Mahadev Shankar JCA:

This is an appeal from an order of the High Court judge dismissing the appellant's application to rectify the members' register of the first respondent company. We allowed the appeal. Our reasons follow.

Izham bin Omar (Izham) was at all material times the Managing Director of the fifth respondent, Pens Holdings Sdn. Bhd. (Pens) which was the industrial arm and investment company of the Perlis State Economic Development Corporation (SEDC) of which he was the General Manager. Around late 1990 early 1991 Pens identified an Australian Company in the State of Victoria named Transteel Pty. Ltd. (Transteel) as a suitable joint-venture partner to assist in the manufacture of steel and pre-cast concrete structures and to submit tenders for construction jobs in Malaysia and abroad. ('Pty' is the Australian abbreviation for 'Proprietary'.) Transteel was in fact the equivalent of a Sendirian Berhad under Malaysian Company Law. Transteel appears to have been under the control of Alexander Tseberg (Alex) and Andrew Pavloff who were both Directors of Transteel. Alex was also Chairman of Transteel.

On 21 February 1991 a formal Joint Venture Agreement was executed between Transteel and Pens. Francis Kwong Wah Chew (Francis) signed for "Transteel or its nominee" which was the style chosen by Alex and Francis to describe the legal entity proposed as Pens' joint-venture partner. It was envisaged that a joint-venture company would be set up with a capital of RM4 million. Transteel and Pens were to be equal shareholders each with RM2 million shares. Pens was to inject cash and Transteel's contribution was to be substantially in the form of machinery.

Pens instructed agents in Australia to provide a written report on the Transteel Group, which was put up on 14 February 1991. Appeal Record pp. 817-822. The Group had current liabilities of A$850,000. Appeal Record p. 822. Transteel also provided an auctioneer's report dated 2 March 1991 stating that the value of Transteel's machinery was A$766,675. Bills of Lading and Customs Declaration have been put in evidence to show that substantial quantities of machinery (the said machinery) were shipped from Melbourne to Butterworth in May 1991. Appeal Record pp. 868-886. These were moved to Perlis where they were valued by Colliers Jordan Lee and Jaafar for Pens on 17 June 1991 for RM1,304,000.

The vehicle chosen for the joint-venture was a shell-company called Hasrat Klasik (M) Sdn. Bhd. (Hasrat). Hasrat was incorporated on 6 February 1991. On 4 June 1991 Hasrat's name was formally changed to Pens-Transteel Sdn. Bhd. Hasrat and Pens-Transteel are hereafter referred to as "the said company". It would appear that by 14 March 1991 Izham, Harun bin Mahmud, Francis and Alex were the first directors. By the board minutes of that day Appeal Record p. 310 it was resolved to allot each partner 45,000 shares of RM1 each. It was further resolved to allot 1,500,000 shares to each party in three stages on 26 March, 10 April and 30 May 1991 so that each party would hold 2 million shares in the company. Pens was to pay cash. Transteel or nominee was to pay in the value of machinery and equipment supplied to the company.

On 26 March 1991 Alex had incorporated a private limited company in Singapore named Majujaya Holdings Sdn. Bhd. with its registered office in Singapore. (This name is calculated to deceive the unwary because it suggests that the company is a Malaysian company). Alex and somebody called Pow Helen were its directors. The sole shareholder was Everluck Consultant Limited in the British Virgin Islands. The issued share capital were two ordinary shares of one Singapore dollar each. Appeal Record p. 335. It remains to be seen if some tax avoidance scheme was intended.

In a letter dated 22 March 1991 Andrew Pavloff described himself as a Director of Transteel, but the letterhead was of another company called Transteel Australia Pty. Ltd. (Transteel Australia). By this letter he