Gopal Sri Ram JCA:

The appellant is a company that deals in foreign exchange; Forex for short. It acts for customers who speculate on the value of all sorts of currencies. It buys and sells currencies in the money market with a view to profit. It is just like a stockbroker, except that it deals in currencies instead of shares. It has several departments. Each department or desk as it is known in the trade, deals with a range of currencies. A licence is required to carry on the business. And Bank Negara exercises strict control over such activities.

The respondent was, at all material times, employed as a manager of the appellant. His designation was "manager (forex)". He was in charge of the continental currencies and Ringgit desk. Under the terms of his contract of employment, the respondent received a fixed salary as well as a percentage of the profits annually earned by the appellant.

On 21 February 1991, Bank Negara wrote to the appellant stating that with effect from the financial year 1991, money broking companies were not allowed to share their profits with their employees. There then followed an exchange of correspondence between the appellant and Bank Negara of