TAS CAPITAL SDN. BHD. v Muhammed Shareef Bin Mohamed Sagubar (PA-22NCvC-171-11/2025)

MUHAMMED SHAREEF BIN MOHAMED SAGUBAR

NAJIYYAH BINTI MOHAMED SAGUBAR ALI

MUHAMMAD ANEES BIN SHAIK OTHMAN

GANU JAYA SDN. BHD. (NO. SYARIKAT: 43580-T) …DEFENDAN-DEFENDAN 26/07/2026 01:55:49 PA-22NCvC-171-11/2025 Kand. 128 S/N obmfQA0jm0aGZwgeS6mhdQ GROUNDS OF JUDGMENT (After Full Trial) INTRODUCTION [1] This is a derivative action filed by the Plaintiff pursuant to the leave of Court dated 4.12.2020 at the Penang High Court, Originating Summons No. PA-24NCvC-731-10/2020. Khatija Binti Mohd Idris (Khatija) and Fathima binti Mohd Idris (Fathima) as Administrators of the estate of their late father, Mohd Idris A/L S.M. Mohd Yusoff Rowther (Mohd Idris), obtained leave under Sections 347 and 348 of the Companies Act 2016 (CA 2016), to commence the present action in the name of and on behalf of the Plaintiff, TAS Capital Sdn. Bhd. [2] The Plaintiff seeks a declaration that the issuance of 943,400 shares (Shares) in the 4th Defendant (D4) to the 1st Defendant (D1) on 29.5.2017 is void and illegal, and for an Order that the Shares be cancelled and set aside on the grounds that the issuance was effected in breach of the provisions of the CA 2016, and the Memorandum and Articles of Association of D4, without consideration and to the detriment of the Plaintiff’s position in D4. [3] The trial was held on 6.11.2025, 10.11.2025, 11.11.2025 and 21.11.2025 and the following witnesses testified at the trial-a) Fathima binti Mohd Idris – PW1 b) Chandrasekaran a/l Sinnian – PW2 c) Muhammad Anees bin Shaik Othman – DW1 S/N obmfQA0jm0aGZwgeS6mhdQ d) Muhammed Shareef bin Mohamed Sagubar – DW2 e) Najiyyah binti Mohamed Sagubar Ali – DW3 f) Barathi A/P K. Paramasivam – DW4 g) Rahmat bin Ali – DW5 [4] At the end of the trial, on a balance of probabilities, this Court has allowed the Plaintiff’s claim. The reasons for the decision are as deliberated herewith. BRIEF FACTS AND PARTIES CONTENTION [5] The Plaintiff, TAS Capital Sdn. Bhd. has commenced this action pursuant to Section 347 of the CA 2016. [6] D1 and the 2nd Defendant (D2) are directors and shareholders of the Plaintiff. [7] The 3rd Defendant (D3) is the Company Secretary of the Plaintiff and D4. [8] D4 is a registered company essentially operating as a licensed stevedore and cargo handler. [9] The dispute concerns the 943,400 shares acquired by D1 in D4 on 29.5.2017. [10] Previously, the Plaintiff had 39,600 shares in D4 and was the majority shareholder. It is the Plaintiff’s contention that D1, who was also a shareholder and director of the Plaintiff, had wrongfully acquired the S/N obmfQA0jm0aGZwgeS6mhdQ Shares in D4 and thereby deprived the Plaintiff of being a majority shareholder in D4. [11] At the material time when D1 acquired the Shares, the directors and shareholders of the Plaintiff were as follows- 1) Muhammed Shareef bin Mohamed Sagubar (D1) 2) Najiyyah binti Mohamed Sagubar Ali (D2) 3) Mohd Idris a/l S.M. Mohd Yusoff Rowther (Deceased) [12] According to the Plaintiff, in 2015, D4 was on the verge of ceasing operations when the Plaintiff acquired an interest in D4 primarily to support the operations of its related company, TAS Agency Sdn Bhd, in which Mohd Idris also held an interest. [13] Thus, in 2017, the Plaintiff acquired the 39,600 shares in D4 through two individuals, Mohamed Adnan bin Mohamed Abdul Kader (Adnan) and Mohamed Azman bin Mohamed Abdul Kader (Azman). The Plaintiff now contends that Adnan and Azman acquired these shares as nominees of the Plaintiff, whereas D1 contends that Adnan and Azman held the 39,600 shares as trustees for him, and has pleaded that he paid for the shares. [14] After the acquisition of the 39,600 shares in D4, the shareholders of D4 were as follows-i. Rahmat bin Ali 14,000 shares ii. Estate of Md Hashim bin Abu Bakar 2,000 shares iii. Koperasi Pelaut-Pelaut Pulau Pinang Berhad 1,000 shares S/N obmfQA0jm0aGZwgeS6mhdQ iv. TAS Capital Sdn Bhd (Plaintiff) 39,600 shares [15] The Plaintiff was then the largest shareholder in D4, holding 39,600 shares out of the 56,600 shares, with the remaining shareholders cumulatively owning 17,000 shares. [16] At that time, D1 was not a shareholder in D4. [17] Later, on 29.5.2017, D1 acquired the Shares, which were allotted by D4 and become the major shareholder of D4. D4’s EGM for the Acquisition of the 943,400 Shares [18] On 12.05.2017, Rahmat bin Ali (SP5), via a letter to D3, requisitioned an Extraordinary General Meeting (EGM) of D4 for the purposes of increasing D4’s share capital by 943,400 shares and allotting the entire increase to D1. On the same day, D3 issued a notice of an EGM to be held on 29.05.2017 at 11 am to approve the increase in share capital and the allotment of shares to D1. [19] The Plaintiff contended that the increase in D4's Shares was only discovered on 30.7.2018, stating that-

The SSM search, which is timestamped 30.7.2018 at 2:44 pm.

(ii) Email from Mohd Idris to D3 on 14.8.2018, with item 1.2 stating “likewise in respect of the increase in share capital of Ganu Jaya Sdn Bhd, I was not informed about this nor had S/N obmfQA0jm0aGZwgeS6mhdQ I any knowledge about this until I was informed by Cik Khatija after she had done a company search with SSM” and item 1.3 stating “In Ganu Jaya Sdn Bhd too the agreement was that there would be equal shareholding between En Shareef, Cik Fathima and Khatija”.

(iii) If Mohd Idris believed that the company was to be owned on a 50:50 basis in August 2018, it is impossible that he would have agreed to or accepted a dilution in May 2017. [20] The Plaintiff further contended that the fact that the notice of the EGM was suppressed from Mohd Idris can be inferred from the email dated 7.8.2018 at 2:19 pm from him to D3, item 3, where he specifically asked “In respect of the increase of the share capital in Ganu Jaya Sdn Bhd in May 2017, is there a requirement to notify the directors/shareholders of TAS Capital Sdn Bhd of this?” [21] The Plaintiff maintained that since the notice was never served for the EGM, the Defendants' reliance on the indoor management rule is misplaced. The rule in Royal British Bank v Turquand (1856) is designed to protect outsiders dealing with a company in good faith. It is not a shield to protect insiders, specifically D1 and D3, who are, respectively, the Director and Company Secretary of both the Plaintiff and D4. The present derivative proceeding is filed under Section 347 of CA 2016 “in the best interest” of the Plaintiff. The Turquand rule cannot be a defence to Section 347. S/N obmfQA0jm0aGZwgeS6mhdQ [22] The Plaintiff also contended that D1 stands to benefit from the EGM, and as such, had a vested interest in making sure that the Plaintiff would not object to its majority position being diluted. There is a conflict of interest, as D1 stands to benefit at the Plaintiff's detriment. D1, as a director of the Plaintiff, had a duty to avoid a situation where his personal interest in acquiring shares in D4 conflicted with his duty to the Plaintiff. By receiving the notice and failing to place it before the Board, he breached this duty. [23] The EGM notice never reached the Board of the Plaintiff for proper deliberation, nor was any decision ratified by the Plaintiff’s shareholders. The fact that there are no minutes of the meeting, board resolution, or members' resolution reflecting such a discussion is obvious. The Plaintiff asserted that this is the case as there were no such deliberations and that the notice was suppressed to facilitate the fraud. [24] It was also the contention of the Plaintiff that the notice of the EGM was issued to D1, Rahmat bin Ali and Muhammed Abu Talib bin Mohamed Sagubar Ali (Abu) (none of whom were shareholders of D4) but not issued to the Plaintiff, Estate of Md Hashim bin Abu Bakar (Estate of Md Hashim), nor the Koperasi, who were shareholders of D4. [25] So, the Plaintiff contended that the notice of the EGM was issued without the prior authorisation of D4’s Board of Directors. It was only on 29.05.2017 that D4’s Board of Directors convened and resolved to convene an EGM to be held on 29.05.2017 at 11 am for the purposes of allotment of the Shares, as proposed by Rahmat on 12.05.2017; however, this was done in the absence of the Plaintiff. S/N obmfQA0jm0aGZwgeS6mhdQ [26] On the same day, 29.05.2017, an EGM was purportedly held, where D4’s share capital was increased by 943,400, and the entire amount was allotted to D1. [27] This EGM was attended by D1, D2, and D3, as well as Rahmat, Abu, and one Razak Khan, as per the attendance list. [28] According to the Plaintiff, since the Plaintiff is a corporation, not an individual, with an interest in D4, pursuant to Section 333(1) of CA 2016, a person or persons are required to act as its representative or representatives at any meeting of members of D4. This appointment of the representative is to be by way of resolution of the Board or other governing body of the Plaintiff, and by s 333(5) of the Act, a certificate of authorisation by the Plaintiff shall be prima facie evidence of the appointment. The Plaintiff had never appointed any such representative to act on its behalf at the EGM of D4. [29] Razak Khan purportedly attended the EGM on behalf of the Koperasi, whereas D2 purportedly attended on behalf of the Plaintiff. However, the Plaintiff had never appointed any representative pursuant to Section 333 of CA 2016, and so D2 had no authority to represent the Plaintiff. Similarly, there is no proxy form or letter of authorisation to show that Razak Khan was duly appointed by the Koperasi to represent them. [30] For the appointment of a proxy, Section 334 of CA 2016 provides for the appointment of proxies, with subsection (3) requiring an instrument appointing a proxy to be deposited at the registered office not less than 48 hours before the meeting. S/N obmfQA0jm0aGZwgeS6mhdQ [31] As the Defendants had not produced such an instrument for Razak Khan or the certificate of authorisation for D2, neither had legal standing to be present at the EGM. Further, Article 49 of D4’s Memorandum and Articles of Association states as follows- “49. Three members present in person or by proxy shall form a quorum. No business shall be transacted at a general meeting unless a quorum is presented when the meeting proceeds to business”. [32] Further, the Plaintiff contended that the EGM held on 29.5.2017 lacked a quorum, thereby breaching Article 49 of the Memorandum and Articles of Association of D4, which pertains to meetings for the alteration of shares. This is because D2, who purportedly attended the EGM as a representative of the Plaintiff, was not an authorised representative nor a proxy of the Plaintiff. This was also confirmed by D3, who stated that he had not seen any resolution or document authorising D2 to attend the EGM-Yes, thank you very much. Ok. Thank you very, very much. Now, despite your answer, ok, we will just focus on Najiyyah attending for TAS Capital, ok? Have you seen any document, written document, authorizing Najiyyah Binti Mohamed Sagubar to attend for TAS Capital? Have you seen any resolution of TAS Capital authorizing Najiyyah to attend this meeting on behalf of TAS Capital? S/N obmfQA0jm0aGZwgeS6mhdQ At this meeting, did you, as the company secretary, request for written authorization showing Najiyyah can attend for TAS Capital? So, I put it to you, En Anees, that on the day this meeting was conducted, Najiyyah had no authority to represent TAS Capital. Agree, disagree, not sure? Disagree. [33] Therefore, it is the contention of the Plaintiff that D2 was not an authorised representative of the Plaintiff. No proxy form was produced for the Koperasi, and there was no representative for the Estate of Md Hashim. As a result of this deficiency, the meeting was attended by only one shareholder, namely Rahmat. Thus, the Plaintiff submitted that the transactions at the EGM would be null and void. [34] The Plaintiff further submitted that Rahmat was, for all intents and purposes, only acting as a proxy for D1, as he himself admitted during cross-examination-Okey, tak pasti. Okey, kita rujuk balik kepada dokumen pada mukasurat 51, Lampiran 57. Ini adalah mesyuarat yang melibatkan Ganu Jaya. En Rahmat, yang juga melibatkan Ganu Jaya. Tak apa, tadi kita rujuk kepada muka surat 52, nama Ganu Jaya ada. Ya. Soalan saya, adakah En Rahmat tahu tentang perjumpaan ini? Tak tahu. Adakah En Rahmat dijemput untuk hadir mesyuarat ini? S/N obmfQA0jm0aGZwgeS6mhdQ Tidak. Adakah En Rahmat diberitahu hasil mesyuarat ini? Tidak. Saya cadangkan, En Rahmat, pada kebanyakan masa En Rahmat serahkan semua kepada Shareef? Ya. [35] It was also the Plaintiff’s pleaded case that no such offer that satisfies Section 85(2) of CA 2016 had been made by D4 prior to the purported allotment of the Shares to D1. D4 failed to issue the requisite notice specifying the number of shares and the timeframe for acceptance/decline. [36] Aside from the lack of an offer, the Plaintiff submitted that the notice of the EGM issued on 12.05.2017 also appeared to have been suppressed. The Plaintiff asserted that it did not receive the notice, and no evidence was provided to contradict this. The document was sent to and received by a staff member of TAS Agency, who testified that the document was handed over to D1; the event thereafter remains in doubt. [37] According to the Plaintiff, the notice of the EGM was not distributed to or deliberated by the Plaintiff’s Board of Directors to form the company’s standpoint on the proposed resolution, which was solely done by Rahmat. As there were no such deliberations, the Plaintiff could not have arrived at a conclusion on how to proceed nor authorised D2 to attend or approve D4’s EGM on 29.05.2017. Therefore, the effect of D4’s EGM on 29.05.2017 constitutes an unfairly prejudicial conduct within the meaning S/N obmfQA0jm0aGZwgeS6mhdQ of Section 346 of CA 2016, as it resulted in the dilution of the Plaintiff’s shareholding in D4. [38] Further, the lack of an offer by D1 and the deliberate suppression of the notice show that the allotment of shares to D1 was not for a bona fide corporate purpose but was intended to dilute the Plaintiff ’s majority stake. [39] Thus, the Plaintiff contended that D1, D2, and D3 acted in their own interests (or in D1's interests) rather than in the best interests of the Plaintiff, thereby violating their respective fiduciary and statutory duties. [40] The Plaintiff further contended that, if D1 was indeed the beneficial owner of the share owned by Mohd Idris, D1 would have had the opportunity to make such a claim when leave was sought to initiate this derivative action. D1 did not do so. Further, Mohd Idris remained a shareholder and director of the Plaintiff until his passing, and no evidence was adduced to show any efforts to have the shares he owned be transferred to D1. Similarly, D1 and D2, as directors of the Plaintiff, had approved the transmission of Mohd Idris’ share into his estate. [41] Regarding Mohd Idris’s purported lack of interest in D4, the Plaintiff cited an email exchange between Mohd Idris and D3. At item 1.3, Mohd Idris expressly stated that he has an interest in D4 pursuant to an agreement. [42] Finally, to address the claim that Mohd Idris knew of the allotment of Shares to D1, the Plaintiff refers to the email exchange on 14.08.2018, S/N obmfQA0jm0aGZwgeS6mhdQ where Mohd Idris expressly stated that he had no knowledge of the increase in D4’s share capital until he had been informed by Khatija. Lack of Proof of Payment as Consideration for the Shares [43] It is also the Plaintiff’s pleaded case that there was no consideration for the increase in share capital. D1 has attempted to cover up this breach. It is also necessary that, for D4, as a company, any money going in and out of the company must be properly recorded and reflected in its financial records. [44] D1 has not discharged the onus on him to prove these payments, as explained in Ganam Rajamany v Somoo Sinniah [1984] 1 CLJ Rep 123- “In his judgment the learned Judicial Commissioner held that PW2 was in fact plaintiff's agent. In our judgment, it was not sufficient to show that the $10,000 was paid to PW2 as agent of the plaintiff, the learned Judicial Commissioner should have gone further and consider whether or not the defendant had discharged the onus of proving that PW2, as agent, had authority to receive the deposit of $10,000 on behalf of the plaintiff”. [45] The Plaintiff further stated that D1’s cash flow statements as of 28.02.2018 state that RM 943,400 was raised in that financial year for the ‘issuance of shares’; however, the Defendants themselves have demonstrated that this statement is untrue. [46] It was observed that the Shares were issued on 29.05.2017, and D4's financial year ends in February. D4’s purported vouchers on page 5 of Enclosure 58 claim that RM 643,462.10 was paid after the financial year end as of 28 February 2018. S/N obmfQA0jm0aGZwgeS6mhdQ [47] Further, the bank statements showed that the monies were purportedly paid in March, April, July and August 2018, after D4’s books were closed. As such, how could there have been RM943,400 paid as at 28 February 2018? [48] This material contradiction is concerning as it shows that D4’s books do not tally with the bank statements. [49] In D1’s witness statement, in answer to Question 27, only items i, ii, iii and iv were purported payments made prior to the issuance of the Shares on 29.05.2017. All other payments were made after the issuance of the Shares, with the largest payment of RM588,000 made on 30.08.2018, a year after the issuance of the Shares. [50] In view of these irregularities, the Plaintiff submitted that there is no evidence that the 1st Defendant had paid for the Shares. It is very clear that there was no consideration for the increase of the share capital at the material time. [51] In regard to D3, the Plaintiff submitted that D3 had breached his statutory, fiduciary and common law duties to the Plaintiff in his conduct pertaining to the issuance of the 943,400 shares to D1 in D4, which was detrimental to the Plaintiff’s position as a majority shareholder in D4. [52] The Plaintiff questioned the cash flow statement of D4 for the year ended 28.2.2018, which showed that RM943,400 was raised, but the Defendants’ Bank records showed that most payments were made after S/N obmfQA0jm0aGZwgeS6mhdQ that date. In fact, the payment of RM588,000 on 30.8.2018 occurred a year after the allotment, following the Plaintiff's discovery of the increase in capital on 30.7.2018. Subsequent emails to rectify the situation were sent after the meeting held on 6.8.2018, which indicated a clear attempt to retrospectively cover up the lack of consideration at the material time. The Plaintiff contended that this shows the fraudulent conduct of D1 and D3. [53] During cross-examination, D3 admitted to not having been able to verify the purported payments by D1 to D4 at the material time-Now look at the document at page 13. You said you verified with the bank statement. And the auditor. I am just going to the bank statement. Now, have you seen a bank statement where cash was banked in on the 29th of May for the sum of 789,733.60. Just answer the question. Have you seen a bank statement where this sum was banked into the bank account of Ganu Jaya? Yes or no? The amount banked into the bank is per what the ledger has spelt, ok. En Anees, you just answer my question. I am asking you. If you disagree, you say no, you can clarify. I disagree. Ok, did you see this amount being entered into the bank statement, this amount going into the account? Which amount? 789,733.60 on the 29/05/2017. Repeat the amount? 789,733.60, cash. You see, there is a voucher, cash. Did you see a bank statement this amount going in? S/N obmfQA0jm0aGZwgeS6mhdQ So this amount cannot be verified from the bank statement. Do you agree with me? Agreed. [54] The contradiction between the Bank Statements and Audited Financial Statements shows that the Defendants are in breach of Sections 245 and 591 of the CA 2016. [55] D3 contended that he committed no offence, as decided by SSM. On this, the Plaintiff relied on Spencer Bower, Turner and Handley’s “The Doctrine Of Res Judicata” (Third Edition); the authors stated at page 141- “At common law an acquittal does not establish innocence against the world and is not even evidence in civil proceedings. There are many reasons for this, not least the difference in the onus of proof. The logic of this proposition has been defended in decisions of the High Court of Australia. In Helton v Allen the Court held that an acquittal on a charge of murder did not establish an estoppel in favour of the accused in civil proceedings brought to prevent him deriving a financial benefit from the death”. [56] The Plaintiff further referred to the cases of Genevieve O’Donnell, Applicant, v Patrick Hegarty, Defendant [1941] I.R. 538 and Helsham v Blackwood (1851) 11CB 111 that the principle of autrefois acquit does not apply in the present Suit. In Genevieve O’Donnell, Applicant (supra), the Irish High Court held- “Held that the subject-matter of the affiliation proceedings was not res judicata, that the pleas of autrefois acquit and estoppel could not be raised and that the acquittal of the S/N obmfQA0jm0aGZwgeS6mhdQ defendant on the criminal trial was no bar to the affiliation proceedings.” [57] Likewise, in Helsham (supra), the Court’s decision was summarised as follows- “A declaration for a libel imputing to an officer in the army, that he had been guilty of murder, in killing his opponent in a duel; and further alleging that the duel was supposed to have been fought under circumstances revolting to the ordinary notions of honour, - is not answered by a plea alleging merely that the plaintiff killed his antagonist, and was tried for murder, and acquitted: the defendant was bound to justify also the matter of aggravation”. [58] See also the cases of Datuk S Nallakaruppan & Ors v Datuk Seri Anwar bin Ibrahim and other appeals [2015] 4 MLJ 34 CA, and She Eng Gek v D.A. De Silva (1957) 23 MLJ 55. [59] Above all, the Plaintiff contended that the acquisition of 943,400 shares by D1 in D4 was void, illegal and ought to be set aside. Other prayers in the Statement of Claim are for consequential orders. The Plaintiff’s claim is premised on the following grounds-a) The allotment of the Shares by D4 was illegal, void and issued contrary to the provisions of the CA 2016 and also the Articles of Association of D4; b) The allotment of the Shares by D4 was contrary to the CA 2016 on the ground that no valid notice calling for the EGM of D4 to approve the allotment of the Shares was served on the Plaintiff as the shareholder of the 39,600 shares; S/N obmfQA0jm0aGZwgeS6mhdQ c) The Plaintiff was not given notice of the EGM to approve the allotment of the Shares, and the failure to do so has deprived the Plaintiff of the opportunity to acquire the Shares. d) There was no meeting of the Plaintiff with regard to the acquisition of the shares by D; and e) D1 did not pay any consideration for the acquisition of the allotted Shares. [60] As for the Defendants, it was pleaded that-a) D1 was the beneficial owner of the Plaintiff’s share owned by Mohd Idris. b) Mohd Idris had no interest in D4's business. c) Mohd Idris was aware of the issuance of the new shares to D1. [61] The Defendants argued that the Plaintiff had knowledge of the increase in D4’s capital as early as 19.2.2018. The EGM notice was received and acknowledged by DW4 (Barathi), staff of the office of TAS Agency Sdn Bhd, who testified that it was handed over to D1, and D1 claims to have notified Mohd Idris. The Defendants further submitted that D4 was entitled to serve the notice of the meeting on DW4 (Barathi) and relied on the indoor management rule or the Turquand rule. [62] The Defendants also relied on the minutes of the meeting dated 19.2.2018 to impute to the Plaintiff knowledge of the increase in the shares in D4. S/N obmfQA0jm0aGZwgeS6mhdQ [63] The Defendants contended that the issue of non-payment of the Shares is a matter between D4 and D1. [64] The Defendants contended that, since Mohd Idris knew of the EGM notice, he obviously agreed not only to the allotment of Shares to D1 but also to the condition that the Plaintiff would not take up the Shares. [65] The Defendants submitted that if the evidence adduced at this trial establishes that Mohd Idris, Fathima, and Khatija knew of the allotment of shares, then all other issues will be laid to rest. This means that the Plaintiff knew of the allotment of shares; the Plaintiff did not want to take up the shares, and the question of D1 holding the shares as trustee for the Plaintiff does not arise, and the Plaintiff is estopped from making any claim. [66] Regarding this issue, there was conflicting oral evidence. The Plaintiff’s witness, that is PW1 (Fathima), in her evidence-in-chief and even in cross-examination, maintained that Mohd Idris, her sister Khatija and she only became aware of D1’s acquisition of the Shares on 30.7.2018, which is also the Plaintiff’s pleaded case. [67] The Defendants, on the other hand, maintained that on 19.2.2018, Mohd Idris, Fathima and Khatija already had knowledge of D1’s acquisition of the Shares based on the minutes of the TAS Group meeting held on 19.2.2018. and that D1 in his evidence has stated that he had informed Mohd Idris of the notice dated 12.5.2017 when the same was received. [68] Even though the minutes of the meeting held on 19.2.2018 were signed by Mohd Idris, Khatija, and Fathima, PW1, Fathima contended that S/N obmfQA0jm0aGZwgeS6mhdQ the minutes dated 19.2.2018 were backdated and that they were only signed on 6.8.2018, when a meeting was held between the relevant parties. So, whose version is the true one? [69] The Defendants contended that the email dated 30.7.2018 from Mohd Idris and/or Fathima to D3 shows that the Plaintiff already knew of D1's acquisition of the Shares well before 30.7.2018. It was Fathima's evidence that she had conducted a company search on 30.7.2018 at 2.44pm. On the same day at 4.31 pm, about 1 hour and 45 minutes later, this email from Fathima to D3, which was copied to the 1st Defendant, states that it was agreed that “Ganu Jaya’s shares are to be transferred to Idris”. So that 245,750 shares each are allocated to Khatija and Fathima in D4. [70] In this regard, this Court is of the view that the minutes were indeed signed on 19.2.2018, as further confirmed by the evidence given by Khatija in the previous case of Penang High Court Civil Suit No. PA- 22NCvC-36-02/2021. There was no backdating of the minutes. [71] Is the allotment of the shares of D4 contrary to its articles of association? The Plaintiff contended that the acquisition of the Shares by D1 is contrary to the Articles of Association of D4. The Defendants, on the other hand, contended that D1's acquisition of the Shares is not a transfer or transmission of shares. It resulted from an allotment of shares by D4. It involved the creation of new shares by D4 in Article 4 of the Articles of

Association of D4, which reads- The shares shall be under the control of the Director who may allot and dispose of the same to such persons on such terms and in such manner as they shall think fit, subject to the provisions of these Articles. S/N obmfQA0jm0aGZwgeS6mhdQ [72] The Defendant submitted that SSM, in dealing with the 3 complaints lodged by Mohd Idris, Fathima, and/or Khatija, had found no violation of the Articles of Association in the allotment of the Shares to D1. [73] The Defendants further submitted that whether D1 had paid for the Shares or not is for D4 to raise the issue against D1. The Defendants also submitted that D4’s Annual Report for the years 2018 and 2019 did not disclose that the purchase price of the allotted Shares had not been paid. [74] D1 contended that he had, in fact, paid for the Shares as follows-i. 9th March 2017 – RM23,796.95 – Bank Statement at Page 144 of CABD Encl. 57; ii. 18th April 2017 – RM27,829.50 – Bank Statement at Page 145 of CABD Encl. 57; iii. 4th May 2017 – RM30,000.00 – Bank Statement at Page 146 of CABD Encl. 57; iv. 5th May 2017 – RM27,039.95 – Bank Statement at Page 146 of CABD Encl. 57; v. 5th June 2017 – RM29,322.65 – Bank Statement at Page 147 of CABD Encl. 57; vi. 15th June 2017 – RM27,909.70– Bank Statement at Page 147 of CABD Encl. 57; vii. 18th July 2017 – RM30,000.00 – Bank Statement at Page 148 of CABD Encl. 57; viii. 13th October 2017 – RM30,000.00 – Bank Statement at Page 149 of CABD Encl. 57; ix. 25th October 2017 – RM29,789.70 – Bank Statement at Page 149 of CABD Encl. 57; x. 9th March 2018 – RM20,000.00 – Bank Statement at Page 150 of CABD Encl. 57; S/N obmfQA0jm0aGZwgeS6mhdQ xi. 10th April 2018 – RM10,462.10 – Bank Statement at Page 151 of CABD Encl. 57; xii. 17th July 2018 – RM25,000.00 – Bank Statement at Page 152 of CABD Encl. 57; and xiii. 30th August 2018 – RM588,000.00 – Application for Remittance at Page 24 of CABD Encl. 58 (Exhibit D6U), Official Receipt dated 3.9.2018 issued by Ganu Jaya Sdn. Bhd at Page 4 of CABD Encl. 84 and Bank Statement at Page 5 to 6 of CABD Encl. 84. [75] The Defendants then submitted that the Companies Commission (SSM) is mandated under the Companies Commission of Malaysia Act 2001 to investigate any complaint of non-compliance with regard to the CA 2016. The 3 complaints were essentially against D3, the Company Secretary, and SSM. After an investigation, it was found that D3 committed no wrongdoing. In other words, any allegation of non-compliance with the CA 2016 was without any basis whatsoever. ANALYSIS AND FINDINGS Burden of proof [76] It is trite law that the onus lies on the Plaintiff to prove his claim to succeed against the Defendant under Sections 101 and 102 of the Evidence Act 1950 (See Datuk Mohd Ali bin Hj Abdul Majid & Anor v. Public Bank Berhad [2014] 4 MLRA 397; [2014] 4 MLJ 465; [2014] 6 CLJ 269; [2014] 4 AMR 301 and Tenaga Nasional Berhad (Formerly Lembaga Letrik Negara Tanah Melayu) v. Perwaja Steel Sdn Bhd (Formerly Perwaja Terengganu Sdn Bhd) [1995] 3 MLRH 196; [1995] 4 MLJ 673; [1995] 4 CLJ 670). S/N obmfQA0jm0aGZwgeS6mhdQ [77] Additionally, in a civil claim, the standard of proof is on a balance of probabilities (see Inas Faiqah Mohd Helmi (A Child suing through her father and next friend: Mohd Helmi Abdul Aziz) v. Kerajaan Malaysia [2016] 1 MLRA 647; [2016] 2 MLJ 1; [2016] 2 CLJ 885; [2016] 1 PIR 16; [2016] 2 AMR 217 (FC)), as well as the cases of Sinnaiyah & Sons Sdn Bhd v. Damai Setia Sdn Bhd [2015] 5 MLRA 191(FC); [2015] 7 CLJ 584; [2015] 5 AMR 497). [78] This matter concerns a dispute among family members: an uncle, Mohd Idris, who was a shareholder and director of the Plaintiff; D1 is the nephew of Mohd Idris and brother of D2, and D2 is Mohd Idris’s niece and sister of D1. While Fathima and Khatija are daughters of Mohd Idris and cousins of D1 and D2. [79] The Plaintiff’s claim under the statutory derivative action in Sections 347 and 348 of the CA 2016 is the means by which a member may, with leave, bring proceedings in the company's name to vindicate the company's rights where those in control of it will not. [80] The Plaintiff was initially the majority shareholder in D4. The EGM purported to allot and issue new shares to D1. The Plaintiff complained that the Shares were issued and allotted illegally to D1 in respect of D4, which, essentially, diluted the Plaintiff’s majority status and made D1 the majority shareholder of D4. [81] The Plaintiff contended that the notice of the EGM was issued without the prior authorisation of D4’s Board of Directors. It was only on 29.05.2017 that D4’s Board of Directors convened and resolved to convene an EGM to be held on 29.05.2017 at 11 am for the purposes of S/N obmfQA0jm0aGZwgeS6mhdQ allotment of the Shares, as proposed by Rahmat on 12.05.2017; however, this was done in the absence of the Plaintiff. [82] Upon perusal of the evidence and submissions of the parties, this Court is convinced that the EGM was not convened by a director’s resolution in accordance with Section 347 of the CA 2016. As such, it has caused injustice to the Plaintiff. [83] Further, the Plaintiffs’ rights as a majority shareholder in D4 were diluted during that EGM without prior notice and in breach of Section 85 of the CA 2016. For convenience, Sections 85(1) and (2) of the CA 2016 provide- “(1) Subject to the constitution, where a company issues shares which rank equally to existing shares as to voting or distribution rights, those shares shall first be offered to the holders of existing shares in a manner which would, if the offer were accepted, maintain the relative voting and distribution rights of those shareholders.

An offer under subsection (1) shall be made to the holders of existing shares in a notice specifying the number of shares offered and the time frame of the offer within which the offer, if not accepted, is deemed to be declined.” [84] In this regard, the Plaintiff rightly invoked its pre-emptive rights as a shareholder of D4. It is clear that the legislative intent of Sections 85 (1) and (2) is to “maintain the relative voting and distribution rights of the existing shareholders”. The law requires that new shares be offered to existing shareholders first to maintain relative voting and distribution rights. S/N obmfQA0jm0aGZwgeS6mhdQ [85] Aside from the lack of an offer, the Plaintiff submitted that the notice of the EGM issued on 12.05.2017 also appeared to have been suppressed. The Plaintiff asserted that it did not receive the notice. The document was sent to and received by a staff member of TAS Agency, who testified that the document was handed over to D1; thereafter, no one knows what happened to the notice. [86] The notice of the EGM was also not distributed to or deliberated by the Plaintiff’s Board of Directors to form the company’s standpoint. As there was no such deliberation, the Plaintiff could not possibly have arrived at a conclusion on how to proceed nor authorised D2 to attend or approve D4’s EGM on 29.05.2017. Therefore, the effect of D4’s EGM on 29.05.2017 constitutes an unfairly prejudicial conduct within the meaning of Section 346 of CA 2016, as it resulted in the dilution of the Plaintiff’s shareholding in D4. [87] Accordingly, this Court is of the view that, as the EGM is void, the newly acquired Shares are also void; this demonstrates substantial irremediable injustice arising from the alleged irregularity. [88] Further, this Court is also inclined with the Plaintiffs’ submissions that D2 does not have the standing to represent the Plaintiff in the EGM as Section 333 of the CA 2016 has not been complied with. Section 333 of the CA 2016 provides-Representation of corporations at meetings of members

(1) If a corporation is a member of a company, the corporation may by resolution of its Board or other governing body authorize a person or persons to act as its representative or representatives at any meeting of members of the company. S/N obmfQA0jm0aGZwgeS6mhdQ [89] The absence of Mohd Idris’ name on the attendance list and the absence of a written resolution authorising D2 to attend on behalf of the Plaintiff rendered the EGM defective, and there was no clear evidence that D3 had sent a written resolution of the Plaintiff authorising D2’s attendance or that D3 had demanded such documentation before permitting the EGM to proceed. [90] Therefore, this Court finds that D2 was not authorised to attend the EGM as the Plaintiff’s representative. [91] In regard to D1, this Court finds that it is the duty and responsibility of D1 as a director of the Plaintiff to exercise his powers in good faith for the best interest of the Plaintiff. This is as provided under Section 213 of the CA 2016 that-

“Duties and responsibilities of directors

A director of a company shall at all times exercise his powers in accordance with this Act, for a proper purpose and in good faith in the best interest of the company.

A director of a company shall exercise reasonable care, skill and diligence with—

the knowledge, skill and experience which may reasonably be expected of a director having the same responsibilities; and

any additional knowledge, skill and experience which the director in fact has.

A director who contravenes this section commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding three million ringgit or to both.” S/N obmfQA0jm0aGZwgeS6mhdQ [92] Obviously, D1 is the director of the Plaintiff. He has acquired the Shares of D4, in which the Plaintiff is the majority shareholder. This resulted in the Plaintiff’s shares being diluted. As a director of D1, it is his responsibility and duty to act in good faith and in the best interests of the Plaintiff and not otherwise. [93] The Defendants contended that D1 does not owe a statutory duty towards the Plaintiff, as a shareholder of D4. But as a director of the Plaintiff, D1 has acted in contravention of the Plaintiff’s interest by acquiring the Shares and diluting the Plaintiff’s majority shareholding. Obviously, this is detrimental to the Plaintiff’s position. [94] Such being so, this Court is of the view that D1 attended D4’s EGM not as the representative of the Plaintiff. He was attending the EGM in his personal interest to acquire those Shares of D4 for himself, and he also denied that the Shares were acquired for Mohd Idris to be held on trust. That the Shares were issued to D1 without notice being given to the Plaintiff or without the approval of the Plaintiff, and the Plaintiff was not served with the notice or any notice in relation to the EGM. The Shares were also issued to D1 without the same being first offered to the Plaintiff. [95] This Court is also inclined to the submission of the Plaintiff that D1 stands to benefit from the EGM, and as such, had a vested interest in making sure that the Plaintiff would not object to its majority position being diluted. There is a conflict of interest, as D1 stands to benefit at the Plaintiff's detriment. D1, as a director of the Plaintiff, had a duty to avoid a situation where his personal interest in acquiring shares in D4 conflicted S/N obmfQA0jm0aGZwgeS6mhdQ with his duty to the Plaintiff. By receiving the notice and failing to place it before the Board, he breached this duty. [96] Further, this Court finds that the contention of the Plaintiff that none of the illegal acts of the Defendants could have been done without D3’s involvement, complicity or connivance has basis. Also, this Court agrees that there was sufficient evidence; thus, on a balance of probabilities, there was a lack of consideration, as D1 has failed to pay in full the Shares. [97] The entire increase in paid-up capital was in breach of Sections 85, 333 and 334 of the CA 2016. Further, it contravenes D4’s Memorandum and Articles of Association, specifically Article 49 on Quorum. [98] This Court also observes that the EGM was scheduled in a clandestine manner, as if to conceal D1's acquisition of the Shares, thereby enabling it to be completed quickly without the Plaintiff's knowledge, who is a major shareholder of D4. This was also evidenced by the email correspondence indicating that Mohd Idris was either unhappy that the Shares were not equally allocated to his daughters or that the Shares should have been held in trust for the Plaintiff. [99] On this point, this Court observes that the entire increase in paid-up capital was in breach of Sections 85, 333 and 334 of the CA 2016. [100] Thus, the Defendants had acted in their own interests rather than in the best interests of the Plaintiff, thereby violating their respective fiduciary and statutory duties. S/N obmfQA0jm0aGZwgeS6mhdQ [101] Therefore, the effect of D4 ’s EGM on 29.05.2017 constitutes an unfairly prejudicial conduct within the meaning of Section 346 of CA 2016, as it results in the dilution of the Plaintiff’s shareholding in D4. CONCLUSION [102] Based on the facts and circumstances of the case and the totality of the evidence, this Court is of the considered view, on a balance of probabilities, that the Plaintiff has succeeded in proving its claim. The Plaintiff has established and manifestly shown, as pleaded, that the issuing of the 943,400 Shares to D1 in D4 was accompanied by breaches of statutory rules and fiduciary duties. Thus, the Plaintiff’s claim is allowed with costs. DATED: 24 JULY 2026 -SGD- (DR. SUZANA BINTI MUHAMAD SAID) Judge High Court 3 Georgetown, Pulau Pinang COUNSELS For the Plaintiff : Messrs Thayalan & Associates S/N obmfQA0jm0aGZwgeS6mhdQ For the 1st, 2nd and 4th Defendants : Messrs Vello & Associates For the 3rd Defendant : Messrs Daniel Annamalai S/N obmfQA0jm0aGZwgeS6mhdQ