Appointment of a receiver requires a substantive connection to property in jeopardy, which was not established, and business judgments of directors should not be interfered with.

(1) Ex-parte Receiver and Manager Appointment/Ad-interim Injunction (Enclosure 3)

(2) Ad-interim Receiver and Manager Appointment (Enclosure 15)

Introduction

[1] This is a matter which involves two similar applications filed by the plaintiff, both essentially for an interim order for the appointment of a receiver and manager over the assets of the ninth defendant company. I dismissed the first at the end of the hearing upon a certificate of urgency, on 17 May 2016 ("the First Application") and again refused a substantially similar application filed on the basis of a new development, at the conclusion of submissions by counsel at a hearing on 26 May 2016 ("the Second Application"). This judgment contains the full grounds for both decisions on these applications.

Key Background Facts

The Parties

[2] The plaintiff is a director and at the time of the filing of the writ and statement of claim was a substantial shareholder (of about 7.791% of the share capital) of SCAN Associates Berhad, a company involved in the business of providing information and communication technology security solutions, listed on the ACE Market of Bursa Malaysia Securities Berhad, and is the ninth defendant herein. The ninth defendant company had been classified as a GN3 Company by the Bursa Malaysia pursuant to Guidance Note 3 ("GN3") of the ACE Market Listing Requirements of Bursa Securities. It is not disputed that if the ninth defendant remained to be a GN3 Company and failed to secure an approved regularization plan, its shares risked being delisted by Bursa Malaysia Bhd ("Bursa Malaysia") from the official list of the stock exchange.

[3] Dato' Nik Ismail Nik Yusoff is the first defendant. He was, at all material times relevant to the main action, the chairman of the ninth defendant, until the motion to re-elect him as director was withdrawn at the adjourned annual general meeting on 15 January 2016. Mejar Ismail Ahmad, the second defendant, is the present chairman. Dato' Dr Norbik Bashah Idris, the third defendant, resigned as a director on 30 June 2015, but was reappointed on 15 January 2016. The fourth defendant, Mak Siew Wei, an executive director, was appointed executive deputy chairman on 19 January 2016. He also has a substantial shareholding of about 6.19% in the ninth defendant company.

[4] The fifth defendant, Dato' Nasri Nasrun resigned as director on 13 March 2015. The sixth defendant, Teh Chee Hoe was appointed executive director and group chief executive officer on 19 January 2016. The seventh defendant, Chong Khing Chung was appointed a director on 5 February 2016. The eight defendant, Roy Winston George was appointed a director on 13 June 2015 but ceased to be one upon the motion to re-elect him as director, just like for the first defendant, being withdrawn at the adjourned annual general meeting on 15 January 2016. Messrs Baker Tilly Monteiro Heng, the tenth defendant, are the auditors of the ninth defendant company.

Actual Requests In The First And Second Applications

[5] At the outset, I should make it clear that in the First Application, the plaintiff sought an ex-parte order for the appointment of a receiver and manager, and for an ad interim injunction order for an extraordinary general meeting ("EGM") of the ninth defendant company be convened for the shareholders to deliberate on the proposed regularization plan, and to compel the board of directors t