Directors possess an absolute right to inspect company records under statutory provisions unless clear proof of ulterior motives exists for denial.

[1] This case concerns an application by a director by way of an originating summons (encl 1) to inspect the financial records of the defendant company he serves, and for the appointment of an auditor to assist him for such purpose. The defendant sought (in encl 3) to strike out the originating summons.

[2] This striking out application was heard earlier than and separately from the originating summons. The arguments for both applications presented by the parties are however very substantially similar, and are reliant on the same affidavits.

[3] I dismissed the striking out application of the defendant, but granted the inspection request for the plaintiff at the conclusions of the both hearings, and highlighted the key grounds for my decisions, respectively. This judgment contains the full reasons for both decisions.

Key Background Facts

[4] The plaintiff is a director serving the board of directors of the defendant. He was appointed a Managing Director on 2 November 2012. There are two other directors on the board of the defendant, namely Lee Chiah Cheang and Sin Kiong Fatt.

[5] On 11 November 2013, the directors resolved for the defendant to obtain a loan facility from Public Bank for the amount of RM8.5 million. In pursuance of a number of directors circular resolutions all dated 13 February 2014, it was determined that the signatures of any two of the defendants directors would be sufficient to validate a cheque payment of the defendant in respect of payments exceeding RM5,000.00.

[6] A significant development occurred when the board, specifically the two directors of the defendant other than the plaintiff, by way of a directors circular resolution dated 28 August 2015 established an Executive Committee ("EXCO") to the effect that certain business transactions or dealings for the defendant could only be pursued by the directors if authorised by the EXCO, for which Lee Chiah Cheang had been made its chairman.

[7] The plaintiff claimed that he had stopped signing cheques and more pertinently was denied access to the defendants accounting and financial documents. At the defendant companys annual general meeting on 30 August 2016, the plaintiff raised his objection to Lee Chiah Cheangs proposal to utilize the Public Bank facility for contract works or the acquisition of a small company or to finance out the loan.

[8] On 18 November 2016, the plaintiff unilaterally issued a letter to Public Bank Bhd, United Overseas Bank (Malaysia) Bhd, OCBC Bank (Malaysia), AmBank Islamic Bhd and Industrial and Commercial Bank of China (Malaysia) Bhd to requesting these institutions to freeze the defendants monies held in those respective banks (the "Impugned Acts"). These Impugned Acts are contended by the defendant to be the principal source of its present dispute with the plaintiff. This is also given the fact that on even date, the plaintiff had also written to the directors and the company secretary of the defendant company, expressing his intention to dispose of his shareholding to one Pecol Industries Sdn Bhd.

[9] AmBank Islamic did act on the plaintiffs request and froze the dealings in the defendants bank account maintained thereat. The defendant maintains that the Impugned Acts wer