SALINA MOHAMAD SUKOR vs MVD INTERNATIONAL SDN BHD & ANOR

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2018 MarsdenLR 1019

HIGH COURT MALAYA SHAH ALAM
SALINA MOHAMAD SUKOR – Appellant
Versus
MVD INTERNATIONAL SDN BHD & ANOR – Respondent
[Originating Summons No: 24NCC-87-10/2017]

Important Points

The court affirmed the necessity for good faith and interest of the company in derivative actions under the Companies Act 2016.

Subject

Company Law - Derivative Actions

Act Referred

Companies Act 2016: S.347, S.348

Headnote

The Plaintiff's application for leave to commence derivative action relates to breaches of fiduciary duty by the managing director, who founded a competing company without disclosure to shareholders, contravening the Companies Act 2016. The court determined the Plaintiff met the statutory prerequisites under ss 347 and 348, demonstrating good faith and the best interest of the company. The key issue was whether the Plaintiff had shown an arguable case for derivative action. The outcome was to grant leave for the Plaintiff to initiate proceedings on behalf of the company.

Table of Content
1. the application for a derivative action based on shareholder status. (Para 1 , 3)

[1] This is the Plaintiff's application for leave to commence derivative action, as a director and shareholder of the 1st Defendant company, MVD International Sdn Bhd ("MVD"), for the benefit of the 1st Defendant against Angel Checks Sdn Bhd (Company No 1194578-U), Paramjeet Singh a/l Teja Singh (IC No 690917-08-5511) ("Paramjeet") and Sohan Delvinderjit Kaur (IC No 710427-08-5880).

[2] The application for leave is made pursuant to ss 347 and 348 of the Companies Act 2016 , which provide as follows:

347 Derivative proceedings

(1) A complainant may, with the leave of the Court initiate, intervene in or defend a proceeding on behalf of the company.

(2) Proceedings brought under this section shall be brought in the company's name.

(3) The right of any person to bring, intervene in, defend or discontinue any proceedings on behalf of a company at common law is abrogated.

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