Hartalega Holdings Berhad v Dr. Danaraj A/L Nadarajah (BA-22NCC-189-12/2020)

BETWEEN HARTALEGA HOLDINGS BERHAD [COMPANY NO.: 741883-X]

HARTALEGA SDN BHD [COMPANY NO.: 75398-K]

MUN HEALTH PRODUCT (INDIA) PVT. LTD. [U74120MH2012FTC236674] …PLAINTIFFS AND DR. DANARAJ A/L NADARAJAH [NRIC No.: 540806-07-5317] …DEFENDANT GROUNDS OF JUDGMENT INTRODUCTION [1] These are the Court’s grounds of judgment following a full trial of the Plaintiffs’ claim and the Defendant’s counterclaim. [2] The trial proceeded over 11 non-consecutive days. The Plaintiffs called six witnesses and the Defendant called five. I considered the pleadings, the agreed facts, the issues to be tried, the bundles of documents, the witness statements, the expert evidence, the oral testimony, and the parties’ written submissions and replies. 02/06/2026 00:23:52 Kand. 220 [3] At the close of the trial, I allowed the Plaintiffs’ claim, entered judgment against the Defendant, dismissed the counterclaim, and granted the declaratory and consequential reliefs set out in the judgment. I also ordered damages to be assessed, interest at 5% per annum on all damages awarded from the date of judgment until full settlement, and costs of RM90,000.00 to the Plaintiffs. [4] The central question was not whether the Defendant could lawfully carry on business after leaving Hartalega. It was whether, while still holding senior positions of trust within the Hartalega Group, he used the Plaintiffs’ employees, information, resources, and opportunities to advance ventures connected with Snap Asia, Snap Trade, Snap Home, Dana Healthcare, and related proposed business activities. [5] For the reasons set out below, I found that the Plaintiffs proved their claim on a balance of probabilities and that the Defendant failed to prove the legal and factual basis of his counterclaim. [6] I have set out these reasons in some detail because the claim engaged several related but distinct duties. Each issue had to be determined by reference to the pleaded case, the contemporaneous documents, the witness evidence, the parties’ submissions, and the applicable statutory and common law principles. I did not approach the case on the footing that a senior officer is liable merely because a business idea was discussed. Liability in this case rests on proved instances of instruction, use of employees and resources, conflict of interest, absence of authority, and the Defendant’s own admissions in cross-examination. THE PARTIES AND THE WITNESSES [7] The 1st Plaintiff, Hartalega Holdings Berhad, is an investment holding company incorporated in Malaysia. Its shares are listed on the Main Market of Bursa Malaysia. The 2nd Plaintiff, Hartalega Sdn Bhd, is a wholly-owned subsidiary of the 1st Plaintiff and is the principal operating entity within the Hartalega Group for the manufacture and supply of nitrile gloves. The 3rd Plaintiff, Mun Health Product (India) Pvt Ltd, is an Indian incorporated company set up in 2012. The 2nd Plaintiff held 81% of the shares in the 3rd Plaintiff. The Defendant held 19% of the shares and was a director of the 3rd Plaintiff. [8] The Defendant, Dr Danaraj a/l Nadarajah, was at material times an Executive Director of the 1st Plaintiff, a Corporate Advisor and employee of the 2nd Plaintiff under the employment contract dated 11 October 2011, and a director of the 3rd Plaintiff. He was not a junior employee. He was a senior officer who was entrusted with the management and operations of the Hartalega Group’s business in India and China, including the 3rd Plaintiff. [9] The Plaintiffs called Mr Nikhil Bedi (PW1) and Mr Sachin Jayant Yadav (PW2), both from Deloitte; Ms Swapnalee Dinesh Shelar (PW3); Mr Prakash Vijay Salve (PW4); Mr Maria Bala Ravi Theja Kalluri (PW5); and Mr Kuan Mun Leong (PW6). The Defendant called, Ms Anupama Kaza Kilaru (DW1); Mr Inho Gregory Pak (DW2); Mr Eswarapu Taraka Venkata Ravi (DW3), the Defendant himself (DW4); and Mr Naidu Sunkari (DW5). [10] PW1 and PW2 were the Plaintiffs’ expert witnesses from Deloitte. PW3, PW4 and PW5 were employees of the 3rd Plaintiff. Their evidence was important because they were the employees who received instructions from the Defendant and were involved in the matters which gave rise to the Plaintiffs’ claim. PW6 gave evidence on behalf of the Plaintiffs on the Defendant’s roles, resignation, the discovery of the alleged breaches, the accounting concerns, the ESOS issue and the counterclaim. [11] DW1 was the Defendant’s expert witness from Truth Lab. DW2 was from Glovepak. DW3 and DW5 were from Schemax. THE PLEADED CASE AND THE DEFENCE [12] The Plaintiffs’ pleaded case was that the Defendant, while occupying senior positions in the Hartalega Group, acted in conflict with the Plaintiffs’ interests. They alleged that he used the 3rd Plaintiff’s employees, resources, information, systems and opportunities to plan, prepare or advance private business ventures without the informed consent or ratification of the Plaintiffs. [13] The Plaintiffs’ case was focused. It was not an attempt to impose a general post-employment restraint. It was a complaint about conduct during the currency of the Defendant’s fiduciary and employment relationships with the Plaintiffs. [14] The Defendant denied the claim. He contended that his duties to each Plaintiff were separate and distinct; that his employment contract did not contain any restraint of trade clause; that he was free to trade after resignation; that the activities complained of were for the benefit of the 3rd Plaintiff or were part of the wider Hartalega business strategy; that some matters were merely preparatory and did not result in completed transactions; and that the Deloitte report was flawed and relied on WhatsApp messages out of context. [15] I have considered the Plaintiffs’ objection that a number of matters advanced in the Defendant’s submissions were either not pleaded or departed from the pleaded defence. These included the contentions that the Defendant was only in part-time employment, that this Court was the wrong jurisdiction or not the proper forum, that a multi-location or globalisation strategy explained the impugned conduct, and that the separate duties owed to each Plaintiff excluded liability altogether. [16] I have not treated those unpleaded matters as independent defences. Where they were supported by pleaded facts or by evidence properly admitted at trial, I considered them only as background or context. They did not displace the pleaded issues. The determinative question remained whether, while holding positions of trust, the Defendant used the Plaintiffs’ employees, information, systems, opportunities and resources for unauthorised private or third-party purposes. [17] By counterclaim, the Defendant asserted that he was entitled to 30% equity in the 3rd Plaintiff, including a further 11% equity to be transferred to him at a pro-rated price; 144,520 ESOS shares with all dividends, rights and bonus shares; a July 2020 Board meeting allowance of RM10,000.00; and medical reimbursement of RM8,323.96. THE ISSUES [18] The principal issues for determination were these:

What were the Defendant’s actual roles within the Hartalega Group, and how did those roles affect the duties owed by him and the Plaintiffs’ standing to complain of the impugned conduct?

Did the Defendant owe fiduciary duties, statutory directors’ duties and duties of fidelity to the Plaintiffs, and what was the scope of those duties?

Did the evidence prove that the Defendant used the 3rd Plaintiff’s employees, information and resources for private commercial purposes connected with Snap Asia, Snap Trade, Snap Home, the B2B/B2C platform and related ventures?

Did the Defendant breach his fiduciary duties, sections 213 and 218 of the Companies Act 2016, section 317A of the Capital Markets and Services Act 2007, his employment contract and his implied duty of fidelity?

If liability against the Defendant was established, what reliefs were appropriate. Were the Plaintiffs entitled to the declarations, discovery, account of profits, account of expenses and resources, injunction, return of confidential information, damages to be assessed, interest and costs sought?

Did the Defendant prove his counterclaim? APPLICABLE LEGAL PRINCIPLES a) Burden and standard of proof [19] The burden of proof is governed by sections 101 and 102 of the Evidence Act 1950. The burden was on the Plaintiffs to prove their claim on a balance of probabilities. The burden was separately on the Defendant to prove his counterclaim on the same standards. The civil standard does not change because serious allegations are made. However, the Court must examine serious allegations with corresponding care and must be satisfied by evidence, not suspicion or hindsight: see Letchumanan Chettiar Alagappan @ L Allagappan (As Executor To SL Alameloo Achi Alias Sona Lena Alamelo Acho, Deceased) & Anor v Secure Plantation Sdn Bhd [2017] 4 MLJ 697; [2017] 5 CLJ 418; [2017] 3 MLRA 501; [2017] 3 AMR 625; Yeohata Machineries Sdn Bhd & Anor v Coil Master Sdn Bhd & Ors [2015] 6 MLJ 810; [2016] 2 CLJ 414; [2016] 6 MLRA 326. [20] In the present case, the Court did not proceed on the basis that every business idea, every WhatsApp message, or every preparatory step was necessarily wrongful. The question was more specific. It was whether the evidence showed that the Defendant, while still occupying fiduciary and employment positions within the Hartalega Group, placed himself in a position of conflict, used the Plaintiffs’ resources or employees for private purposes, diverted or attempted to divert corporate opportunities, or acted otherwise than in the best interests of the Plaintiffs. b) Expert evidence, the Deloitte Report and the Truth Lab Report [21] The Plaintiffs relied substantially on the Deloitte fact-finding report and called PW1 and PW2 from Deloitte. The Defendant called DW1 from Truth Lab and relied on the Truth Labs Forensic WhatsApp Chat Authentication Report dated 14 June 2022. I considered both bodies of expert evidence. I did not approach the Deloitte report as conclusive merely because it was prepared by Deloitte. Equally, I did not approach the Truth Lab report as conclusive merely because it was commissioned by the Defendant. [22] Section 45 of the Evidence Act 1950 permits expert opinion evidence where the Court is required to form an opinion on a point of science, skill or other specialised knowledge. The Court approached the expert evidence on the footing that an expert’s primary duty is to assist the Court. That duty overrides the expert’s obligation to the party who retained or paid the expert. The Plaintiffs referred to Order 40A of the Rules of Court 2012 in this context. This principle is consistent with the Federal Court’s decision in Batu Kemas Industri Sdn Bhd v Government of Malaysia & Anor [2015] 7 CLJ 849. Expert evidence must therefore be assessed, tested and weighed with the other evidence. It does not replace the Court’s duty to make findings of fact. [23] The proper approach was to test the Deloitte report against the contemporaneous documents, the WhatsApp messages, the evidence of PW3, PW4 and PW5, the evidence of PW6, the Defendant’s own testimony, and DW1’s evidence. Where the Deloitte report was supported by primary records and by oral evidence which I accepted, I gave it weight. Where it depended on inference, I examined whether the inference was justified. I also considered the Defendant’s criticisms that Deloitte did not interview the Defendant or Mr Muniappan, that it relied in part on background supplied by the Plaintiffs’ solicitors, and that keyword searches could take messages out of context. Those were limitations. They did not, however, render the primary documents, WhatsApp messages, financial records and extracted materials inadmissible or irrelevant. The Defendant had the opportunity to answer those materials in his witness statement and in cross-examination. [24] I also considered DW1’s evidence and the Truth Lab report. DW1’s evidence did not displace the Deloitte material. DW1 accepted in cross-examination that ISO/IEC 27037 was the relevant standard for the extraction of digital evidence, but that the Truth Lab report did not state that it complied with ISO/IEC 27037. DW1 also did not produce a chain of custody form for the Defendant’s mobile device. Further, the Truth Lab report identified eight chat groups which appeared in the Deloitte report but did not appear in the Defendant’s mobile data, namely Medical Products, Importers Database, Koon Seng Snap Asia, Glovepak India, YTY Glovepak, YTY Snap Asia, Snap Home and Hicare Snap Asia. DW1 accepted that one possible explanation for the absence of those chat groups and messages from the Defendant’s mobile phone was that they had been deleted before the device was handed to Truth Lab. The Defendant himself accepted in cross-examination that, according to the Truth Lab report, not a single one of those chat groups or messages existed in his phone. I did not treat that evidence as a standalone finding of deletion or dishonesty. I treated it more carefully. It meant that the Truth Lab report could not be used as a complete answer to the Deloitte report. At its highest, it showed the state of the Defendant’s mobile data when Truth Lab examined the device. It did not prove that the Deloitte messages were false or fabricated. [25] My findings therefore did not rest on the Deloitte report alone. Nor did they rest on any adverse conclusion drawn from the Truth Lab report alone. They rested on the totality of the evidence. I treated Deloitte as a fact-finding and forensic investigation report which assisted the Court in identifying, extracting and organising electronic material. I treated the Truth Lab report as part of the Defendant’s challenge to that material and as a check against it. The question of breach remained a question for the Court. I relied only on facts proved by admissible evidence, agreed facts, contemporaneous documents, messages put to witnesses, oral testimony tested in cross-examination, and admissions made by the Defendant. On that basis, I accepted the Deloitte material only where it was supported by primary records and tested evidence. DW1’s evidence and the Truth Lab report did not undermine that approach. ISSUE 1: THE DEFENDANT’S ROLES AND THE PLAINTIFFS’ STANDING TO COMPLAIN [26] The first factual issue concerns the Defendant’s actual role. The evidence established that he occupied three material positions: Executive Director of the 1st Plaintiff, employee and Corporate Advisor of the 2nd Plaintiff under the employment contract dated 11 October 2011, and director and 19% shareholder of the 3rd Plaintiff. [27] PW6’s evidence was that the Defendant was placed in charge of the management and operations of the 2nd Plaintiff’s subsidiaries in India and China, including the 3rd Plaintiff, and that the 3rd Plaintiff’s employees took instructions from him. PW3 confirmed that she managed the 3rd Plaintiff’s accounts, made bank transfers on the Defendant’s instructions, and sought his approval for payments. PW5 likewise confirmed that he worked closely with the Defendant, reported directly to him, and carried out duties under his supervision. [28] That evidence was consistent with the contemporaneous documents and with the Defendant’s senior position. He was entrusted with developing and managing the 3rd Plaintiff’s business in India. PW3, PW4, and PW5 were employees of the 3rd Plaintiff who acted on his instructions, including in matters outside the ordinary course of the 3rd Plaintiff’s business. [29] The Defendant’s own description of his functions supported the same conclusion. He accepted that he held different roles across the Plaintiffs and that, in practice, employees in India treated his instructions as those of the person managing the 3rd Plaintiff’s affairs. That practical control matters in assessing both breach and causation. [30] The Defendant submitted that each Plaintiff is a separate legal person, that his duties must not be conflated, and that his employment contract contained no restraint of trade clause. He argued that he remained free to trade in gloves or medical supplies after resignation. [31] I accept the legal proposition that companies within a group are separate legal persons and that the Defendant’s legal capacity in each entity must be identified with care. But that does not require the Court to ignore the reality of his senior, overlapping, and integrated roles within the Hartalega Group. The evidence showed that he had access to the Group’s business plans and strategies and that those strategies were implemented through the 2nd and 3rd Plaintiffs. Paragraph 11 of the Statement of Agreed Facts records that, as Executive Director of the 1st Plaintiff, the Defendant had access to board decisions and confidential information, including business plans and strategies of the 1st Plaintiff carried out by or through the 2nd and 3rd Plaintiffs. [32] That principle does not assist the Defendant on these facts. The Plaintiffs did not sue him merely because he was connected to the Hartalega Group. They sued him because he personally held positions in each Plaintiff and because the impugned conduct occurred while he held those positions. [33] The 1st Plaintiff’s involvement must be understood in that limited sense. The 2nd Plaintiff was a wholly owned subsidiary of the 1st Plaintiff. The 2nd Plaintiff held 81% of the 3rd Plaintiff. The 3rd Plaintiff formed part of the Hartalega Group’s distribution structure in India. The Defendant had access to Group business plans and was entrusted with the 3rd Plaintiff’s operations. These facts explain why the impugned conduct affected the Plaintiffs’ pleaded interests, without requiring the Court to disregard separate legal personality. [34] I have not pierced the corporate veil, nor have I ignored the principle in Salomon v Salomon & Co Ltd [1897] AC 22. The point is narrower. The Defendant owed duties to each Plaintiff by reason of the positions he personally held. The relationship between the Plaintiffs explains the commercial context and the pleaded impact of the impugned conduct. It does not create liability. Liability rests on the Defendant’s own duties and his own conduct. Findings on Issue 1 [35] Therefore, I find that the Defendant occupied senior and overlapping positions of trust in the 1st, 2nd and 3rd Plaintiffs. [36] I further find that each Plaintiff had standing to complain, but only within the scope of the duty owed to it and the impact of the proved conduct upon it. As to the 3rd Plaintiff, the standing is direct and primary because its employees, working time, systems, accounts and operational resources were used in the proved instances. As to the 2nd Plaintiff, standing arises from the Defendant’s employment and advisory relationship, his duty of fidelity, and its position as the controlling shareholder of the 3rd Plaintiff through which the relevant operations were conducted. As to the 1st Plaintiff, standing arises from the Defendant’s position as Executive Director of the listed parent, his access to board-level strategy and confidential group business information, and the proved conflict while holding that office. ISSUE 2: THE DUTIES OWED BY THE DEFENDANT [37] The next issue is whether the Defendant owed fiduciary duties, statutory directors’ duties and duties of fidelity to the Plaintiffs, and what was the scope of those duties. a) Fiduciary duties and statutory duties of directors [38] The law on fiduciary duties is well settled. A fiduciary must act loyally and in good faith. He must not place himself in a position where his personal interest conflicts, or may conflict, with his duty; must not make an unauthorised profit from his position; and must not use his position or the company’s property, information, or opportunities for an unauthorised private purpose. [39] The Plaintiffs relied, among other authorities, on The Board of Trustees of the Sabah Foundation & Ors v Datuk Syed Kechik Syed Mohamed & Anor [2008] 5 MLJ 469; [2008] 3 CLJ 221 and TAZ Logistics Sdn Bhd v TAZ Metals Sdn Bhd & Ors [2019] 3 MLJ 510; [2019] 2 CLJ 48; [2019] 4 MLRA 134. Those authorities restate the orthodox position that directors must avoid conflict, act loyally, and refrain from exploiting corporate position or opportunity for personal gain. [40] The Plaintiffs also relied on WRP Asia Pacific Sdn Bhd v Lee Son Hong & Ors [2024] 1 CLJ 766; [2024] 2 MLRH 273, where the High Court reiterated that a director stands in a fiduciary relationship with the company and must not act in a manner that brings his personal interest into conflict with the company’s interests. [41] The duty is not confined to diversion of business. It extends to conduct by which a director uses his position, information, employees, or corporate opportunity for an unauthorised private purpose. That is consistent with section 213 of the Companies Act 2016, which requires a director to exercise his powers for a proper purpose, in good faith, in the best interests of the company, and with reasonable care, skill, and diligence. [42] The Defendant relied on sections 213 and 214 of the Companies Act 2016, including the business judgment rule. [43] Section 214 codifies that rule. It protects a director only where the impugned act is a genuine business judgment made for proper purpose, in good faith, without material personal interest, on an informed basis, and with a reasonable belief that it is in the company’s best interests. It does not protect conduct tainted by conflict, private interest, or unauthorised use of corporate resources: see section 214 of the Companies Act 2016; Tan Joo Chai & Anor v Eco Water Technologies (M) Sdn Bhd [2015] 3 MLJ 380; [2015] 3 CLJ 929; [2015] MLRAU 23; and Tengku Dato’ Ibrahim Petra v Petra Perdana Berhad [2018] 2 MLJ 177; [2018] 2 CLJ 641; [2018] 1 MLRA 263. [44] I accept the principle that courts do not sit as appellate boards over honest commercial decisions made by directors. Business involves risk, and the court does not review such decisions with hindsight. But that principle is not engaged where the impugned conduct is not a business decision of the company at all, but an unauthorised use of company employees and resources in circumstances of personal interest. The business judgment rule protects bona fide business judgments. It does not protect self-dealing, conflict, concealment, or private use of corporate assets. [45] Section 218 of the Companies Act 2016 prohibits improper use by a director or officer of company property, information, position, or corporate opportunity to gain a benefit for himself or another person, or to cause detriment to the company. For that purpose, it is unnecessary to prove that the Defendant became a registered shareholder or director of a competing company, or that the competing business ultimately succeeded. The statutory focus is on the improper use itself. [46] Section 317A of the Capital Markets and Services Act 2007 prohibits a director or officer of a listed corporation, or of its related corporation, from doing or causing anything to be done with intent to cause wrongful loss to the listed corporation or its related corporation, whether or not actual loss is ultimately caused. [47] I approached section 317A with care. Although actual wrongful loss need not be proved, the requisite intention still must be proved. That issue is addressed separately under Issue 4 and cannot be assumed merely because a fiduciary breach is established. b) Employees’ duty of fidelity [48] The Plaintiffs also relied on the implied duty of fidelity in the contract of employment. The duty is a duty of loyalty, trust and confidence. It requires an employee not to act in a manner which conflicts with the employer’s interests in matters falling within the employer’s business sphere. [49] The Plaintiffs relied on KFH Ijarah House (M) Sdn Bhd v Aamir Nordin Ariffin [2010] MLJU 450; [2010] 1 LNS 394; [2010] 6 MLRH 200; [2010] AMEJ 0131, where the High Court held that an employee’s relationship with his employer is fiduciary in character. The High Court cited with approval the Industrial Court’s description in Stamford College Petaling Jaya v Loi Fook Seng [1994] 2 ILR 679 that the employment contract is one of confidence, trust and fidelity, and the English Court of Appeal’s decision in Attorney General v Blake [1998] 1 WLR 805 for the broader fiduciary character of the relationship of trust and confidence, and the employee’s obligation not to make a profit from the relationship or act for his own benefit or the benefit of a third party without informed consent. [50] The Defendant submitted that his employment contract did not contain a restraint of trade clause and that he was therefore free to trade after resignation. The Court accepts the general proposition that, absent an enforceable restraint or other legal restriction, an employee is not ordinarily prohibited from lawful competition after the employment relationship has ended. [51] That, however, does not answer the Plaintiffs’ case. The Plaintiffs’ complaint was not that the Defendant merely planned his future in a lawful way after resignation. The complaint was that, before resignation and while still owing duties to the Plaintiffs, he used the 3rd Plaintiff’s employees, time, information and resources for private commercial purposes and for businesses which competed, or were capable of competing, with the Plaintiffs’ business. The principles regarding post-employment restraint of trade under section 28 of the Contracts Act 1950 do not displace duties of fidelity and exclusive service during employment. The absence of a restraint of trade clause does not excuse a breach of fidelity committed during employment. Analysis of Issue 2 [52] The Defendant’s case was that his duties to the 1st, 2nd and 3rd Plaintiffs were separate and distinct because each company is a separate legal person. He also submitted that the alleged acts concerned the 3rd Plaintiff in India and did not give rise to liability to the 1st and 2nd Plaintiffs. The Defendant relied, among others, on the principle that each company in a group is a separate legal entity and that directors must discharge their duties by reference to the interests of the company to which the duties are owed. [53] I accept the Defendant’s submission that the 1st, 2nd and 3rd Plaintiffs are separate legal persons. The Court of Appeal in Law Kam Loy v Boltex Sdn Bhd & Ors [2005] 3 CLJ 355; [2005] 4 AMR 525; [2005] MLJU 225 reaffirmed the fundamental principle that a company is a separate entity distinct from its shareholders, and that property owned by a company belongs to the company and not to its shareholders. The corporate veil is not to be lifted merely because it is said to be in the interests of justice. The Court of Appeal clarified that the corporate veil will only be pierced under "special circumstances", which require the pleading and establishing of an evidential foundation showing either actual fraud at common law or unconscionable/inequitable conduct amounting to fraud in equity. [54] The Plaintiffs’ claim, however, does not require the Court to disregard the separate personality of the Plaintiffs or to treat their assets as interchangeable. The Defendant’s duties are considered according to the legal capacity in which he acted. He was an Executive Director of the 1st Plaintiff, an employee and Corporate Advisor of the 2nd Plaintiff, and a director of the 3rd Plaintiff. His liability arises from the duties attaching to those respective positions, and from the pleaded conduct found by the Court. It did not arise from any piercing of the corporate veil. [55] The duties were not merely formal. The Defendant's role gave him access to confidential information, employee time, bank accounts, suppliers, customers, business strategies and corporate opportunities. [56] The Defendant relied on his broad advisory role, flexible working arrangements and the absence of a restraint of trade clause. Those points do not assist him. A broad advisory role is not a licence to use company employees and resources for private ventures. Flexibility in working arrangements is not freedom from loyalty. The absence of a post-employment restraint clause does not permit disloyal conduct during employment. [57] Furthermore, I reject the Defendant’s submission that his wide mandate to expand business opportunities meant that every project he discussed with the 3rd Plaintiff’s employees was necessarily a Hartalega project. A broad mandate is still subject to loyalty, authority, proper purpose and transparency. If a director wishes to pursue a business opportunity personally, he must make full and frank disclosure and obtain proper consent. The evidence did not show such disclosure or consent. Findings on Issue 2 [58] Accordingly, in respect of Issue 2, I find that the Defendant owed fiduciary, statutory, contractual and fidelity duties to the Plaintiffs. Those duties required him not to place himself in conflict, not to use company resources for private purposes, not to divert or exploit company opportunities without informed consent, and not to act in a manner inconsistent with the best interests of the Plaintiffs. ISSUE 3: WAS THE DEFENDANT’S IMPUGNED CONDUCT PROVED? a) The Defendant’s resignation and the discovery of the matters complained of [59] The Defendant tendered his resignation through a letter dated 30 June 2020. The 1st Plaintiff accepted the resignation and in a letter of the same date and another letter dated 1 July 2020, the 1st Plaintiff informed him his resignation will take effect on 1 July 2020, and that his managerial role in the 3rd Plaintiff and Mun China would cease with immediate effect. The Defendant's letter dated 4 July 2020 recorded that he took note of the decision and did not wish to dispute it provided his rights as shareholder of the 3rd Plaintiff and Mun China are preserved until their “mutual resolution of the respective shareholding”. [60] PW6's evidence was that, in mid-June 2020, employees of the 3rd Plaintiff brought to his attention matters concerning the Defendant's use of the Plaintiffs' resources for his own benefit. PW6 also referred to accounting concerns and the Defendant's lack of cooperation with the finance team. After the Defendant's resignation, the Plaintiffs took over the day-to-day management of the 3rd Plaintiff and appointed Deloitte in or around August 2020 to conduct a forensic investigation. [61] The sequence is important. The Deloitte report was not the source of every allegation. Some concerns had already been raised by the 3rd Plaintiff's employees before Deloitte was appointed. Deloitte's report formed part of the evidential matrix and identified documents and WhatsApp messages which were then tested in court. The Truth Lab report was also considered, but it did not prove that the WhatsApp messages relied on by the Plaintiffs were false or fabricated. [62] This was important because the Defendant submitted that Deloitte was appointed only after the Plaintiffs had decided to move against him. I accept that Deloitte was appointed later. But the evidence did not begin with Deloitte. PW6's evidence was that the concerns were raised by key employees in mid-June 2020. The messages and documents then provided the contemporaneous trail. Deloitte's role was therefore investigative and corroborative. The Truth Lab report and DW1's evidence were considered as part of the Defendant's challenge to that trail. They did not undermine the Court's reliance on the primary WhatsApp messages and documents where those materials were independently supported, put to witnesses, or admitted. b) Snap Asia [63] The Defendant submitted that he was not a registered shareholder or director of Snap Asia. I accept that the SSM records did not show him as a registered shareholder or director. But that is not determinative. The issue is whether he was practically and commercially connected with Snap Asia and whether he caused the 3rd Plaintiff's employees and resources to be used for that venture. [64] PW3's evidence was that the Defendant messaged in the FSM WhatsApp group in June 2020 that he would be starting a new company under the name Snap Asia, and that she understood Snap Asia would work in conjunction with the 3rd Plaintiff when the Defendant took over the 3rd Plaintiff from Hartalega. PW5's evidence was that the Defendant informed the team of his intention to set up companies such as Danars, Snap Trade and Snap Asia, and that the Defendant instructed him to assist in setting up Danar and Snap Trade in June 2020. PW5 also stated that Mr Muniappan Parasuraman was the director and shareholder of Snap Asia and that the Defendant instructed employees to liaise with him on Snap Asia matters. [65] I do not accept the Defendant's explanation that references to Snap Asia as his company were merely loose expressions. When the messages are read with the evidence of PW3, PW4 and PW5, the involvement of Mr Muniappan, the preparation of financial forecasts, the preparation of purchase orders and the timing before resignation, the proper inference is that Snap Asia was a venture sufficiently connected to the Defendant for the proved use of the 3rd Plaintiff’s employees and resources to constitute breach, whether directly or through others. [66] I have considered the Defendant's submission that Mr Muniappan was not called and that an adverse inference should be drawn against the Plaintiffs. I do not draw such an inference. The Plaintiffs' case did not depend solely on Mr Muniappan's intention or legal ownership of Snap Asia. The pleaded breach was the Defendant's use of the 3rd Plaintiff’s employees and resources for a private venture connected with him. That issue could be, and was, determined on the messages, the evidence of PW3, PW4 and PW5, and the Defendant's own admissions. The non-calling of Mr Muniappan did not leave a material gap which made the Plaintiffs' case unproved. [67] The competing submissions on section 114(g) of the Evidence Act 1950 has to be kept in perspective. The Defendant submitted that an adverse inference should be drawn against the Plaintiffs because they did not call Mr Muniappan to prove that Snap Asia was the Defendant’s company. The Plaintiff submitted conversely that, if the Defendant wished to rely on Mr Muniappan to support his explanation that Snap Asia was independent and that the Defendant was merely helping others on humanitarian or friendly grounds, it was open to the Defendant to call him. [68] I draw no automatic adverse inference against either party merely because Mr Muniappan was not called as a witness. The safer approach is to decide the pleaded issue on the evidence actually before the Court. That evidence included the SSM records, the Defendant’s references to Snap Asia as his company, the involvement of Mr Muniappan in the WhatsApp groups, the purchase orders, financial forecast and the evidence of PW3, PW4 and PW5. On that evidence, I find practical and operational connection sufficient for breach, without needing to find formal ownership or a nominee arrangement. [69] I therefore find that, whether or not the Defendant was the registered shareholder or director of Snap Asia, he was sufficiently connected with Snap Asia and its commercial activities for the relevant conduct to amount to unauthorised conduct pursued otherwise than for the Plaintiffs’ benefit. The absence of formal shareholding does not insulate a fiduciary from liability where the evidence shows that he procured company employees and resources to advance a venture sufficiently connected to him or his associates. c) Faizaan Baig and the catalogues [70] The Defendant also relied on the employment of Faizaan Baig. His submission was that Faizaan was an employee of the 3rd Plaintiff, interviewed by PW5, and engaged to prepare digital marketing catalogues from the 3rd Plaintiff’s multi-medical products business. He submitted that there was no message showing that Faizaan was instructed to prepare catalogues for the Defendant’s personal interest or for Snap Asia India. He invoked section 114(g) because Faizaan was not called by the Plaintiffs. [71] I have considered the Defendant’s submission. The non-calling of Faizaan does not, by itself, defeat the Plaintiff’s pleaded case. The issue is not whether Faizaan performed some legitimate work for the 3rd Plaintiff. He may well have done so. The issue is whether the surrounding evidence showed that the Defendant used the 3rd Plaintiff’s employees and resources for private or proposed private ventures, including Snap Asia India and related catalogues. [72] On the evidence as a whole, I am not prepared to treat Faizaan’s work as a standalone decisive breach. I treat it as part of the surrounding evidential context. The core findings of breach rest on the stronger proved instances: Snap Asia purchase orders, financial forecasts, company registration/name searches, B2B/B2C and Schemax work, and the operational involvement of PW3, PW4 and PW5. d) Purchase orders for Snap Asia [73] The Plaintiffs alleged that the Defendant instructed employees of the 3rd Plaintiff to prepare purchase orders on Snap Asia's letterhead for the import, purchase and procurement of nitrile gloves from companies including Hi-Care Thai Gloves Co Ltd, YTY Industry (Manjung) Sdn Bhd and Koon Seng Sdn Bhd. [74] PW5's evidence was that Smita Khedekar prepared the draft purchase orders on the Defendant's directions and instructions, that the purchase orders concerned those three companies, and that they were shared on the SM WhatsApp group. The Defendant's answer was that the purchase orders were prepared to assist Mr Gregory Pak of Glovepak during the Covid-19 shortage of gloves. The Defendant said he was helping an ex-joint venture partner of Hartalega on humanitarian grounds, using his network to connect Mr Pak with glove manufacturers because the Plaintiffs could not supply gloves at the time. The Defendant further submitted that the work involved was minimal, that one employee of the 3rd Plaintiff merely copied glove type and size ratios into a similar purchase order template, and that this took only a few minutes. [75] I have considered the Defendant’s explanation. I do not accept that it answers the breach for the following reasons: First, the Defendant was still within the Hartalega Group when the work was undertaken. Secondly, the work was not work of the 3rd Plaintiff. It was work connected with Snap Asia, a separate entity associated with Mr Muniappan and linked on the evidence to the Defendant’s private plans. Thirdly, the purchase orders concerned glove business, which was within the commercial sphere of the Hartalega Group. Fourthly, the purchase orders involved third-party suppliers and potential competitors of the Plaintiffs. Fifthly, no informed consent or ratification by the Plaintiffs was shown. [76] The Defendant’s attempt to minimise the work as a “cut and paste” exercise misses the point. A fiduciary breach does not become lawful because the unauthorised work took only a short time. The wrong lies in the unauthorised use of the company’s employees and resources for a private commercial purpose in circumstances of conflict. The Plaintiffs’ reply correctly framed the issue: whether the work took little time or effort was not the central question; the Defendant was not entitled to use key employees of the 3rd Plaintiff for his personal benefit. [77] I also considered DW2 Mr Gregory Pak's evidence and the Defendant's submission that the purchase orders were prepared in the context of the Covid-19 glove shortage. Even accepting that there was a shortage of gloves at the material time, that did not authorise the Defendant to use the 3rd Plaintiff’s staff to prepare Snap Asia purchase orders for transactions with third-party manufacturers. The proper course would have been to disclose the matter and obtain the Plaintiffs' approval. That was not done. [78] I therefore find that the preparation of purchase orders for Snap Asia was a material instance of misuse of the 3rd Plaintiff’s human resources and a breach of the Defendant’s duties of loyalty and fidelity. e) Financial Forecasts for Snap Asia [79] The Plaintiffs alleged that, between 12 June 2020 and 15 June 2020, the Defendant instructed PW3 to prepare financial forecasts for Snap Asia for the years 2020 to 2023. The Plaintiffs' case was that the forecasts were intended to be shown to banks in Malaysia to obtain working capital for Snap Asia. [80] PW3's evidence was direct. She stated that the Defendant asked her to prepare cashflow and three-year income statement forecasts for Snap Asia; that the Defendant shared notes with her for that purpose; and that she was informed through the FSM WhatsApp group that the forecasts were to be submitted to banks in Malaysia to obtain working capital for Snap Asia. [81] The Defendant did not deny that he asked PW3 to prepare a financial forecast or financial statement. His explanation was that it was a training exercise; that he had mentored her in such work; that she agreed to do it in her private time; that the figures were rough estimates; and that the document was not a formal financial forecast meant for bank or loan purposes. [82] I cannot accept the Defendant’s explanation. My reasons for rejecting his explanation are as follows:

First, the contemporaneous messages were inconsistent with the suggestion that this was merely a neutral training exercise. In cross-examination, the Defendant was taken to messages referring to Snap Asia and to the preparation of a forecasted income statement. He was also taken to a message in which he said, “This is my new company”. When it was put to him that the financial forecast was done while he was still with Hartalega, the Defendant answered “Yes”.

Second, I do not treat the single phrase “my new company” in isolation. But when read with the surrounding messages, the timing, the identity of the employee instructed, and the fact that the work was done while the Defendant remained within the Hartalega Group, the inference is compelling. The financial forecast was not a mere academic training exercise. It was work done by a 3rd Plaintiff employee for the Defendant’s private commercial purpose.

Thirdly, the fact that the forecast was in draft form does not matter. Fiduciary duties and duties of fidelity are not limited to completed transactions. The unauthorised use of an employee to prepare financial material for a private venture is sufficient to establish conflict and misuse of resources. [83] To my mind, the contemporaneous messages were especially important. They referred to a project paper to be submitted to banks in Malaysia, Snap Asia as the title of the three-year income statement forecast, paid-up capital, and the Defendant's own description of Snap Asia as his new company. The Defendant accepted in cross-examination that the work was done before his resignation and while he was still with Hartalega. Those matters were inconsistent with the suggestion that PW3 was merely doing a neutral training exercise in her private time. [84] I therefore find that the Defendant used PW3 to prepare financial forecasts for a venture sufficiently connected with him while still owing duties to the Plaintiffs. That was a breach of his fiduciary duties and a breach of his duty of fidelity. f) Snap Trade, Snap Home, furniture and building materials [85] The Plaintiffs also relied on messages concerning Snap Trade, Snap Home, furniture, building materials and the sourcing of products for India. The evidence showed discussions about starting companies for multi-medical products and for furniture and building materials, including kitchen and wardrobe cabinets. [86] In one message, the Defendant referred to starting a project involving furniture and building materials sourcing for India, kitchen and wardrobe cabinets for homes, and hiring a new staff in India under a new company paid by him and not by the 3rd Plaintiff. When cross-examined, the Defendant accepted that the idea had started and that if the project were to start the following month, that would have been May 2020, when he would still have been with Hartalega. [87] Another message referred to the possibility of starting two companies: Snap Trade for multi-medical products and Snap Home for furniture and building materials. [88] PW5's evidence was that he was instructed to liaise with the company secretary to find suitable names for the Defendant's new business. He also stated that the Defendant instructed him to speak to the landlord of the Vizag warehouse to change the tenancy agreement in favour of the Defendant's new company, although PW5 did not proceed because he was not comfortable doing so. [89] The Defendant attempted to characterise these messages as fluid thoughts or future plans. I accept that some details may have been fluid. I also accept that not every expression of a business idea amounts to a breach of fiduciary duty. A senior executive may have thoughts about his future. The law does not punish thought. [90] But the evidence here went beyond thought. The Defendant was involving employees of the 3rd Plaintiff in the discussion, planning and operationalisation of private commercial projects. [91] The same conclusion applies to the proposed registration work and company name searches. The evidence showed that the 3rd Plaintiff’s employees were asked to assist in proposed companies such as Snap Asia India, Snap Trade and Snap Home. It was no answer to say that the companies may not have been fully incorporated or that the precise business plan remained fluid. The proved conduct showed that, while still owing duties to the Plaintiffs, the Defendant was using the 3rd Plaintiff’s employees to assist in business activities not shown to have been authorised by, or undertaken for the benefit of, the 3rd Plaintiff. g) The B2B/B2C Platform and Schemax [92] The evidence concerning the B2B and B2C platform and Schemax also supported the Plaintiffs' case. [93] PW5 said that he was appointed by the Defendant as Program Coordinator for the B2B marketplace project. He stated that the Defendant initiated the project and that the Defendant's instructions appeared in WhatsApp messages and direct texts. PW5 also said that although the order was made through the 3rd Plaintiff, he did not believe it was for the benefit of the 3rd Plaintiff because the Defendant had stated that the B2B marketplace was actually a multi-product software planned for his new companies. [94] The Plaintiffs submitted in reply that PW3, PW4 and PW5 acted on the Defendant’s instructions, including by preparing financial forecasts, checking with a company secretary on proposed companies, adding Mr Muniappan into chat groups to facilitate nitrile glove business between Snap Asia, Glovepak and competitors of the Plaintiffs, and preparing purchase orders for Snap Asia. The Plaintiffs further relied on the evidence of DW3 that work had been done for B2B and B2C projects, and that Schemax had issued an invoice dated 20 May 2020 to the 3rd Plaintiff. [95] PW3's evidence was that the 3rd Plaintiff purchased software from Schemax, including digital marketing and customer support portals, and that a total of INR 10,00,000 was paid for digital marketing and customer support portals, with further amounts paid for warehouse IT software, hosting and training. DW3 accepted that work had been done for B2B and B2C projects and that Schemax issued an invoice dated 20 May 2020 to the 3rd Plaintiff. [96] This admission is significant. It answered the Defendant’s submission that Schemax was engaged solely for the 3rd Plaintiff’s warehouse management or digitalization needs. I accept that that part of Schemax’s work related to warehouse IT, and I do not find that every aspect of the Schemax engagement wrongful. However, DW3’s evidence that B2B and B2C platform work was also included, together with the messages connecting such platform work to the Defendant’s proposed ventures, supported the Plaintiffs’ submission that the 3rd Plaintiff’s resources were being used or made available for work beyond authorized Hartalega purposes. [97] The significance of this evidence is not merely that there were technology or platform discussions. The significance is that the 3rd Plaintiff was being made to bear or facilitate work which the Plaintiffs said was connected with the Defendant’s private projects. [98] The Defendant did not satisfactorily explain why the 3rd Plaintiff should be invoiced or involved if the work was not for its benefit. I find that the B2B/B2C and Schemax evidence formed part of the same pattern of unauthorised use of the 3rd Plaintiff's resources. [99] I did not treat every B2B or B2C discussion as wrongful. The 3rd Plaintiff could, in principle, explore digital platforms and new product lines. The difficulty for the Defendant was the evidence connecting these platform works with his proposed private ventures and the involvement of Schemax. DW3's evidence that work was done and invoices were issued had to be assessed against the pleaded allegation that the 3rd Plaintiff’s resources were being used for purposes not shown to be for the 3rd Plaintiff. [100] I accept the Plaintiffs’ submission that the Defendant placed personal projects and business plans under the broad label of business development or future diversification. The label did not change the substance. The Court must examine what the work was, who benefited from it, who authorised it, and whose employees and resources were used. [101] On that analysis, the evidence relating to the B2B and B2C platforms formed part of the broader pattern of conduct. It shows that the Defendant was using his position and the 3rd Plaintiff’s resources to advance ventures not shown to be authorised Hartalega Group projects. [102] Therefore, on the totality of the evidence, I accepted the Plaintiffs' submission that the B2B/B2C platform work formed part of the same unauthorised pattern of work by the Defendant. h) Banking Instructions and Accounting Discrepancies [103] The Plaintiffs also relied on the Defendant’s authority over the 3rd Plaintiff’s bank accounts and the accounting discrepancies which arose after the Defendant’s resignation. [104] The pleaded allegation, as reflected in the Defendant’s own summary of the Plaintiffs’ case, was that between 3 April 2020 and 8 April 2020, the Defendant instructed or commanded a key employee of the 3rd Plaintiff, PW3, to transfer all but the minimum amount from the State Bank of India account to the Kotak Mahindra Bank account, with specific instructions that the State Bank of India account be left dormant and eventually closed without prior board authorisation. [105] The significance of this allegation was that the Defendant had full authority, without monetary limit, to effect manual or net banking transactions for the Kotak Mahindra Bank account, whereas he was not an authorised signatory for the State Bank of India account. [106] PW3's evidence was that she managed the 3rd Plaintiff's accounts, including bank transfers under the Defendant's instructions. She stated that for any payment she would write to the Defendant, state the purpose and seek his permission, after which the Defendant would provide the payment PIN by text or email. [107] PW3 also stated that, in April 2020, the Defendant instructed her to transfer all but the minimum amount from the State Bank of India account to the Kotak Mahindra Bank account and instructed that the State Bank of India account be left dormant and eventually closed. She believed this was because the Defendant had full authority, without monetary limits, to effect manual or net banking transactions for the Kotak Mahindra Bank account. [108] The evidence showed that the balance sheet of the 3rd Plaintiff did not tally, and that the Defendant did not satisfactorily cooperate with the Plaintiffs’ finance team to resolve the matter. In the context of his full authority over banking transactions and his day-to-day control over the 3rd Plaintiff’s operations, that failure was not a neutral omission. It was inconsistent with his obligation to act in the best interests of the Plaintiffs and to account properly for the affairs under his charge. [109] I treated this evidence carefully. The mere existence of accounting discrepancies does not, without more, prove dishonesty or breach of fiduciary duty. But the Defendant’s role and authority over banking transactions were highly relevant to the assessment of his obligations. A director and senior employee with substantial banking authority had a duty to cooperate fully and transparently when accounting discrepancies arose. [110] Moreover, I do not find liability merely because accounts were moved or because a balance sheet did not tally. Those facts require caution. However, they are relevant because they show the extent of the Defendant's control and the corresponding duty to account, cooperate and act transparently. In the context of the other proven conduct, the banking and accounting evidence reinforced the finding that the Defendant exercised practical control over the 3rd Plaintiff and failed to discharge that control with the required loyalty and transparency. [111] The banking evidence was not the strongest standalone limb of the Plaintiffs' case. I therefore did not use it as an independent finding of dishonesty. Its relevance was contextual. It showed the extent of the Defendant's control over the 3rd Plaintiff’s affairs and the degree of trust placed in him. It also showed why transparency and cooperation were required of him when issues arose. His failure to give a satisfactory explanation was consistent with, and supportive of, the broader findings on breach. Findings on Issue 3 [112] Having considered the contemporaneous documents, the WhatsApp messages, the evidence of PW3, PW4, PW5, and PW6, the Deloitte evidence, the Truth Lab report, DW1’s evidence, and the Defendant’s explanations, I find on a balance of probabilities that the Defendant’s impugned conduct was proved. [113] In particular, I find that the Defendant involved employees of the 3rd Plaintiff in work connected with Snap Asia, Snap Trade, Snap Home, and related proposed business activities; caused or permitted purchase orders to be prepared for Snap Asia; instructed PW3 to prepare financial forecasts for Snap Asia; used or caused the use of the 3rd Plaintiff’s resources in connection with the B2B/B2C and Schemax work; and failed to act with the transparency required of a person occupying such positions of trust when banking and accounting issues arose. [114] I make that finding with two qualifications. First, the Plaintiffs did not prove, and did not need to prove, that every proposed business matured into a completed transaction. Secondly, I do not find that every message or discussion was wrongful. The finding of breach rests on the specific proved instances of misuse of employees and resources for Snap Asia, purchase orders, financial forecasts, company-registration work, B2B/B2C work, and related private plans, viewed cumulatively. ISSUE 4: LIABILITY [115] Having made the finding in Issue 3 that the Plaintiffs had discharged their burden of proof of the Defendant’s impugned conduct on a balance of probabilities, the question in Issue 4 is whether the Defendant breached his fiduciary duties, sections 213 and 218 of the Companies Act 2016, section 317A of the Capital Markets and Services Act 2007, his employment contract and his implied duty of fidelity. [116] I find that the proven facts establish breach of fiduciary duty. The Defendant placed himself in a position of conflict. He used or caused the use of the 3rd Plaintiff's employees and resources in connection with private commercial ventures. He did so while still owing fiduciary and employment duties. He did not obtain consent or ratification from the Plaintiffs. [117] The Defendant’s attempt to compartmentalise his duties does not defeat liability, but the liability must still be identified plaintiff by plaintiff. The 3rd Plaintiff proved direct misuse of its employees, systems, accounts, and operational resources. The 2nd Plaintiff proved breach of the Defendant’s contractual and fidelity duties owed as its employee and Corporate Advisor, and proved impact through its controlling position in the 3rd Plaintiff’s relevant operations. The 1st Plaintiff proved breach in the narrower sense that, while serving as its Executive Director, the Defendant acted in conflict and without disclosure in relation to business plans and strategic interests to which he had access through that office. Separate legal personality is therefore respected. Liability is not imposed by reason of group structure alone, but by reference to the duty owed to each Plaintiff and the proved conduct falling within that duty. [118] This conclusion does not collapse the separate legal personality of the Plaintiffs. It recognises that one individual may owe concurrent duties in different capacities. The Defendant cannot rely on the separate identity of each company to deny liability for his own acts where those acts used the resources of one company, affected the interests of another, and were done while he held positions of trust in all of them. [119] I also find breach of section 213 of the Companies Act 2016. The Defendant's conduct was not for a proper purpose. It was not in good faith in the best interests of the relevant companies. He failed to exercise the care, skill and diligence expected of a director and officer entrusted with the 3rd Plaintiff's operations and banking affairs. [120] The Defendant's reliance on section 214 of the Companies Act 2016 fails for the same reason. The conduct complained of was not a board decision or commercial judgment made openly for the 3rd Plaintiff or the Hartalega Group. It was a series of private acts carried out through employees and resources under the Defendant's control. [121] Section 214 does not assist the Defendant. The business judgment rule does not protect conduct undertaken with material personal interest, conflict and unauthorised use of corporate resources. The conduct complained of was not an honest commercial judgment made for the company on an informed basis. It was the use of corporate resources for unauthorised private purposes. [122] I further find breach of section 218 of the Companies Act 2016. The Defendant used or procured the use of the 3rd Plaintiff's employees, information, position and opportunity to advance ventures connected with him or his associates. The Plaintiffs did not consent to or ratify that use. [123] I also find that the Defendant was in breach of section 317A of the Capital Markets and Services Act 2007. I address that provision separately because it concerns the 1st Plaintiff as a listed corporation and its related corporations, and because its elements are distinct from the fiduciary, statutory, contractual and fidelity duties already considered. [124] Section 317A requires proof that the director or officer did or caused something to be done with intent to cause wrongful loss to the listed corporation or its related corporation. I approached that question separately and with care. I do not treat intention under section 317A as arising automatically from proof of fiduciary breach or breach of section 213 or section 218. Those causes of action are distinct and stand on their own elements. [125] On the facts found, I am satisfied that the Plaintiffs proved the elements of section 317A. The Defendant deliberately caused the 3rd Plaintiff’s employees, time, systems and resources to be used for business activities not shown to have been authorised by, or undertaken for the benefit of, the Plaintiffs, while he remained Executive Director of the 1st Plaintiff and while the 1st Plaintiff, as the listed parent, and the 2nd and 3rd Plaintiffs, as related corporations, stood to suffer detriment from that conduct. In that limited and specific sense, I find that the requisite intention to cause wrongful loss is made out on the evidence. [126] That section 317A finding is, however, separate from the other findings of liability I have made. The breaches of fiduciary duty, section 37 213, section 218, the employment contract and the implied duty of fidelity do not depend upon section 317A. They arise from their own legal elements and from the same proved conduct viewed through the distinct duties engaged in this case. [127] Accordingly, the proved facts support both the section 317A finding and the separate findings on fiduciary duty, section 213, section 218, the employment contract and the implied duty of fidelity. The latter findings would remain even apart from section 317A because they rest on separate duties, separate legal requirements and the Court’s findings on the Defendant’s misuse of the Plaintiffs’ employees, information, opportunities and resources. [128] I also find breach of the Defendant's employment contract with the 2nd Plaintiff. Clause 6(1), read with the contract as a whole, required loyalty and prohibited unauthorised engagement in other business during employment. His broad role and flexible arrangements did not authorise him to use the Hartalega Group employees and resources for private ventures. [129] For the same reasons, I find breach of the implied duty of fidelity. The Defendant was required to serve the 2nd Plaintiff loyally and in good faith. He did not do so. [130] The absence of completed profit or quantified loss does not defeat liability. Loss is relevant to damages. Profit is relevant to an account of profits. The use of resources is relevant to an account of expenses and resources. But fiduciary breach and breach of fidelity can be complete once conflict, misuse of position, misuse of resources or unauthorised pursuit of opportunity is proved. [131] The Court is empowered under section 581 of the Companies Act 2016 to grant relief in proceedings for negligence, default, breach of duty or breach of trust against any person to whom the section applies, including an officer of the corporation. Section 581 requires the Court to be satisfied that the officer acted honestly and reasonably and that, having regard to all the circumstances, he ought fairly to be excused. [132] On the facts found, the Defendant did not act transparently, did not disclose the conflict, did not obtain consent, and used employees and resources for his private purposes. I am not satisfied that these facts show that the Defendant’s conduct was “honest and reasonable” in the circumstances. Accordingly, I decline to relieve him from liability under section 581 of the Companies Act 2016. Findings on Issue 4 [133] For the above reasons, I find that the Plaintiffs have proved, on a balance of probabilities, the Defendant’s breach of fiduciary duty, breach of section 213 and section 218 of the Companies Act 2016, breach of section 317A of the Capital Markets and Services Act 2007, breach of the employment contract, and breach of the duty of fidelity. Each of those findings rests on its own legal elements, although they arise from the same proved course of conduct. ISSUE 5: RELIEF [134] Having found liability, I am satisfied that the Plaintiffs are entitled to declaratory relief. The declarations identify the legal character of the Defendant's breaches and are necessary because of the nature of the confidential information, business opportunities and resources involved. The declarations are confined to the breaches found in these grounds. [135] The Plaintiffs are also entitled to discovery of the particulars of parties to whom the Defendant divulged, disclosed or circulated confidential documents and information arising from the impugned conduct. That order is necessary because the Plaintiffs are entitled to know the extent of disclosure and to protect their information. [136] The Plaintiffs are entitled to an account of profits and an account of expenses and resources used, limited to the breaches found in these grounds. The full extent of any benefit obtained by the Defendant and the extent of the Plaintiffs' resources used cannot be determined without further accounting. The Plaintiffs are also entitled to injunctive relief and return of confidential and financial information, confined to information belonging to the Plaintiffs and to competing businesses arising from or connected with the impugned conduct. [137] For avoidance of doubt, these remedies are not to operate as double recovery. The account of profits, the account of expenses and resources used, and the assessment of damages must be administered so that the Plaintiffs recover only what the law permits for the breaches found, and not the same loss or benefit twice. [138] Damages are to be assessed. Interest at 5% per annum is awarded on all damages from the date of judgment until full settlement. Costs of RM90,000.00 are awarded against the Defendant. ISSUE 6: THE DEFENDANT’S COUNTERCLAIM [139] The Defendant counterclaimed for the following reliefs:

against the 2nd Plaintiff, the sum of RM10,000.00 said to be the Board meeting allowance for July 2020;

against the 2nd Plaintiff, medical reimbursement amounting to RM8,323.96;

against the 1st Plaintiff, reinstatement of 144,520 ESOS shares, including any dividends, rights issue and/or bonus shares declared thereunder;

against the 3rd Plaintiff, an order that it transfer or cause to be transferred to the Defendant an 11% equity interest in the 3rd Plaintiff at the pro-rated price paid by the Defendant for his 19% equity interest; and

other consequential reliefs founded on the Defendant’s alleged entitlement to 30% equity in the 3rd Plaintiff. [140] The Defendant bore the burden of proving his counterclaim. It was not enough to show expectations, discussions or an opportunity to acquire shares. He had to prove a legal and evidential basis for the relief claimed.

The alleged 30% equity and further 11% equity in the 3rd Plaintiff [141] The Defendant's first substantial counterclaim was premised on his assertion that he was entitled to 30% equity in the 3rd Plaintiff. I find that he failed to prove that assertion. The evidence established that he held 19% equity. It did not establish that he held 30% equity or had an enforceable right to the remaining 11%. [142] An offer or opportunity to acquire shares is not the same as ownership of those shares. The Defendant did not prove a concluded agreement for the remaining 11%. He did not prove payment, tender of consideration, satisfaction of conditions, or any enforceable contractual or equitable right to compel transfer. [143] The Defendant's own evidence weakened his claim. He accepted under cross-examination that he never purchased the additional 11% despite exercising ESOS entitlements from 2012 to 2014. He also accepted that the 81% shareholding was owned by the 2nd Plaintiff. [144] These admissions were material. If the Defendant’s own case was that the 2nd Plaintiff owned the shares, the claim framed against the 3rd Plaintiff for transfer or procurement of transfer of the 11% equity was not properly founded. A company cannot issue or transfer shares that are already fully allocated and registered in the name of an existing corporate shareholder. A company also does not own its own issued share capital. The claim for transfer framed against the 3rd Plaintiff was therefore structurally defective. The Defendant’s submission that the Court had a discretion to make an order against the “correct party” in the interests of justice cannot cure a counterclaim that was not properly established on its pleadings and proof. [145] The Court does not decide cases on a broad sense of perceived commercial fairness. It decides them on pleaded rights and evidence. The Defendant failed to prove that he held 30% equity in the 3rd Plaintiff. He also failed to prove an enforceable entitlement to require the transfer of the additional 11% equity. [146] I also considered the letter dated 16 May 2018 relied upon by the Defendant. I accept the Plaintiffs' submission that the letter did not, without more, prove an enforceable contract for the remaining 11%. It was relied upon in the context of a loan application. It did not identify the essential terms of a binding sale of the further 11%, the time for completion, the seller's obligation, or any tender of consideration. It therefore did not support the mandatory relief sought. [147] I therefore dismiss the counterclaim for a declaration or order that the Defendant held or was entitled to 30% equity, or that a further 11% equity in the 3rd Plaintiff be registered in his name at a pro-rated original price.

The ESOS Claim [148] The Defendant claimed reinstatement of 144,520 ESOS shares and all dividends, rights and bonus shares. [149] The Defendant’s case was that his ESOS entitlement was recognised in Annexure A to his employment contract with the 2nd Plaintiff and in correspondence. He relied on the ESOS By-Laws, including By-Law 6.1, which provided that an offer made by the Option Committee to an eligible person would be valid for 30 calendar days from the date of offer or such longer period as the Option Committee might determine. He also relied on an email dated 27 May 2020 from Tiffany Jong offering him 60,200 units, and submitted that he had made payment to exercise that entitlement. [150] The Defendant further submitted that, after the process had been executed, he was told upon resignation that his cheque would be returned and that he would not be allocated any ESOS entitlement. He contended that the Plaintiffs had failed to follow proper procedures and that he had not been given a chance to reply to any allegation before being deprived of his ESOS entitlement. [151] I have considered those ESOS submissions in full. The Defendant placed particular emphasis on Annexure A to his employment contract, the letter dated 16 May 2018, the email dated 27 May 2020 from Tiffany Jong referring to 60,200 units, the alleged approval by the Options Committee and Board, his payment or cheque for the offer amount, the 30-day period under By-Law 6.1, the return of his cheque on 27 July 2020, and the fact that Deloitte was appointed only on 17 August 2020. He also submitted that he was not given an opportunity to answer the allegations before the ESOS entitlement was withdrawn. [152] Those matters do not establish the counterclaim for the following reasons:

First, the pleaded counterclaim sought reinstatement of 144,520 ESOS shares against the 1st Plaintiff, whereas the documentary foundation relied upon by the Defendant was tied to his employment terms and the ESOS machinery administered through the relevant committee.

Secondly, the Defendant’s own computation and alternative reliance on 60,200 units did not cure the pleaded claim for 144,520 shares.

Thirdly, an offer, correspondence and payment step did not prove an indefeasible allotment once the governing By-Laws preserved the role and discretion of the Options Committee.

Fourthly, the fact that Deloitte was appointed after the return of the cheque does not answer the Plaintiffs’ case. As I have found earlier, the concerns about the Defendant’s conduct did not begin with Deloitte. They were raised in June 2020 by employees of the 3rd Plaintiff and were then investigated further.

Fifthly, the Defendant did not establish, on the pleadings and evidence, a contractual or statutory right to a hearing before the Options Committee could decline or withdraw the entitlement in the circumstances found by the Court. The absence of a prior hearing may be relevant if a legally enforceable procedural right is shown. It was not proved here. [153] PW6's evidence was that the ESOS scheme was to be administered by the Options Committee, which had discretion to exercise its powers in the best interests of the company. [154] The Plaintiffs' case was that the Options Committee rejected the Defendant's ESOS entitlement for 2019-2020 after discovery of his breaches. The Plaintiffs submitted that the Options Committee had absolute power under clause 9.2(f) of the ESOS By-Laws, and that the Defendant had agreed in cross-examination that he did not formally dispute or appeal the Options Committee’s decision. The fact that an offer or payment process had commenced did not override the By-Laws or remove the Committee's discretion. [155] I accept the Plaintiffs’ submissions. The Defendant did not prove an unconditional vested right to the full ESOS entitlement claimed. The evidence showed that the ESOS entitlement remained subject to the governing ESOS By-Laws, the decision-making structure under those By-Laws, and the discretion of the relevant committee. [156] The fact that an offer or allotment process had commenced did not by itself prove that the Defendant had an indefeasible right to the full claimed entitlement. Nor did the tendering of payment conclusively establish that the shares had to be allotted irrespective of subsequent discovery of misconduct or committee decision under the ESOS By-Laws. [157] I reject the Defendant’s argument that, at the point of withdrawal, there was no evidence of wrongdoing because Deloitte had not yet been appointed. The Plaintiffs’ case, which I accept, was that the Defendant’s wrongdoing had already commenced in 2019 to 2020 and had been brought to PW6’s attention by key employees before the Deloitte appointment. The Deloitte report fortified the evidence; it was not the source of every underlying fact. [158] The Defendant did not prove that the refusal was legally wrongful. He also did not formally dispute or appeal the Options Committee's decision. [159] In addition, the Defendant's counterclaim as pleaded did not sufficiently particularise the legal basis for reinstatement of the 144,520 ESOS shares. The evidence also showed that the ESOS units had been wrongly computed and that the Defendant himself accepted in cross-examination that there were difficulties with the party against whom the claim was framed. Those matters were not minor technical points. They went to the existence and enforceability of the alleged right. [160] I therefore find that the Defendant failed to prove that, as against the 1st Plaintiff, he was entitled to 144,520 ESOS shares or to any dividends, rights or bonus accruing thereunder. I therefore dismiss the ESOS counterclaim. [161] For completeness, the alternative claim for 60,200 units also fails for the same reasons. The Defendant did not prove this alternative claim. The offer and payment relied upon did not override the ESOS By-Laws or the Options Committee’s discretion, particularly in the context of the misconduct found by this Court.

July 2020 Board Allowance [162] The Defendant claimed RM10,000.00 as Board meeting allowance for July 2020. The Defendant’s case was that his resignation letter gave one month’s notice and that his last effective day should have been 31 July 2020. He submitted that the Plaintiffs acted arbitrarily in treating 1 July 2020 as the effective date. He also contended that the 3rd Plaintiff accepted his resignation only on 4 August 2020, and that he therefore remained entitled to benefits and the Board meeting allowance for July 2020. [163] The Plaintiffs’ answer was that the Defendant’s resignation was accepted with immediate effect as of 1 July 2020. The Plaintiffs relied on Hartalega’s letter of 1 July 2020, the Defendant’s reply dated 4 July 2020, Hartalega’s letter dated 14 August 2020, and a further letter dated 24 August 2020 confirming that the Defendant had ceased employment with effect from 1 July 2020. The Plaintiffs also submitted that during trial, the Defendant ultimately admitted and accepted that his resignation was effective on 1 July 2020. [164] I find that the Defendant’s reliance on the alleged acceptance of resignation by the 3rd Plaintiff on 4 August 2020 does not assist him. This is because the employment and benefits claims were against the 2nd Plaintiff. The evidence showed that the 2nd Plaintiff accepted his resignation with immediate effect from 1 July 2020 and that the Defendant did not materially challenge that position at the time. There was no contemporaneous evidence that he disputed that position at the material time. The later corporate formalities of the 3rd Plaintiff did not revive an employment entitlement against the 2nd Plaintiff for July 2020. [165] The Defendant’s reliance on a one-month notice period does not establish entitlement to a July Board allowance. Once the resignation was accepted with immediate effect and the Defendant accepted that position, he no longer had a legal basis to claim Board allowance for July 2020. [166] I therefore dismiss the Defendant’s counterclaim for RM10,000.00 Board meeting allowance.

The Medical Reimbursement Claim [167] The Defendant also claimed medical reimbursement of RM8,323.96 for hospitalisation in July 2020. The Defendant’s argument was similar to his argument on the July 2020 Board allowance. He submitted that his benefits as an employee should have continued until 31 July 2020, and that because he was hospitalised for dengue in July 2020, the Plaintiffs should reimburse his medical costs. [168] The Plaintiffs submitted that because the effective last day of employment was 1 July 2020, the Defendant was not entitled to medical reimbursement for hospitalisation bills incurred in July 2020. They also submitted that no material particulars of this claim were pleaded in the counterclaim. [169] I accept the Plaintiffs’ submission. The Defendant had ceased employment with effect from 1 July 2020. He therefore failed to prove that he remained entitled to medical benefits for hospitalisation expenses incurred thereafter. The claim was also not supported by sufficient pleaded particulars to establish a legal entitlement against the 2nd Plaintiff. [170] I therefore dismiss the Defendant’s counterclaim for medical reimbursement of RM8,323.96.

Minority oppression and share valuation [171] The Defendant’s counterclaim was not pleaded as a statutory minority oppression claim or as a share valuation claim. It was pleaded as a claim to specific entitlements: the alleged further 11% equity, ESOS shares, Board allowance and medical reimbursement. [172] However, in his submissions, the Defendant sought to characterise aspects of the Plaintiffs’ conduct as unfair, arbitrary, and connected with his position as a minority shareholder. To the extent that those submissions were intended to invoke minority oppression, share valuation or unfair treatment, they were not supported by any proper pleading. Nor were they made out on the evidence. [173] The Defendant’s position as a 19% shareholder did not entitle him to compel the transfer of further shares, require the Plaintiffs to continue business arrangements with him, or obtain compensation on a valuation basis in the absence of a proved contractual, statutory or equitable right Findings on Issue 6 [174] For the above reasons, the finding on Issue 6 is that the Defendant’s counterclaim fails in its entirety. CONCLUSION [175] For the reasons set out above, I found that the Plaintiffs proved their claim on a balance of probabilities. The Defendant occupied positions of trust and responsibility within the Hartalega Group. While owing those duties, he placed himself in conflict, used or procured the use of the 3rd Plaintiff’s employees and resources for private commercial purposes, and acted without informed consent or ratification. [176] The Defendant’s explanations did not withstand scrutiny when tested against the contemporaneous documents, the WhatsApp messages, the evidence of PW3, PW4, PW5, and PW6, the expert evidence, and the Defendant’s own admissions. DECISION, DECLARATIONS AND ORDERS [177] I therefore allowed the Plaintiffs’ claim, entered judgment for the Plaintiffs, granted the declarations and consequential orders, ordered damages to be assessed, awarded interest at 5% per annum on all damages awarded from the date of judgment until full settlement, and awarded costs of RM90,000.00 against the Defendant. [178] The Defendant’s counterclaim was dismissed in its entirety. The order for costs of RM90,000.00 was awarded to the Plaintiffs against the Defendant as costs of the action, including the dismissal of the counterclaim. [179] Having allowed the Plaintiffs’ claim and dismissed the Defendant’s counterclaim, the Court granted the declaratory and consequential reliefs sought by the Plaintiffs. [180] The declarations granted were:

a declaration that the Defendant had breached his fiduciary duties to the 1st, 2nd, and 3rd Plaintiffs;

a declaration that the Defendant had breached his contract of employment with the 2nd Plaintiff;

a declaration that the Defendant had breached his duty of fidelity to the 2nd Plaintiff; and

a declaration that the Defendant had acted without the consent or ratification of a general meeting of the 1st Plaintiff, 2nd Plaintiff and the 3rd Plaintiff to use the properties of the Plaintiffs and to engage in businesses, which are in competition with the Plaintiffs’ businesses, to gain directly and/or indirectly, a benefit for the Defendant or any other person, and/or to cause detriment to any and all of the Plaintiffs. [181] The Court also granted the following consequential orders:

full discovery of the particulars of all parties where the Defendant had divulged and/or disclosed and/or circulated confidential documents and information;

the Defendant accounts for any and/or all profits that he had derived as a results of the breach of his fiduciary duties;

the Defendant accounts for all expenses and resources of the 3rd Plaintiff that the Defendant had used and/or utilised in the setting up of his competing businesses against the Plaintiffs;

the Defendant is prohibited from using any and all confidential information belonging to the Plaintiffs to carry out and/or develop any of his competing businesses against the Plaintiffs;

the Defendant is ordered to return all confidential and financial information belonging to the 1st, 2nd and/or the 3rd Plaintiffs within 30 days from the date of this Order.

damages to be assessed by the Court;

interest at 5% per annum on all damages awarded from the date of judgment until full settlement; and

costs of RM90,000.00 against the Defendant. Dated: 31 May 2026 -SGD- (FAIZAH JAMALUDIN) JUDGE HIGH COURT OF MALAYA AT SHAH ALAM COUNSEL: For the Plaintiffs: Vasanthi Sathasivam Sugumaran Kumareson Subathra K. Sathianathan [Messrs. K. Sugu & Associates] For the Defendant: Harjinder Kauri Toh Xin Yi Anthony Manavalan [Messrs. Shahrizat Rashid & Lee]