik Enterprises Sdn Bhd & Ors v Woodsville Sdn Bhd (1995) 1 MLJ 769 Trevor v Whitworth (1887) 12 App Cas. 409

Tuan Haji Ishak Bin Ismail & Ors v Leong Hup Holdings Bhd and Other Appeals (1996) 1 MLJ 661

Verner v General and Commercial Investment Trust (1894) 2 Ch 239 Wood v Odessa Waterworks Co (1889) 42 Ch.D 636

Wuu Khek Chiang George v ECRC Land Pte Ltd (1999) 3 SLR 65

xviii

AC A&BR ACLJ ACLR ACSR AGM All ER ALR AMCR BCC BCLC Bond LR C&SLJ Calif LR CCM Ch ChD CLJ CLWR CLM CLR CLRC CoLN Deakin LR DULJ EBOLR ER Harv LR HKLJ

LIST OF ABBREVIATIONS

Appeal Cases 1875-

Accounting and Business Research Australian Journal of Corporate Law Australian Company Law Reports

Australian Corporations and Securities Reports Annual General Meeting

All England Reports 1936- Australian Law Reports

All Malaysian Commercial Cases British Company Law Cases Butterworths Company Law Cases

Bond Law Review

Company and Securities Law Journal California Law Review

Companies Commission of Malaysia Law Reports, Chancery Division 1891- Law Reports, Chancery Division 1876-1890

Current Law J oumal

Common Law World Review Commonwealth Law Bulletin Commonwealth Law Reports Corporate Law Reform Committee Company Law Newsletter

Deakin Law Review

Dublin University Law Journal

European Business Organization Law Review English Reports 1220-1865

Harvard Law Review Hong Kong Law Journal

xix

ICCLR Insolv LJ IntJLM JBL JCLS JSAfrL KB LQR LNS MLJ MLJU MLR Mon LR MSCLC MSWG NZCLC OECD QSC SAcLJ SC (HL) SJLS SLR SSM

Syd LR Table A UK UNSWLJ VR

vsc

WLR

International Company and Commercial Law Review Insolvency Law Journal

International Journal of Law and Management Journal of Business Law

Journal of Corporate Law Studies Journal of South African Law Law Reports, King's Bench Law Quarterly Review Legal Network Service Malayan Law Journal

Malayan Law Journal Unreported cases Modem Law Review

Monash University Law Review

Malaysian and Singapore Company Law & Securities Law Cases Minority Shareholders Watchdog Group

New Zealand Company Law Cases

The Organisation for Economic Co-operation and Development Queensland Supreme Court

Singapore Academy of Law Journal

Court of Session Cases, House of Lords (Scotland) Singapore Journal of Legal Studies

Singapore Law Reports

Suruhanjaya Syarikat Malaysia [Companies Commission of Malaysia]

Sydney Law Review

Fourth Schedule of Companies Act 1965 United Kingdom

University of New South Wales Law Journal Victoria Reports

Supreme Court of Victoria Weeldy Law Reports

xx

Yale LJ Yale Law Journal

xxi

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Company law has generally favoured the controlling shareholders in private companies who are also its directors. Any changes in the company law need to be evaluated on its effect on the minority shareholders particularly in regard to meetings where decision-making is made, payment of dividends and the internal management rules which govern the relationship among shareholders and the directors. The aim of this study is to examine those issues in Malaysia with regard to the provisions of the Companies Act 2016 with comparison to the previous law, the Companies Act 1965.

1.1.1 Companies Act 2016 (CA 2016)

In Malaysia, the Companies Act (CA 2016), which was gazetted on 15th September 2016,¹ represents a comprehensive overhaul of its company law. It was announced by the Companies Commission Malaysia (CCM) that the CA 2016 came into force on 31st January 2017.²

1 The CA 2016 was tabled and passed in the Dewan Rakyat (House of Representatives) on 4^th April 2016 and the Dewan Negara (House of Senates) on 28^th April 2016.

2 The announcement on the enforcement of the CA 2016 was made on the website ofCCM.

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