1. ) Dato' Abdul Razak Bin Abdul v 1. ) Suruhanjaya Syarikat Malaysia (WA-24NCC-365-07/2023)

DATO' ABDUL RAZAK BIN ABDUL (NRIC No.: 500318-10-5699)

HAJI ABDUL AZIZ BIN ABDUL (NRIC No.: 470104-10-5007)

YAP CHI KEONG (NRIC No.: 521204-10-6047)

1.

FEDERAL POWER SDN BHD (Company No. 197401000825 (17892-V))

NG ENG KEONG (NRIC No.: 771014-03-6043)

CHE AZIZI BIN CHE WIL (NRIC No.: 691002-10-6681)

SARIDUN BIN ISMAIL (NRIC No.: 630807-02-5441) JUDGMENT A. Introduction [1] The plaintiffs filed an originating summons, seeking declarations that they had resigned as directors of the 2nd defendant on 27 August 2016, and that the 3rd, 4th and 5th defendants were the valid and rightful directors of the 2nd defendant as of the said date. [2] The court dismissed the originating summons, for the reasons set out below. B. Background Facts [3] The 1st plaintiff had previously held shares in Federal Power Holdings Sdn Bhd, formerly known as He disposed of his shares in FPH, pursuant to the following agreements: a. A share sale agreement dated 27 August 2016, in which he sold 180,000 ordinary shares representing 90% of the entire issued and paid-up capital of FPH to SDF Resources Sdn Bhd and SDF Green Technology Sdn Bhd b. A share sale agreement dated 27 April 2017 with SDF Resources Sdn Bhd The SSA 1 and the [4] FPH is the majority shareholder of the 2nd defendant. As part of the transactions leading to the SSA 1, the plaintiffs signed undated letters on their resignations as directors of the 2nd defendant. [5] The plaintiffs claimed they had effectively resigned as directors of the 2nd defendant on the date of the execution of the SSA 1, i.e. 27 August 2016, and that they no longer had any control over the operation and management of the 2nd defendant since the said date. [6] However, they claimed it later came to their attention that the 2nd defendant had lodged a Notification of Change in the Register of Directors, Managers and Secretaries dated 7 June 2017 with the 1st ir directorships and the appointments of the 3rd, 4th and 5th defendants as directors of the 2nd defendant on 7 June 2017. [7] The plaintiffs claimed the Form 49 is inaccurate, and did not reflect the true date of their resignations which is 27 August 2016. [8] As such, the plaintiffs sought, inter alia, the following declarations: a. That they had resigned as directors of the 2nd defendant with effect from 27 August 2016; b. That the 3rd, 4th and 5th defendants are the valid and rightful directors of the 2nd defendant with effect from 27 August 2016; and c. That the Form 49 is invalid, null and void. [9] In their defence, the 2nd to 5th defendants argued: a. That this action is barred by limitation; and b. That the 3rd, 4th and 5th defendants did not consent to being appointed as directors of the 2nd defendant at a date earlier than 7 June 2017. [10] The 1st defendant also argued that not comply with the procedural requirements under section 602 of the plaintiffs to commence this action. C. Issues and Considerations [11] Based on the arguments put forward by the parties, the court took the following issues into account in reaching a determination of this matter: a. Whether this action is barred by limitation; b. Whether this action is procedurally correct; and c. Whether the plaintiffs effectively resigned as directors of the 2nd defendant on 27 August 2016. Issue 1: Is this action barred by limitation? [12] The contention of the 2nd to 5th defendants is that the action is founded on contract, as their resignations are connected to the SSA. Since the plaintiffs claimed they resigned on 27 August 2016, the 2nd to 5th defendants argued that this action should have been filed within six years from the date of their resignations. By the time this action was filed in July 2023, limitation had set in. [13] The argument is premised on section 6(1)(a) of the Limitation Act 1953, which provides that an action founded on contract shall not be brought after the expiration of six years from the date upon which the cause of action accrued. [14] I am unable to agree with this argument. It is erroneous to claim that this action is founded on the SSA. The SSA involves the sale of the shares in FPH by the 1st plaintiff to SDF Resources Sdn Bhd and SDF Green Technology Sdn Bhd. This action relates to the resignations of the plaintiffs and the appointments of the 3rd to 5th defendants as directors of the 2nd defendant. The 2nd defendant is not a party to the SSA. The resignations and appointments may have been effected leading up to the SSA, but they do not arise pursuant to a contractual obligation under the SSA. Thus, issues on the resignations of the plaintiffs and the appointments of the 3rd to 5th defendants are not issues arising from a breach of the SSA. [15] Consequently, section 6(1)(a) of the Limitation Act 1953 would not apply to this action. [16] The 2nd to 5th defendants also referred to section 6(6) of the Limitation Act 1953, which provides that:

Subject to sections 22 and 32 of this Act the provisions of this section shall apply (if necessary by analogy) to all claims for specific performance of a contract or for an injunction or for other equitable relief whether the same be founded upon any contract or tort or upon any trust or other ground in equity. (emphasis added) [17] They argued that as this action involves equitable reliefs, the six-year limitation period under section 6(1)(a) of the Limitation Act 1953 would apply. I am again unable to agree. Section 6(6) must be read together with section 6(1)(a), which provides for the limitation period of six years for actions founded on contract. This means that section 6(6) would only apply if this action is founded on contract. I have concluded that it is not. [18] Instead, this action is premised on the statutory remedy conferred under section 602(4) of the CA 2016. The plaintiffs contend that they are aggrieved by the decision of the 1st defendant in not allowing their application under section 602(1) of the CA 2016. Thus, they are appealing against the decision pursuant to section 602(4) of the CA 2016. [19] On this basis, the limitation period under section 6(1)(a) of the Limitation Act 1953 does not apply, and this action is not barred by limitation. [20] I also considered that Practice Note No. 6/2019: Procedures for Rectification of Documents Lodged and Registered with the Companies Commission of Malaysia dated 5 November 2019 made under section 602(1) of the CA

Paragraph 9 of Practice Note 6/2019 states that the registrar of companies may refuse any application for rectification if: the lodgment date of the document containing the error, [21] Thus, the cut-off time to apply for rectification of a register under section 602(1) of the CA 2016 is set out in Practice Note 6/2019. This further supports the argument that this application is not subject to section 6(1) of the Limitation Act 1953. [22] In the present case, the plaintiffs claimed they issued letters dated 28 May 2020, 2 September 2020 and 22 September 2020 to the 1st defendant to rectify the date of cessation of their directorships with the 2nd The document said to contain the error is the Form 49 dated 7 June 2017. Thus, the application for rectification, three years after the lodgment of the Form 49, well within the timeline referred to in paragraph 9(b) of Practice Note 6/2019. [23] I note that there is no timeline imposed on the filing of an appeal against the decision of the registrar pursuant to section 602(4) of the CA

Nonetheless, I find that this action, filed approximately three years , was filed within a reasonable time without undue delay. Issue 2: Is this action procedurally correct? [24] The 1st argument in objecting to the originating summons is that in commencing this action, the plaintiffs did not comply with the requirements under section 602 of the CA 2016. [25] Section 602(1) of the CA 2016 provides that a person may apply to rectify the register if an entry in the register: contains any matter contrary to law;

contains any matter that, in a material particular, is false or misleading in the form or context in which the matter is included;

by reason of an omission or misdescription has not been duly completed; or

[26] Sub-sections (2) and (3) of section 602 grant powers to the registrar of companies to approve or refuse the application. [27] Section 602(4) then provides an avenue for a person who may be aggrieved by the decision of the registrar. It provides that: [28] The 1st defendant argued that the plaintiffs had not applied to rectify the register in accordance with section 602(1) of the CA 2016. As such, this action commenced under section 602(4) which is an appeal to the court against the decision of the registrar, is premature. [29] The 1st defendant claimed it did not receive the which were issued to the 1st defendant to seek rectification of the date of cessation of their directorships with the 2nd defendant. It also claimed the with Practice Note 6/2019. [30] However, the plaintiffs provided evidence in the form of letters containing stamps of acknowledgments, which show that the 1st defendant had duly acknowledged its . Further, the plaintiffs claimed they were not able to comply with Practice Note 6/2019, as the practice note requires an application to be certified by the company secretary of the company. I agree that in this case, the cooperation of the company secretary of the 2nd defendant is unlikely to be forthcoming, as the 2nd defendant is objecting to the rectification. [31] I am in this regard guided by the decision on the Federal Court in Lim Phin Khian v Kho Su Ming [1996] 1 MLJ 1, where it is held at page 16, that: that where great inconvenience or injustice will follow as a result of requiring strict compliance with a statute, the courts will be disinclined to hold that the provision imposes an obligation even though it may be couched in mandatory terms. In Simpson v AG [1955] NZLR 271, for example, the provisions of the New Zealand Constitution pertaining to the dissolution of Parliament, which were couched in mandatory terms, were said not to have been complied with. This contention, if upheld, would have nullified a large number of Acts of Parliament. The court held that notwithstanding the fact that the relevant provisions in the Constitution used the word 'shall', the provisions were directory only. In so holding, the court was swayed by the consideration that to hold that the provision was mandatory would have caused chaos and extraordinary inconvenience and would have served no useful purpose (emphasis added) [32] In the present case, the mandatory requirements arise from Practice Note 6/2019, and not from the law. Due to the impossibility of complying with Practice Note 6/2019, I hold that the non-compliance is not [33] Thus, I find that the plaintiffs had applied to rectify the register pursuant to section 602(1) of the CA 2016 . The non-response by the 1st defendant is effectively a refusal to approve the application, which gives rise to the right to appeal pursuant to section 602(4) of the CA 2016. [34] As such, I find the filing of this action complies with the procedural requirements in section 602 of the CA 2016. Issue 3: Did the plaintiffs effectively resign as directors of the 2nd defendant on 27 August 2016? [35] I will now move on to the substantive issues raised by the parties. [36] The plaintiffs claimed they had effectively resigned as directors of the 2nd defendant on 27 August 2016. The main documents they relied on to support their claim are the undated letters of resignation they had signed, leading to the execution of the SSA 1. The plaintiffs contend that there was an understanding that documents arising from and/or related to the SSA 1 will have an effective date of 27 August 2016. [37] However, I find there to be no real evidence of this understanding. To demonstrate the alleged understanding, the plaintiffs merely provided an example of a debt settlement agreement that arose from the SSA 1. The debt settlement agreement was executed in September 2016, but had an effective date of 27 August 2016. The plaintiffs argued that this fact supports the understanding. I fail to see how this is so. There is no indication that the debt settlement agreement is connected to the resignations of the plaintiffs, and would reflect the understanding. The mere fact that an agreement connected to the SSA 1 had an effective date of 27 August 2016 does not support the argument that other documents must have the same effective date. [38] What remains clear is that there is no evidence before this court of letters of resignation dated 27 August 2016, or any document lodged with the 1st defendant on the resignations of the plaintiffs on the said date. Hence, the court is unable to conclude or presume that the plaintiffs resigned on 27 August 2016, as claimed. [39] The court also considered three other documents relied on by the plaintiffs to support their claim. [40] The first is a statutory declaration dated 21 June 2023, made by who was the company secretary of the 2nd defendant at the material time. In my view, the statutory declaration does the necessary documents for the appointment of the new directors and that she had reminded one John Goh of the need to lodge the relevant documents on changes of directorships of the 2nd defendant. The statutory declaration does not indicate that documents had in fact been filed in compliance with legal requirements. [41] The second document is a letter dated 1 May 2017 from the 2nd defendant, confirming the 1st 2nd defendant. The 1st defendant argued that it is evident from this letter that he was no longer a director of the 2nd defendant as of that date. [42] However, notwithstanding this letter, it is also in evidence that the 2nd of Particulars to be 11 May 2017 contained the 1st director of the 2nd defendant. This effectively negates his contention that he did not act as a director of the 2nd defendant after 27 August 2016. [43] The third and final document is a letter dated 10 September 2019 issued by the 2nd defendant to the plaintiffs, which confirmed that the new board of directors of the 2nd defendant had taken over the management and operational functions from the plaintiffs. The letter states: -to-day operations and management as a 27 August 2016 and shall be fully responsible in managing all the assets and liabilities of the company notwithstanding the change in the old directorship at a much later date in June 2017. (emphasis added) [44] case that they had effectively resigned on 27 August 2016. On the contrary, the words at a much later date in June 2017 confirm the position that the change in the directorship of the 2nd defendant was in June 2017. [45] I have also considered that the statutory requirements for the appointments of the 3rd to 5th defendants as directors of the 2nd defendant on 27 August 2016 have not been complied with. [46] Section 201 of the CA 2016 requires a person to provide consent in writing on his appointment as a director of a company, and to make a declaration that he is not disqualified from being appointed as a director. [47] As the plaintiffs argued that the appointments of the 3rd to 5th defendants should be declared to be on 27 August 2016, the provisions of only enforced on 31 January 2017. The provisions on the appointment and removal of directors are set out in sections 122 to 129 of the CA 1965. Specifically, section 123(4) of the CA 1965 requires a person to make and lodge a statutory declaration that he: a. Will not be acting in contravention of section 125 of the CA 1965 (which prohibits an undischarged bankrupt from being a director) and section 130 of the CA 1965 (which prohibits a person who is convicted of offences of e.g. fraud and dishonesty from being a director); and b. Consents to act as a director of the company. [48] Thus, the focus of section 123(4) of the CA 1965 and section 201 of the CA 2016 are the non-disqualification of a potential director, and his consent to act. [49] In this case, there is no document to show that the 3rd to 5th defendants had taken steps to comply with section 123(4) of the CA 1965 or section 201 of the CA 2016 prior to 7 June 2017. The court is of the view that inferring the consent of the 3rd to 5th defendants, as suggested by the plaintiffs, is inconsistent with the provisions of the CA 1965 and the CA 2016, and will set a dangerous precedent. These provisions lay out specific requirements that must be complied with, to ensure that checks are in place in the appointment of directors of companies. [50] Finally, the consequence of declaring that the plaintiffs had resigned as directors of the 2nd defendant with effect from 27 August 2016, without having directors appointed in their place would result in a contravention of the legal requirement to ensure that a minimum number of persons remain as directors of the 2nd defendant. In this case, the provisions of the CA 1965 would apply. [51] Section 122 of the CA 1965 provides as follows: Every company shall have at least two directors, who each has his principal or only place of residence within Malaysia.

Notwithstanding anything contained in this Act or in the memorandum or articles of a company or in any agreement with a company, a director of a company shall not resign or vacate his office if, by his resignation or vacation from office, the number of directors of the company is reduced below the minimum number required by subsection (1) and any purported resignation or vacation of office in contravention of this section shall be deemed to be inv (emphasis added) [52] A declaration of the resignations of the plaintiffs on 27 August 2016 can only be granted if there are at least two directors in the 2nd defendant on the date of the resignations. I have held that consent of the 3rd to 5th defendants as directors of the 2nd defendant should not be inferred on them, and as such, a consequent declaration for them to be the valid and rightful directors of the 2nd defendant on 27 August 2016 cannot be given. [53] As such, the consequence of a declaration of the resignations of the plaintiffs will result in there being no directors of the 2nd defendant, and will be a breach of section 122(1) and (6) of the CA 1965. The court cannot give orders that will result in contravention of the laws. D. Decision [54] Based on the considerations as set out, I find that to allow the rectification of the register would be inconsistent with the provisions of the CA 1965 and the CA 2016, and against the interests of all parties involved in these proceedings. [55] Enclosure 1 is dismissed. After brief submissions on costs, the court ordered costs of RM5,000 to be paid by the plaintiffs to each defendant. Dated 20 May 2024 ADLIN ABDUL MAJID Judge High Court of Malaya Commercial Division (NCC6) Kuala Lumpur Counsel: Plaintiffs : Eddie Chuah (together with Mak Ming Jie) of Messrs. Wong & Partners 1st defendant : Cheong Jee Kuan of the Companies Commission of Malaysia 2nd defendant : TJ Lee of Messrs. TJ Lee 3rd defendant : Justin Ong (together with Hoo Xin Tung) of Messrs. Justin Faye & Partners 4th defendant : Muhamad Hafizan Shafuan Kamarulzaman of Messrs. Hasshahari & Partners 5th defendant : Mohd Jamil Abdul Rahman of Messrs. Razif Jamil & Partners