An award of damages can be made under Section 181 CA when linked to oppression claims; however, damages were improperly awarded for mismanagement without established grounds of oppression.

[1] These two related appeals arose from the s 181 (of the Companies Act 1965 ("CA")) petition of petitioners 1-8 (hereinafter referred to as petitioners, as enumerated in the petition) who, collectively held, either directly or indirectly, a total of 867,500 shares or 21.6875% of the equity of CIN Holdings Sdn Bhd (9th petitioner), where the trial court entered judgment for the petitioners and granted the reliefs sought against the respondents (hereinafter referred to as respondents, as enumerated in the petition) who collectively held 74.5625% of the equity of CIN Holdings Sdn Bhd (CH).

[2] In the course of arguments, both parties agreed to proceed with only Appeal 02-84-12, the result of which, both parties further agreed, would bind Appeal 02-83-12. We need therefore only to relate that leave was granted to the appellant (1st respondent) in Appeal 02-84-12 to appeal against the order of the court of Appeal in respect of the matter decided by the trial court in the exercise of its original jurisdiction, on one question of law, namely:

"Whether an award of damages can be made in a petition under s 181(1) of the Companies Act 1965 ."

[3] The pertinent background facts are the following. CH, which was incorporated on 10 September 1983, was an investment company, held shares in public listed companies, including 1,346,100 shares (polymate shares) in the capital of Polymate Holdings Berhad, a company listed on the second Board of the Kuala Lumpur Stock Exchange. At the time of presentation of the petition dated 13 September 2003, the appellant, his wife (2nd respondent) and one Kivy Holdings Sdn Bhd (3rd respondent) which the appellant controlled, collectively held 49.25% of the equity of CH. The rest of the respondents collectively held 25.3125% of the equity of CH. The balance 3.75% equity was held by a shareholder who was not a party in the proceeding. The appellant, who was the managing director of CH from October 1983 to 2 May 2002, was primarily responsible for the financial management of CH.

[4] On 31 October 2001, the board of CH appointed an ad hoc committee to investigate its accounts. On or about 27 June 2002, the ad hoc committee reported,inter alia, that the appellant had disposed of the property of CH, namely 446,100 polymate shares, without the authority of the board or members of CH. The ad hoc committee also reported that the appellant had committed irregular financial transactions during his tenure as the Managing Director. Petitioners 1, 3 and 4 reported those financial irregularities to the police. On 2 October 2002, the board of CH appointed external auditors to conduct a special audit of the accounts of CH for the years ended 31 December 1997 to 30 September 2001, and to review the report of the ad hoc committee. The external auditors upheld the report of the ad hoc committee and valued the net tangible asset of CH, as at 30 September 2002, as being of worth RM4.2353 per share, it being inclusive of the value of the 446,100 polymate shares.

[5] The trial court found that the petitioners had proved the alleged irregular financial transactions (see p 8