Overview

The Corporate Registry System (CRS) is the Companies Commission of Malaysia’s (“CCM“) new digital platform for statutory company lodgments. It replaces previous systems including MyCoID, e-Secretary, and traditional over-the-counter lodgment services.

Phase 1 of the rollout officially went live on 14 July 2026, marking the first phase of a broader three-phase rollout.

What Phase 1 Covers

Phase 1 encompasses 22 services, including:

• Incorporation & Names: Name search and company incorporation
• Corporate Secretarial & Administration: Corporate intermediaries registration, corporate administration, and company information updates
• Charges: Registration and management of charges
•  Insolvency & Striking-Off: Striking-off applications and insolvency-related services (including Corporate Voluntary Arrangements, Receivership, Asset Management, Judicial Management, and Winding-Up)
• Other Services: Interest schemes, appeals to the Minister, court orders, BizTrust, over-the-counter services, relodgements, applications for extension of time (EOT), rectifications, and compound-related matters.

Accessing the CRS Portal

Transition Relief: Late Lodgement Fee Waiver

To facilitate a smooth transition, CCM has introduced an automatic late lodgement fee waiver:

• Waiver Period: 14 July 2026 – 30 September 2026
• Applicability: The waiver applies automatically to eligible late lodgements made via CRS during this period, including:
  • Documents whose lodgement was impacted by the CRS system downtime period (i.e., 7 July 2026 – 13 July 2026).
  • Documents that were due for lodgement during this period but lodged after the prescribed statutory deadline.

• Lodgement Fees: Lodgement fees remain unchanged under the CRS.
• Express Filing: Express filing services are not available through CRS.
• Counter Services: Services offered at the physical CCM service counters are now limited.
• Annual Returns (“AR”) & Financial Statements (“FS”): AR and FS continue to be filed separately via the Malaysian Business Reporting System (“MBRS“).*

*Note on MBRS 2.0 Fee Waiver: In view of the peak filing period, CCM has separately granted a waiver of late lodgement fees for AR and FS lodged via MBRS 2.0 from 1 July 2026 to 31 August 2026. This applies to late lodgement fees arising from delays exceeding 7 days but not exceeding 3 months (provided documents are lodged on or before 31 August 2026). This waiver is separate from the general CRS late lodgement fee waiver. 

In Essence:

Disclaimer: The article is based on information published on the CCM’s official website as of the date of publication and is subject to change. Kindly refer to the CCM’s official website here for the latest announcements and further guidelines. 

Our Corporate team regularly advises local and international corporations on mergers and acquisitions (M&A), cross-border transactions, joint ventures, and corporate restructuring. We also provide comprehensive support for shareholders’ agreements and general commercial advisory to help businesses navigate the Malaysian regulatory landscape.

For legal assistance or further inquiries regarding your corporate matters, please feel free to contact us.

Background

• KL Petrogas encountered financial difficulties following enforcement action by SA Puncak under financing facilities exceeding RM22 million. SA Puncak subsequently terminated the financing facilities and appointed Receivers and Managers over KL Petrogas pursuant to the debenture.[7]
• In separate proceedings (Suit 787), the High Court held that certain agreements relating to the pre-factoring facility were unenforceable and that the debenture was void to the extent it secured that facility. Accordingly, SA Puncak was treated as an unsecured creditor for KL Petrogas’s proposed restructuring. The decision remains subject to appeal.[8]
• Against this backdrop, KL Petrogas sought an order from the HC to convene meetings of its creditors for the purposes of considering and approving a scheme of arrangement.
• Under the initial proposed scheme (“Scheme 1”), all unsecured creditors were placed in a single class and would be repaid on a pari passu basis.
  • However, SA Puncak, holding approximately 29% of the unsecured debt, made clear that it intended to vote against Scheme 1.[9]
• To overcome this, KL Petrogas proposed a revised scheme (“Scheme 2”) by invoking the cross-class cram down regime under S.368D CA 2016, as illustrated below.
  • The strategy for Scheme 2 was straightforward: if Class A achieved the requisite 75% statutory majority, KL Petrogas could seek to invoke the cram down mechanism under S.368D CA 2016 to bind Class B notwithstanding SA Puncak’s dissent. The HC described this as an “audacious move”[10].

• The question before the HC was whether the proposed cross-class structure presented an obvious “roadblock” or abuse of process such that the HC should refuse to convene the creditor meetings.

HC Decision & Key Findings

The HC granted the convening order after considering comparative jurisprudence from the UK, US and Singapore. Central to the HC’s reasoning was the legislative purpose underlying S.368D CA 2016.[11] As the HC observed:

“…the very objective and purpose of the cram down legislation, to prevent a recalcitrant creditor from vetoing a beneficial scheme that is wanted by the other creditors”[12].

The HC’s reasoning can broadly be distilled as follows: –

(1) The 75% Statutory Threshold [13]

(2) The Applicable ‘Fairness’ Test

• Under a conventional scheme of arrangement[15], the Court generally applies the “limited rationality” test, i.e., whether an intelligent and honest creditor, acting in their own interest, could reasonably approve the scheme.
• However, the HC held that this test is not appropriate in the context of cross-class schemes[16]. Unlike a conventional scheme, a cross-class cram down necessarily involves a creditor class that has not approved the proposed scheme by the requisite statutory majority. As such, fairness cannot simply be assumed from creditor approval.
  • The HC further observed that the “limited rationality” test merely serves as a “cross-check” to an affirmative vote of the creditor class and therefore has no application where the Dissenting Class has not approved the scheme.
  • Instead, the HC held that the appropriate inquiry is whether the restructuring achieves a fair distribution of the benefits it generates among the affected creditor classes[17].
• Accordingly, the Court must consider (1) whether the restructuring benefits are fairly distributed among creditor classes and (2) whether the dissenting class is treated fairly and equitably.
• On the facts, the HC found no unfairness at the convening stage. Scheme 2 afforded identical treatment to both classes of unsecured creditors, with all creditors entitled to full repayment on a pari passu [18]

(3) Deliberate Class Composition is not, at the Convening Stage, an Automatic Abuse of Process (S.368 CA 2016)[19]

• SA Puncak argued that placing it into a separate class solely to facilitate a cram down amounted to a “capricious use” of S.368D CA 2016 and an abuse of process. The question before the HC was whether the proposed class composition constituted a “roadblock” or whether Scheme 2 was proposed in bad faith or otherwise amounted to an abuse of process such that the convening order should be refused.
• While recognising that such an argument may be correct under the conventional scheme framework, the HC held that the legal landscape had changed with S.368D CA 2016. At the convening stage, the HC observed that the purpose of the regime is to prevent, in appropriate cases, a dissenting creditor from exercising an unjustified veto over an otherwise beneficial restructuring.
  • In this regard, the HC held that it could “see no reason why a company may not take advantage of the cram down provisions to cram down a hostile creditor with a veto right in the appropriate case.”
• Nevertheless, the HC emphasised that this did not amount to a final determination that the proposed class composition was permissible. Whether the proposed class composition was ultimately bona fide and whether Scheme 2 satisfied the statutory safeguards under S.368D CA 2016 remained fact-sensitive questions to be determined at the sanction stage[20].

Key Takeaways

Conclusion

The decision provides early judicial guidance on Malaysia’s cross-class cram down regime, clarifying that the conventional “limited rationality” test does not apply in the S.368D context and that deliberate creditor class composition is not, by itself, impermissible at the convening stage. However, whether such restructuring is bona fide and whether the statutory safeguards are ultimately satisfied remain matters for determination at the sanction stage.

More broadly, the decision highlights the significance of S.368D in addressing the limitations of conventional schemes, where a single dissenting creditor holding a blocking position could prevent an otherwise viable restructuring from proceeding. By limiting such blocking power while preserving judicial oversight, the regime enables distressed companies to pursue genuine restructuring efforts consistent with the legislative objective of promoting corporate rescue.

Our Dispute Resolution practice specialises in high-stakes civil, commercial and corporate disputes, including shareholders’ disputes, breach of contract, and debt recovery. We have experience representing clients at all levels of the Malaysian Courts, providing strategic and commercially sensible solutions to complex legal challenges.

If you require advice or representation in a legal dispute, please reach out to our team via our contact page.

Disclaimer: The content of this article is intended for general informational purposes only and does not constitute formal legal advice. Please refer to the Grounds of Judgment in the Federal Court Civil Appeal No. 02(f)-9-03/2025(W).

If you found this article useful, please feel free to download the PDF document in the link here.

The Statutory Right of Members to Requisition a Meeting

S.311(1) and (3) CA 2016 confer upon members who satisfy the prescribed statutory threshold the right to require the directors to convene a meeting of members.

The requisite threshold is: –

• at least 10% of the issued share capital carrying voting rights; or
• where the company has no share capital, at least 5% of the total voting rights of all members.

At first glance, the use of the plural word “members” in S.311 may suggest that a requisition must be made by more than one member.

However, it has been held that S.311 is equally capable of applying to a single member[2], provided that the requisite statutory threshold is satisfied.

In addition, S.311(2) CA 2016 prescribes several formal requirements for a valid requisition. The requisition must: –

• be in hard copy or electronic form;
• state the general nature of the business to be transacted;
• where appropriate, include the text of the proposed resolution; and
• be signed or otherwise authenticated by the requisitioning member(s).

Statutory Timeframe to Call the Meeting

Upon receipt of a requisition, the statutory timeframe is clear. The directors shall: –

• call the meeting within 14 days of receiving the requisition; and
• ensure that the meeting is held within 28 days after the notice convening the meeting is issued.

Where the directors fail or refuse to do so, S.313 CA 2016 entitles the requisitioning members to convene the meeting themselves, subject to compliance with the remaining statutory requirements.

Significantly, any reasonable expenses incurred by the requisitioning members are reimbursable by the company, which is in turn entitled to retain the corresponding amount from any fees or other remuneration payable to the defaulting director(s)[3].

Do the Directors Have No Discretion?

The statutory framework naturally raises an important question.

Does it mean that directors are obliged to convene every requisitioned meeting?

This is not merely a theoretical question. It was, in fact, the central issue in a shareholder dispute in which we previously acted successfully for the directors of a company. In that matter, the directors were required to determine whether they were legally obliged to convene a members’ meeting pursuant to requisitions which, amongst others, contained proposed resolutions that were prima facie unlawful.

Taken to its logical conclusion, an interpretation that the directors have no discretion whatsoever would effectively require the directors to convene meetings even where the proposed business or resolution is plainly unlawful, contrary to the company’s constitution, or incapable of being validly implemented.

Such a result would be difficult to reconcile with the directors’ broader duties to act in the best interest of the company and in accordance with its constitution.

This issue must also be considered in light of S.311(5) CA 2016, a provision introduced under the CA 2016, which provides that: –

(5) A resolution may properly be moved at a meeting unless the resolution: –

(a) if passed, would be ineffective whether by reason of inconsistency with any written law or the constitution;

(b) is defamatory of any person;

(c) is frivolous or vexatious; or

(d) if passed, would not be in the best interest of the company.

Presently, to the best of our knowledge, there appears to be no reported Malaysian decision directly considering the scope or application of S.311(5) in the context of directors refusing to convene a meeting pursuant to a members’ requisition.

Guidance from Other Commonwealth Jurisdictions

In the absence of direct Malaysian authority, guidance may be drawn from other Commonwealth jurisdictions.

A. Position in the United Kingdom

In this regard, S.303(5) of the UK Companies Act 2006 is substantially similar to S.311(5) of our CA 2016.

S.303(5) of the UK Companies Act 2006 provides that:-

(5) A resolution may properly be moved at a meeting unless:-

(a) it would, if passed, be ineffective (whether by reason of inconsistency with any enactment or the company’s constitution or otherwise);

(b) it is defamatory of any person; or

(c) it is frivolous or vexatious.

In Kaye v Oxford House [2019] EWHC 2181 (Ch), the English High Court considered the purpose and operation of S.303(5) of the UK Companies Act 2006 and observed, amongst others, that:-

• upon receiving a members’ requisition, the directors are entitled to consider the proposed business and the text of the proposed resolutions (if applicable) during the statutory period prescribed for convening the meeting;
• the purpose of that statutory period is to enable the directors to determine whether the proposed resolutions may properly be moved at the meeting;
• where a proposed resolution falls within one of the statutory exceptions in S.303(5), the directors are not required to convene the meeting;
• S.303(5) serves as a safeguard against abuse of the requisition process by the “lunatic fringe” (i.e. “those individuals whether alone or in concert with others, who wish to abuse the requisition process as a means of causing trouble, or making themselves a nuisance or trying to obtain the oxygen of publicity for causes that are only indirectly associated with the business and affairs of the company”);
• where the requisitioning member disputes the directors’ decision, the issue ultimately falls to be determined by the Court.

In fact, this was not a new principle. Even prior to S.303(5) of the UK Companies Act 2006, the English Courts had recognised that directors need not convene meetings solely for the purpose of considering resolutions that were incapable of producing any legal effect[4].

B. Other Commonwealth Jurisdictions

Similarly, the underlying principle stated above has also been recognised in other Commonwealth jurisdictions.

C. Position in Malaysia Prior to S.311(5) CA 2016 

Back in Malaysia, even prior to the enactment of S.311(5) CA 2016, the learned authors of Halsbury’s Laws of Malaysia observed that: –

“If the object of the meeting is to do that which cannot legally be carried into effect or to pass a resolution which is ultra vires the meeting, then the directors ought not to be required to convene the meeting. If such a meeting is in fact held and a resolution is passed, the directors are not bound to comply with it. The resolution is void and of no effect. There is nothing in the Companies Act 1965 to suggest that the directors must act on requisition for a meeting having as an object that which is not within the powers of the meeting. The directors are well entitled, on such a requisition, to decline to call a meeting…”

Viewed in this context, S.311(5) of the CA 2016 appears to reflect a principle long recognised across Commonwealth jurisdictions, namely that the statutory right to requisition a meeting does not ordinarily require directors to convene meetings for the purpose of considering resolutions which are unlawful, beyond the powers of the general meeting, or otherwise incapable of being validly implemented.

It is also noteworthy that, unlike S.303(5) of the UK Companies Act 2006, our S.311(5) CA 2016 contains an additional limb [i.e. limb (d) – a resolution, if passed, would not be in the best interest of the company].

The additional limb suggests a wider basis upon which directors may determine whether a proposed resolution may properly be moved. However, in the absence of judicial consideration of S.311(5)(d) CA 2016 by the Malaysian Courts, the precise scope and operation of this provision remain open to discussion.

[1] Golden Plus Holdings Bhd v Teo Kim Hui [2021] 7 MLJ 852. para [28]

[2] EKA Noodle Bhd v Norhayati bt Tukiman [2021] MLJU 1586, para [28] – [31]

[3] S.313(6) & (7) CA 2016

[4] Rose v McGivern and others [1998] 2 BCLC 593, p.604 – 605

[5] Credit Development Pte Ltd v IMO Pte Ltd [1993] 1 SLR (R) 68. para [14] – [19]

Our Dispute Resolution practice specialises in high-stakes civil, commercial and corporate disputes, including shareholders’ disputes, breach of contract, and debt recovery. We have experience representing clients at all levels of the Malaysian Courts, providing strategic and commercially sensible solutions to complex legal challenges.

If you require advice or representation in a legal dispute, please reach out to our team via our contact page.

Disclaimer: The content of this article is intended for general informational purposes only and does not constitute formal legal advice.

If you found this article useful, please feel free to download the PDF document in the link here.

In M&A deals, Condition Precedent (“CP”) and Condition Subsequent (“CS”) may look similar on paper, but they operate very differently. A missed CP stops the deal, and a missed CS triggers consequences after completion.

Find out how these conditions impact your M&A transactions.

What are Conditions Precedent?

What are Conditions Subsequent?

• CPs are mostly your deal-breakers, and CSs are most likely your housekeeping items.
• Navigating CPs and CSs can make or break the success and timing of your M&A deal.
• Parties should clearly define the timing, responsibility and consequences for each condition.
• Use CP / CS checklists to track fulfilment and avoid last-minute delays.
• Align CPs and CSs with representations, warranties, MAC and indemnity clauses for effective risk management.

In Essence:

Disclaimer: The content of this article is intended for general informational purposes only and does not constitute formal legal advice.

Our Corporate team regularly advises local and international corporations on mergers and acquisitions (M&A), cross-border transactions, joint ventures, and corporate restructuring. We also provide comprehensive support for shareholders’ agreements and general commercial advisory to help businesses navigate the Malaysian regulatory landscape.

For legal assistance or further inquiries regarding your corporate matters, please feel free to contact us.

ASICS Corporation has announced plans to separate its high-growth lifestyle brand Onitsuka Tiger into a standalone, wholly owned subsidiary, OT GROUP, with the reorganisation expected to take effect on 1 January 2027. Despite the separation, ASICS will remain the sole shareholder of OT GROUP, with the restructuring aimed at streamlining decision-making and strengthening Onitsuka Tiger’s global competitiveness.

From a strategic standpoint, the reorganisation reflects a growing trend among multinational groups to separate high-performing business units into dedicated entities, enabling greater operational autonomy while retaining ownership. Such carve-out structures can sharpen brand positioning, enhance management focus and provide greater strategic flexibility for future corporate actions. This can also be seen as part of a risk management strategy.

Taken together, these developments highlight how corporate restructurings can be as significant as traditional M&A transactions in unlocking value, improving governance, risk allocation and positioning businesses for long-term growth.

Our Corporate team regularly advises local and international corporations on mergers and acquisitions (M&A), cross-border transactions, joint ventures, and corporate restructuring. We also provide comprehensive support for shareholders’ agreements and general commercial advisory to help businesses navigate the Malaysian regulatory landscape.

For legal assistance or further inquiries regarding your corporate matters, please feel free to contact us.

In every merger and acquisition (“M&A”) or transactional exercise, conditions precedent (“CPs”) act as critical checkpoints to ensure the business and the entity are in an acceptable state before completion. They help allocate risk and set expectations.

It is important to understand CPs and negotiate them well, as they directly affect deal certainty and timelines.

CPs aren’t just formalities. They safeguard the transaction and ensure that the buyer gets the business they expect.

To be effective, CPs should always be:

1. Clear: Leaves no room for multiple interpretations.
2. Achievable: To be negotiated within a realistic timeframe.
3. Necessary: Focusing only on conditions that materially impact the buyer’s risk.

In Essence:

Disclaimer: The content of this article is intended for general informational purposes only and does not constitute formal legal advice.

Our Corporate team regularly advises local and international corporations on mergers and acquisitions (M&A), cross-border transactions, joint ventures, and corporate restructuring. We also provide comprehensive support for shareholders’ agreements and general commercial advisory to help businesses navigate the Malaysian regulatory landscape.

For legal assistance or further inquiries regarding your corporate matters, please feel free to contact us.

Brief Background Facts

• The Parties:
  • TSH and LPK are the founders and directors of Kalysta Sdn Bhd (“Appellants”), an online weight-loss supplement marketing company in Malaysia. NZX (“Respondent”) served as a high-ranking General Agent of Kalysta Sdn Bhd, managing a subgroup of over 400 sales representatives.
• The Dispute:
  • Following internal company investigations into the Respondent’s alleged involvement with a separate commercial entity and an unauthorised marketing incident, the Appellants terminated the Respondent’s agency relationship on 26.6.2021. The Appellants also pursued a counterclaim for the return of performance bonuses and account access.
• The Impugned Publications:
  • Over a compressed period of eight days between 16.7.2021 and 24.7.2021, the Appellants published a series of seven statements (“Impugned Statements”). These publications were disseminated within closed online networks, such as WeChat and Instagram group chats, where the Respondent was described in terms including “compulsive liar” and “manipulative leader”.[4]

High Court (“HC”) Decision

• The HC found that each of the Impugned Statements bore defamatory meanings and adopted a segmented approach in assessing damages, treating each Impugned Statement as giving rise to separate liability by reference to their respective publications made on different occasions[5].
  • The HC awarded separate blocks of general and aggravated damages against each Appellant for the respective Impugned Statements, culminating in a cumulative liability of RM600,000.00.
• Pertinently, having found the Impugned Statements to be defamatory, the HC further ordered the Appellants to tender an apology to the Respondent based on the language and contents proposed by her.[6]
• Dissatisfied, the Appellants appealed against the HC’s decision to the CA.

Decisions & Key Findings

The CA affirmed the HC’s decision that the Impugned Statements were defamatory of the Respondent and rejected the pleaded defences. However, the CA set aside the HC’s order for an apology to be issued[7] and reduced the quantum of damages awarded.

(1) Court’s Jurisdiction to Compel an Apology as a Remedy

• The Main Judgment essentially held that the Court has no jurisdiction to order the publication of an apology under the law.

• On the other hand, the Supporting Judgment, while concurring that no apology should be ordered on the facts, contemplated the possibility that the Court may, in appropriate cases, exercises its inherent jurisdiction to order corrective non-monetary remedies[13].

(2) Assessment of Damages: Cases of Successive Publications

Separately, the CA also reduced the quantum of damages, adopting a global assessment and holding that the Impugned Statements formed part of a continuous course of conduct and should not be assessed in a fragmented or duplicative manner.

• Continuous Course of Defamation[19]: Although each defamatory publication constitutes a separate cause of action, the CA held that the seven Impugned Statements should not be treated in a fragmented manner. Published within a compressed timeframe and arising from the same underlying allegations, they formed part of a coherent narrative. A global assessment of damages, therefore, better reflected the cumulative nature of the reputational harm and avoided artificial fragmentation, duplicative compensation and mechanical multiplication of awards.

• Absence of Proven Substantial Harm[20]: While defamation is actionable per se, the CA found no clear evidence of financial loss or significant reputational impact. Having regard to comparable authorities, the CA accordingly considered a global award of RM 100,000.00 to be fair, reasonable and proportionate in the circumstances.

Key Takeaways

Conclusion

The decision is significant for clarifying the limits of remedial relief in Malaysian defamation law.

The Main Judgment reaffirmed that a compelled apology is not a permissible post-trial remedy and that the Court’s jurisdiction must be grounded in recognised heads of relief.

The Supporting Judgment, meanwhile, highlights the possibility that corrective non-monetary remedies may be available in appropriate cases, particularly where reputational harm arises within closed online networks.

Our Dispute Resolution practice specialises in high-stakes civil, commercial and corporate disputes, including shareholders’ disputes, breach of contract, and debt recovery. We have experience representing clients at all levels of the Malaysian Courts, providing strategic and commercially sensible solutions to complex legal challenges.

If you require advice or representation in a legal dispute, please reach out to our team via our contact page.

Disclaimer: The content of this article is intended for general informational purposes only and does not constitute formal legal advice. Please refer to the Grounds of Judgment in the Federal Court Civil Appeal No. 02(f)-9-03/2025(W).

If you found this article useful, please feel free to download the PDF document in the link here.

Berkshire Hathaway has announced its proposed acquisition of Taylor Morrison Home Corporation, one of the largest homebuilders in the United States, in an all-cash transaction valued at approximately US$8.5 billion. The deal marks the first major acquisition under Berkshire’s new Chief Executive Officer, Greg Abel, and reflects Berkshire’s continued commitment to the US housing market.

Beyond expanding Berkshire’s housing portfolio, the transaction is expected to complement its existing housing and building products businesses. Notably, Berkshire has indicated in its announcement that it intends to eventually unify its site-built homebuilding operations into a combined platform, signalling a strategic move towards greater scale and operational integration in the sector.

Taken together, this deal demonstrates how strategic acquisitions can be deployed to strengthen market position during cyclical downturns, while highlighting the role of long-term capital in driving consolidation within mature industries.

Our Corporate team regularly advises local and international corporations on mergers and acquisitions (M&A), cross-border transactions, joint ventures, and corporate restructuring. We also provide comprehensive support for shareholders’ agreements and general commercial advisory to help businesses navigate the Malaysian regulatory landscape.

For legal assistance or further inquiries regarding your corporate matters, please feel free to contact us.

Continuing from Part 1, let’s uncover more hidden liabilities that Buyers should watch out for in an M&A transaction.

Key Areas to Uncover:

The above list is not exhaustive – the scope and depth of liabilities vary based on the target’s business, structure and industry.

A detailed and transaction-specific due diligence is therefore crucial to uncover hidden liabilities and shield the value of a buyer’s investment.

In Essence:

Disclaimer: The content of this article is intended for general informational purposes only and does not constitute formal legal advice.

Our Corporate team regularly advises local and international corporations on mergers and acquisitions (M&A), cross-border transactions, joint ventures, and corporate restructuring. We also provide comprehensive support for shareholders’ agreements and general commercial advisory to help businesses navigate the Malaysian regulatory landscape.

For legal assistance or further inquiries regarding your corporate matters, please feel free to contact us.

Background

The dispute arose out of a joint venture (“JV”) for an integrated commercial development in Kuala Lumpur known as the “Imbi Project”.

• The Appellant, ISM Sendirian Berhad (“ISM”), owned by Dato’ Ray Cheah (“Dato Ray”) and his wife, held a 30% minority equity stake in five JV companies incorporated to acquire 11 parcels of land for the project.[2]The remaining 70% majority stake was held by the 6^th Respondent, MPHB Capital Berhad (“MPHB”).
• The five JV companies (1^st – 5^th Respondents) were structured as single-purpose vehicles, intended solely for land acquisition for the project rather than ongoing commercial operations[3].
• Although a draft shareholders’ agreement was prepared, it was never executed. The parties proceeded on the mutual understanding that they were bound by an oral agreement.[4]

The dispute concerned funding obligations[5]:

• ISM contended that the funding was split into cash and loan components, limiting its obligation to 30% of the cash portion (approximately 9% of the total acquisition costs).
• MPHB countered that funding obligations must strictly follow a 30:70 equity-based contribution across the board.

Following this disagreement, ISM commenced proceedings under s.181 of the CA 1965[6] alleging, amongst others, minority oppression, including funding demands, dilution via rights issues, and the imposition of interest on shareholder advances.

MPHB counterclaimed, amongst others, seeking a judicial declaration that the JV arrangement had been lawfully terminated by reason of ISM’s alleged breach of funding obligations, alongside claims for interest and opportunity costs[7].

High Court (“HC”) & Court of Appeal (“CA”) Decision

The HC found in ISM’s favour on three out of the five grounds. The remaining two grounds were dismissed, and no appeal was pursued against those findings. [8]

The CA reversed this decision, holding that the core dispute concerned the oral shareholders’ agreement between ISM and MPHB. As it did not relate to the “affairs of the company”, it was a private matter falling outside the statutory scope of s.181 of the CA 1965. [9]

Leave Questions at FC

The FC essentially granted leave on two questions [10]: –

Decisions & Key Findings

The FC dismissed both of the Appellant’s appeals and found no appealable error warranting appellate intervention.

(1) The Scope of Jet-Tech & “Affairs of the Company”

The FC undertook a close examination of Jet-Tech, in particular, on paragraph 37.

• The FC reaffirmed that a claim under s.181 of the CA 1965 requires that the conduct complained of must relate to the “affairs of the company”. In doing so, it clarified that Jet-Tech does not establish a blanket prohibition against oppression claims founded on breaches of shareholders’ agreements, and that paragraph 37 must be read in its factual context.

“[70] … there is no express pronouncement or indication in paragraph 37 or any part of the grounds of judgment that any breach of the shareholders’ agreement is not actionable under section 181 of the CA 1965”.

• The critical inquiry is whether the conduct complained of, in substance, relates to the affairs of the company.
• The phrase “affairs of the company” is broad and encompasses, amongst others, capital structure, dividend policy, voting rights, and generally “all matters which may come before the board for consideration”.[11] However, this broad formulation does not extend to purely inter se disputes between shareholders.
• The FC drew a clear distinction: “the company’s affairs cannot be equated with those of its shareholders”. Private arrangements remain a matter for private law remedies, if any[12].
• Applying these principles, the FC held that the principle of law in paragraph 37 of Jet-Tech is correct and its application is inherently fact-sensitive. Accordingly, Question 2 was answered in the affirmative. [13]
• On the facts, the five JV companies were passive special purpose vehicles with limited operational activity, incorporated solely for land acquisition, with no substantive business operations. The FC agreed with the CA that, in light of the nature of the JV companies as passive holding vehicles, the dispute did not concern the “affairs of the company”.[14]
• In these circumstances, the FC held that the requirement of conduct relating to the “affairs of the company” was not satisfied and the oppression claim under section 181 could not be sustained.[15]

(2) Establishing a Quasi-Partnership

The FC rejected the Appellant’s alternative argument that the JV amounted to a “quasi-partnership” capable of invoking equitable standards of fairness.

• A quasi-partnership requires a foundation of personal relationship, mutual trust, and confidence, typically arising from prior or long-standing dealings.[16]

• On the facts, ISM and MPHB had no prior dealings or business transactions, and their dealings in relation to the JV were limited and commercial in nature[17].

• The JV was negotiated and structured as an arm’s length transaction between business entities, where MPHB treated it purely as a standard commercial investment proposal.

• Accordingly, the factual threshold for a quasi-partnership was not met, and equitable considerations were not engaged.[18]

Key Takeaways

Conclusion

The FC’s decision confirms that paragraph 37 in Jet-Tech should not be read as establishing a categorical exclusion of minority oppression claims simply because the dispute concerns a shareholders’ agreement.

The critical inquiry remains whether, in substance, the impugned conduct relates to the “affairs of the company” under s.181 of the CA 1965, in which case shareholders’ agreement matters could still be the subject matter of a claim under s.181.

Ultimately, the ruling turns on characterisation: whether the alleged wrong implicates the “affairs of the company” or remains a private dispute between shareholders.

Our Dispute Resolution practice specialises in high-stakes civil, commercial and corporate disputes, including shareholders’ disputes, breach of contract, and debt recovery. We have experience representing clients at all levels of the Malaysian Courts, providing strategic and commercially sensible solutions to complex legal challenges.

If you require advice or representation in a legal dispute, please reach out to our team via our contact page.

Disclaimer: The content of this article is intended for general informational purposes only and does not constitute formal legal advice. Please refer to the Grounds of Judgment in the Federal Court Civil Appeal No. 02(f)-9-03/2025(W).

If you found this article useful, please feel free to download the PDF document in the link here.