Yew Huoi, How & Associates | Leading Malaysia Law Firm

COMPANIES ACT 2016 – DIRECTOR’S RIGHT TO INSPECT RECORDS AND DOCUMENTS OF A COMPANY

A, a director and shareholder of the company, was denied access to inspect the company’s records. Although not involved in daily operations, A wants to determine the value of his shares for a separate lawsuit.

Can he file an application for inspection and appoint lawyers and auditors to do it on his behalf?

Section 245 of the Companies Act 2016 (CA 2016)

  • Section 245 of the Companies Act 2016 requires company, its directors and manager to maintain accounting and other records.
  • These records must be kept for 7 years and should be accessible to directors for inspection.
  • Sub-section (8) provides that the court may order that the accounting and other records of a company be inspected by an auditor on behalf of the director.
  • Non-compliance would be subject to fine and imprisonment.

Common Law Right

  • The right of company director to inspect its accounting and records is an absolute right under the common law.
  • This right originates from fiduciary responsibilities of good faith, care, skill and diligence that a director owes to the company.
  • The court would only restrict a director from utilising this right if there is an intention to use the information for purposes detrimental to the company.
  • If ulterior purpose is alleged, the burden of proof lies on that person to prove that allegation.
  • This common law right of inspection is not eliminated by the CA 2016.

Can the Company argue that the purpose of filing the application is to further another legal suit, helping A reclaim his shares? Hence, could there be ulterior motives?

  • No. Even if the inspection may help A in his claim for shares, it doesn’t necessarily mean that the company would suffer detriment or prejudice.
  • Put differently, the potential for further litigation between parties within the company does not imply that a director should be denied their right to inspect as director.
  • Can 3rd parties such as lawyers and auditors be appointed to inspect the documents?
  • Generally, the common law position of inspection is if a director has a right of inspection, equally his authorised agents ought to be accorded the same right. As such, 3rd parties such as lawyer and auditors can be appointed to inspect the documents on behalf of the director.

Case in point :

  1. Karen Yap Chew Ling v Binary Group Services Bhd and another appeal [2023] 11 MLJ 120
  2. Dato’ Tan Kim Hor & Ors v Tan Chong Consolidated Sdn Bhd [2009] 2 MLJ 527

Sorotan Terkini

REGULATIONS – GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT 1947 ) – ARTICLE I

This legal update explores key provisions of the General Agreement on Tariffs and Trade (GATT 1947), focusing on Article I (Most-Favoured-Nation Treatment), Article II (Schedules of Concessions), Article XX (General Exceptions), and Article XXI (Security Exceptions). Article I mandates that any trade advantage granted by one contracting party to another must be extended unconditionally to all other parties. Article II ensures that imported goods from contracting parties receive treatment no less favourable than that outlined in agreed schedules, while also regulating permissible taxes and charges. Articles XX and XXI provide exceptions for measures necessary to protect public morals, health, security interests, and compliance with domestic laws. The provisions reflect the foundational principles of non-discrimination, transparency, and fair trade, while allowing for limited, well-defined exceptions. This summary is intended to provide a concise reference for businesses and legal practitioners involved in international trade law.

Read More »

ROAD ACCIDENT – INSURANCE COMPANY STRIKES BACK: HIGH COURT OVERTURNS ROAD ACCIDENT CLAIM

When a motorcyclist claimed he was knocked down in an accident, the Sessions Court ruled in his favor, holding the other rider fully liable. But the insurance company wasn’t convinced. They appealed, arguing that there was no proof of a collision and even raised suspicions of fraud. The High Court took a closer look – and in a dramatic turn, overturned the decision, dismissed the claim, and awarded RM60,000 in costs to the insurer. This case is a stark reminder that in court, assumptions don’t win cases – evidence does.

Read More »

CHARTERPARTY – LIEN ON SUB-FREIGHTS: CLARIFYING OWNERS’ RIGHTS AGAINST SUB-CHARTERERS

In Marchand Navigation Co v Olam Global Agri Pte Ltd and Anor [2025] 1 Lloyd’s Rep 92, the Singapore High Court upheld the owners’ right to enforce a lien on sub-freights under Clause 18 of the NYPE 1946 charterparty, ruling that the phrase ‘any amounts due under this charter’ was broad enough to cover unpaid bunker costs. Despite an arbitration clause between the owners and charterers, the sub-charterer was obligated to honor the lien, as it was not a party to the arbitration agreement. This decision reinforces that a properly exercised lien on sub-freights can be an effective tool for owners to recover unpaid sums, even in the presence of disputes between charterers and sub-charterers.

Read More »

SHIP SALE – LOSING THE DEAL, LOSING THE DAMAGES? THE LILA LISBON CASE AND THE LIMITS OF MARKET LOSS RECOVERY

In “The Lila Lisbon” [2025] 1 Lloyd’s Rep 101, the court ruled that a buyer cancelling under Clause 14 of the Norwegian Salesform Memorandum of Agreement is not automatically entitled to loss of bargain damages unless the seller is in repudiatory breach. The case clarifies that failing to deliver by the cancellation date does not constitute non-delivery under the English Sale of Goods Act 1979, as the clause grants the buyer a discretionary right rather than imposing a firm obligation on the seller. This decision highlights the importance of precise contract drafting, particularly in ship sale agreements, where buyers must ensure that compensation for market loss is explicitly provided for.

Read More »

CRIMINAL – KIDNAPPING – NO ESCAPE FROM JUSTICE: COURT UPHOLDS LIFE SENTENCE IN HIGH-PROFILE KIDNAPPING CASE

A 10-year-old child was abducted outside a tuition center, held captive, and released only after a RM1.75 million ransom was paid. The appellants were arrested following investigations, with their statements leading to the recovery of a portion of the ransom money. Despite denying involvement, they were convicted under the Kidnapping Act 1961 and sentenced to life imprisonment and ten strokes of the whip. Their appeal challenged the identification process, the validity of the charge, and the admissibility of evidence, but the court found the prosecution’s case to be strong, ruling that the appellants had acted in furtherance of a common intention and were equally liable for the crime.

Read More »
ms_MYMY
× Hubungi Kami