A private cause of action under the SC Act exists only after a ruling from the Securities Commission.

Introduction

[1] This is an appeal by the Appellant/Plaintiff against the decision of the High COURT, Kuala Lumpur in which the learned Judge dismissed the Appellant's claims for an order that the Respondents/Defendants jointly and severally make a Mandatory Take-Over Offer to all shareholders of Naluri Berhad (except Danaharta) at an offer price of RM1.98 per ordinary share as per the terms set out in the Securities Commission Act 1993 and the Take-Over Code.

[2] We heard the appeal on 2 July 2015 and reserved our decision to consider the submissions of respective counsel. We have since done that and now give our decision together with grounds.

[3] For ease of reference, the Appellant shall be referred to as the Plaintiff, the 1st Respondent as the 1st Defendant and the 2nd Respondent as the 2nd Defendant.

Background facts

[4] Naluri Berhad (Naluri) was a public listed company with an authorized capital of RM2,000,000,000.00. The fully paid and issued share capital was RM690,516,320.00 of which Pengurusan Danaharta Naisonal Berhad (Danaharta) had a charge on 309,648,000 shares which amounted to 44.84% of the Naluri issued and paid up capital (Naluri pledged shares).

[5] At this juncture, it would be appropriate to say a few words on the nature of Danaharta's powers. It is a public company incorporated under the Companies Act 1965 with the ownership vested in the Minister of Finance Incorporated. It was established by the Federal Government with the predominant purpose of acting as an asset management company and to acquire, manage, finance and dispose of assets and liabilities from distressed companies. To facilitate the achievement of that purpose, Danaharta is given two special powers:

(1) to buy assets through statutory vesting,

(2) to, if deem necessary, appoint special administrator to manage the affairs of distressed companies.

[6] In view of the financial position of Naluri, Danaharta on 23 December 2002 appointed Special Administrators (the SAs) of Naluri pursuant to the provisions of the Pengurusan Danaharta Nasional Berhad Act 1998 (Danaharta Act).

[7] On 18 April 2003, the then Kuala Lumpur Stock Exchange (KLSE) issued a notice to Naluri informing the same that its level of operation did not meet the level of operation as required under Practice Note 10/2001 of the Listing Requirements of KLSE. Such failure if not remedied could result in Naluri's shares being suspended and subsequently delisted from the KLSE.

[8] To deal with the aforesaid notice, the SAs proposed that Naluri enter into various corporate exercises and as part of that exercise was the sale of shares of Naluri. That sale was by way of a tender exercise and it was done under the following conditions:

(a) interested parties were invited to submit offers to acquire a block of shares (the "Shares") representing approximately 44.84% of the issued and paid up capital of Naluri based on Naluri's existing share capital (excluding conversion of any warrants issued by Naluri and which remain outstanding). The Shares currently consisted of 309,648,000 ordinary shares of RM1.00 each in Naluri. The principal terms and conditions of the sale by tender were contained in Terms of Reference available from Danaharta;

(b) Naluri was listed on the Main Board of the KLSE. On 23 December 2002, the SAs of Naluri were appointed in accordance with the Danaharta Act. On 18 April 2003, Naluri announced that:-

(i) the SAs had decided that it was in the best interest of all stakeholders of Naluri for Naluri to proceed with a capital repayment (the "Proposed Capital Repayment") of at least RM 690,516,320 on the basis of RM1.00 for each existing share in Naluri; and

(ii) N