Er Ka Wei v Ladang S.W. Sungai Rentung Sdn Bhd (BA-24NCC-115-10/2025)

The Plaintiff, Er Ka Wei, being a director, shareholder and contributory of the First Defendant, Ladang S.W. Sungai Rentung Sdn Bhd, has filed an Originating Summons. The matter before this Court concerns the relief sought, namely, an order compelling the Defendants to grant the Plaintiff access to inspect and to make copies of the Company’s accounts, books, records, and papers hereinafter collectively referred to as “the Company Records”.

The First Defendant’s primary business was the cultivation of oil palm on land situated in Kelantan. Following the sale of this land in 2023 for approximately RM 92.4 million, the company ceased active operations. The Plaintiff alleges that the Second, Third, and Fourth Defendants have engaged in transactions of a questionable nature. These include:

The transfer of RM20 million to Ladang Sawit Jerantut Sdn Bhd, a company allegedly connected to the Second Defendant and his family;

Unexplained payments and journal entries involving Directors’ accounts, including payments purportedly made to the Plaintiff which he asserts he never received; and

Payments to third parties without clear justification.

The Plaintiff asserts that he has been denied full access to the company’s records despite multiple requests and two limited inspection sessions. The Defendants contend that they have provided access to available documents and that the Plaintiff’s requests for older records, dating back to 2004, are unreasonable, as the company is only legally required to retain records for seven years.

As a director, the Plaintiff possesses both statutory and common law rights to inspect the Company Records, such rights being integral to the discharge of his fiduciary duties. The Defendants have failed to demonstrate compliance with these obligations, as the requested documents have not been produced in full, notwithstanding the limited inspection sessions previously afforded. It is further noted that the First Defendant company itself does not resist the application.

In addition, they argue that the Defendants have failed to provide clear proof of any ulterior motive or bad faith on the part of the Plaintiff, which is the only basis upon which a court could deny such an inspection. Therefore, the Plaintiff requires the assistance of an approved company auditor to effectively conduct the inspection.

The Defendants contend that the Originating Summons constitutes an abuse of the process of this Court, being frivolous, vexatious, and calculated to oppress them. It is further submitted that the Plaintiff has engaged in approbation and reprobation, in that he now challenges transactions reflected in financial statements which he himself had previously signed and approved in his capacity as director. the Defendants have submitted that, under the trite law, Section 245 of the Companies Act 2016 requires companies to maintain proper accounting records for a period of seven (7) years. It is contended that the statutory obligation does not extend beyond this period, and accordingly, the Defendants cannot be compelled to produce records which no longer exist or which they are not legally required to retain.

The Defendants maintain that they have not denied the Plaintiff access to the Company Records and assert that they have cooperated to the extent possible, but cannot produce documents which no longer exist, particularly those older than seven years. The Defendants further contend that the Plaintiff’s reliance on certain exhibits, specifically Exhibit EKW-17, is improper, as the said exhibit contains untranslated Mandarin characters, thereby contravening the Court’s rules regarding the use of language in proceedings.

In addition, they argue that the Plaintiff has been sleeping on his rights, having delayed until now to challenge historical transactions which were long concluded.

The Court approaches applications of this nature by asking: a) Whether the applicant seeking inspection stands in a position as director, contributory, or creditor, which by statute or common law entitles him to inspect the company’s records; b) Whether the applicant has made out a bona fide request in the interests of the company or in discharge of duties as director or contributory; c) If so, whether the resisting party has shown clear proof that the inspection will be used for an ulterior or improper purpose, such as to harm the company, so that inspection should be denied. The burden to show improper motive lies upon the resisting party, and mere assertions or speculation are insufficient; d) If inspection is ordered, what safeguards and conditions are appropriate, including: i. inspection with the assistance of an auditor, ii. undertakings as to confidentiality, iii. reasonable copying charges, iv. time for compliance, and v. provision for an affidavit of non-existence where records genuinely no longer exist.

Section 48 of the Companies Act 2016 governs the inspection of documents and records maintained by a company. The provision confers upon members, directors, and, in certain circumstances, the public, the right to inspect specific records, including the register of members, minute books, and the company’s constitution. Such inspection is generally permitted without charge or upon payment of a nominal fee. The statutory right of inspection under Section 48 is designed to ensure transparency and accountability in corporate governance, while balancing the company’s administrative obligations with the legitimate interests of stakeholders. Statutory Framework of Section 48 of the CA 2016 S. 48. (1) Any document and record that is to be made available for inspection under this Act, shall be made available for inspection by any person who is entitled to inspect such document and record at the registered office of a company or any other place allowed by this Act.

A company shall provide proper facilities to enable the documents and records to be inspected.

The person who is entitled under this Act to inspect the documents and records referred to in subsection (1) shall be allowed to make copies or take extracts from the documents and records.

In addition, Section 245 of the Companies Act 2016 imposes a duty upon companies, directors, and managers to maintain proper accounting and financial records at the registered office, or at such other place as may be determined by the directors. These records must be sufficient to explain the company’s transactions and to enable the accounts to be properly audited.

The provision further grants directors an almost absolute right of inspection over such records, extending not only to the company’s own accounts but also to those of its subsidiaries. This statutory entitlement underscores the fiduciary responsibility of directors to oversee the financial affairs of the company and ensures transparency and accountability in corporate governance.

(1) A company, the directors and managers of a company shall :-

cause to be kept the accounting and other records to sufficiently explain the transactions and financial position of the company and enable true and fair profit and loss accounts and balance sheets and any documents required to be attached thereto to be prepared; and

cause the accounting and other records to be kept in a manner as to enable the accounting and other records to be conveniently and properly audited.

A company, the directors and managers of a company shall cause appropriate entries to be made in the accounting and other records within sixty days of the completion of the transactions to which the entries relate.

The company shall retain the records referred to in subsection (1) for seven years after the completion of the transactions or operations to which the entries relate……

In my view, the Plaintiff is a director of the company and so prima facie possesses the statutory and common‑law right to inspect the Company Records and the Court accepts the Plaintiff’s stated purpose: i. to investigate the manner in which proceeds from the sale to Felcra Berhad were received, retained and utilised by the 1st Defendant, ii. to examine purported repayments to directors and other large and unexplained payments, and iii. to ensure the company’s assets and records are properly accounted for.

In my opinion, the signing or approving audited accounts does not, on its own, prevent a director from exercising the statutory right to inspect underlying records. Audited summary accounts do not identify every transaction nor replace the right to inspect supporting documentation when legitimate questions about the company’s affairs arise. Dato’ Tan Kim Hor & Ors v Tan Chong Consolidated Sdn Bhd [2009] 2 MLJ 527 confirms that directors have an unrestricted right to inspect company documents, rooted in both common law and statute. The Federal Court held that a director’s right to inspect company records is absolute. Section 167 (Pari Materia as Section 245 (4), (8) and (9) of the CA 2016.) of the Companies Act 1965 does not create the right but acknowledges a director’s existing common law right to inspection. This right ensures directors can properly discharge their duties of care, skill, and diligence. Companies cannot deny directors access to records, though the right must be exercised bona fide for the company’s purposes. Low Ean Nee v SNE Marketing Sdn Bhd [2024] 1 CLJ 24; Dato’ Seri Timor Shah Rafiq v Nautilus Tug & Towage Sdn Bhd [2018] 8 MLJ 394

The Defendants’ contention that the Plaintiff’s present application is abusive or motivated by collateral purpose is unsupported by clear, affirmative evidence. The Defendants have not pointed to objective facts showing that inspection will be used other than to discharge the Plaintiff’s duties as director. The bare assertion of abuse or of approbation and reprobation is not enough. The request plainly falls within the ambit of a director’s duties and appears bona fide on its face.

The Defendants rely upon the statutory retention period prescribed under Section 245 of the Companies Act 2016, namely seven (7) years, need not be produced, in essence the records specifically are those from 2004 to 2009. Having considered the submissions, the Court is in agreement with the Defendant that the records sought, namely those from 2004 to 2009, fall outside the statutory retention period prescribed under Section 245 of the Companies Act 2016, which requires preservation for seven (7) years only. These documents are undeniably old records, and the Court accepts that there is a possibility they are no longer available.

However, the Court observes that while Section 245 does indeed impose a statutory obligation to maintain proper accounting records for a minimum of seven years, the provision does not operate to extinguish a director’s right of inspection in respect of records which continue to exist. If older records are still in the possession or custody of the company, they remain subject to inspection. The statutory requirement to retain records for seven years is a threshold obligation but does not dispense with the duty to produce records that still exist.

Conversely, where records genuinely no longer exist, the company cannot be compelled to produce what is unavailable. In such circumstances, the appropriate safeguard is the provision of an affidavit of non‑existence, sworn by a responsible officer of the company, to confirm that the records in question are no longer in existence. It is therefore open to a defendant to say older papers are not available, but that assertion must be positively proven by affidavit evidence describing steps taken to locate the documents, the date and circumstances of destruction or loss, and the persons searched. General assertions of non‑availability without particulars are insufficient. Multi-Purpose Credit Sdn Bhd v Tan Sri Dato' Paduka (Dr) Ting

Nonetheless, many of the Company Records sought by the Plaintiff are recent ranging from 2023 to 2025, or relate to transactions connected to the sale proceeds. Those documents plainly should exist and be producible if in the company’s possession or control. This Court therefore orders production of all records in Annexure A which are in existence or under the control of the company or its officers, without distinguishing by age, subject only to what follows regarding genuine non‑existence. In the Malaysia Building Society Bhd v Tan Sri General Ungku Nazaruddin bin Ungku Mohamed [1998] 2 MLJ, the court clarified that legal process is properly used when invoked to exercise rights, not as an abuse of court, echoing Lord Denning MR’s view in Goldsmith v Sperrings Ltd that legal process vindicates rights and enforces just claims. Applying this principle, the Plaintiff’s Originating Summons was filed to enforce his absolute statutory rights under the Companies Act 2016 as a director to inspect and copy company records, following the Defendants’ deliberate denial of those rights. This demonstrates that the Plaintiff’s action is a legitimate and proper use of legal process to uphold directors’ statutory entitlements. Evidentiary objections to untranslated documents and self‑generated documents in Exhibit EKW-17.

The Defendants object to the use of certain documents on the ground that they contain Mandarin characters and lack proper translations. The Court notes that, as a matter of procedure, an exhibit tendered in a language other than the national language or English may be admitted provided that a translation is supplied, or where the parties consent to its use. In the absence of such translation or agreement, reliance upon the exhibit is improper.

Failure to supply a translation may impede the opposing party’s ability to verify the content of a document. The Court proceeds on the basis that the absence of translation is just a procedural matter. Where a party seeks to rely upon a document in a foreign language, that party bears the obligation to provide a translation upon request, or alternatively to allow reasonable time for translation to be effected. The Court therefore holds that reliance upon Exhibit EKW-17, or any similar document containing Mandarin characters, is conditional upon the provision of a proper translation. Without such translation, the exhibit cannot be given weight in these proceedings.

In the present case, as mentioned earlier, the Plaintiff stands in the position of director, shareholder, and contributory of the First Defendant, a company. By virtue of statute and common law, he is entitled to inspect the Company Records in order to discharge his fiduciary duties and the Court is satisfied that the request is bona fide and made in the interests of the company. The Defendants have not discharged the burden of proving any improper motive or bad faith on the part of the Plaintiff. Accordingly, the Plaintiff’s entitlement to inspection is established, subject to appropriate safeguards and conditions to be determined.

For the foregoing reasons, the Court makes the following orders: a) The Originating Summons is allowed with cost. b) The Defendants, jointly and severally, within 14 calendar days from the date of this order, shall produce and make available for inspection by the Plaintiff and the Plaintiff’s approved auditor, WH & Co , Ng Wai Hoong, at the registered office of the 1st Defendant or such other location as the parties may agree, all documents, records and papers described in Annexure A of the Originating Summons that are in the possession, custody or control of the 1st Defendant or in the possession, custody or control of any of the Defendants c) The inspection shall be undertaken by the Plaintiff’s approved auditor acting for the Plaintiff, and the auditor and his staff shall be bound by the written undertaking filed in Court. and the auditor must comply strictly with the confidentiality undertaking. d) The Defendants shall prepare and provide copies of all documents produced for inspection in a legible form, and shall facilitate reasonable copying and reproduction. Any copying costs shall be reasonable and shall not be used as a device to deny access. If agreement cannot be reached on a fair copy charge, the matter may be returned to the Court for determination. e) If any document called for by Annexure A is alleged not to exist, the Defendants shall, within the same 14‑day period, file an affidavit identifying the document, stating whether the document ever existed, describing the steps taken to locate it, stating where and when it was last held, and if destroyed the date and circumstances of destruction and who authorised it. Bare denials of existence will be insufficient. f) The Defendants shall, disclose and produce minutes, finalised or draft, and any audio or electronic recordings or contemporaneous notes of the Board meeting held on 4 April 2025 (the BOD Meeting) and all subsequent Board minutes and communications relating to the sale to Felcra Berhad, disbursements of sale proceeds, treatment of director advance accounts, and any entries described in the Plaintiff’s pleadings and affidavit. g) The 2nd, 3rd and 4th Defendants are directed to deliver to the Plaintiff and the Plaintiff’s auditor, within the 14‑day period, all documents in their possession or control relevant to the payments and transactions identified in the Plaintiff’s affidavit and in Annexure A. h) The Defendants shall file within 7 days after the conclusion of the inspection an affidavit of compliance or partial compliance identifying documents produced and certifying that all documents in their possession or control responsive to Annexure A have been produced, however, where any documents are stated not to exist, an affidavit must be filed to comply with paragraph (e) above. i) The Plaintiff is permitted to make copies and extracts from the documents produced. The Plaintiff may instruct his auditor to collate and copy documents and to prepare a schedule of transactions drawn from the records for the Plaintiff’s internal use and for use in subsequent proceedings if necessary. Date : 7 May 2026 SGD SHOBA DORAI RAJAH JUDICAL COMMISSIONER SHAH ALAM HIGH COURT Solicitor for the Plaintiff: NIK AIMI NABILAH [MESSRS CHAN LEE & CO] Solicitor for the Defendant 2,3,4: JOSHUA KONG JUN WAI [MESSRS DALJIT SINGH PARTNERSHIP.]