Lord Wilberforce J: (delivering the judgment of the Board):

This appeal and cross-appeal are against a judgment of the Federal Court of Malaysia (Appellate Jurisdiction) which allowed in part the respondent's appeal against the judgment of BTH Lee J in the High Court in Borneo. The proceedings were brought by the respondent ("Beng Sung") under s. 181 of the Malaysian Companies Act, 1965 , against the appellant company ("the Company" or "KTS")and the individual appellants "Beng Siew" and "Beng Siong", seeking relief under that section.

The Company is a private company limited by shares which was incorporated on 29 June 1964 under the Sarawak Companies Ordinance, with the main purpose of extracting timber in Sarawak under licences from the Government of Sarawak. Subsequently the Company has expanded its interests into other fields, and other geographical areas.

The authorised share capital of the Company is $3m divided into 30,000 shares of $100 each; (references in this judgment are to Malaysian dollars). At the date of the issue of the Originating Motion, and thereafter, the issued and paid up share capital was $1,360,000 held as follows:

Number of

Names Shares Percentage

Beng Siew ... ... ... 7,582 55.57%

Beng Tuang ... ... ... 1,060 7.79%

Beng Siong ... ... ... 1,060 7.79%

Beng Sung ... ... ... 330 2.43%

Beng Hui ... ... ... 330 2.43%

Beng King ... ... ... 340 2.05%

Others ... ... ... 2,898 21.31%

The first six of these named persons are brothers, being sons of Ling Chui Ming: there has been a separation of interest between the elder three and the younger three, and, at any rate as between Beng Sung on the one hand and Beng Siew and Beng Siong on the other, a degree of hostility and animosity. The above table shows

(i) that Beng Siew himself holds a majority of the issued shares;

(ii) that the interest held by the respondent Beng Sung is 330 shares representing 2.43%

(iii) that there are shareholders representing approximately 34% who have taken no part in these proceedings.

It was claimed by Beng Sung that he was in some sense representative of himself and his two younger brothers - holding in the aggregate 7.36% - but there was no evidence that they supported his action. In any event, there are shareholders representing 21.31 outside the Ling family whose interests must be taken into account when considering what (if any) relief ought to be granted to Beng Sung. As regards the interest of Beng Sung himself, it is material that he acquired his shares in January 1967, i.e. after the Company had been formed by Beng Siew and Beng Siong and after Beng Siew had been granted or assumed management powers. Beng Siew was in fact elected Chairman and Managing Director on 20 January 1965 as from 1 January 1965 and has held these offices ever since. At all material times Beng Tuang and Beng Siong have been Directors. Beng Sung became a Director on 2 February 1967 and remained on the Board until 16 February 1971 when he retired and did not seek re-election. During this period he did not attend any Directors' meetings. At all material times there were Directors of the Company outside the Ling family, from three in 1965 to seven in 1969-1972.

The process leading to the present action started in April 1970 when Beng Sung, then a Director of the Company, wrote to the Company asking for details of donations made by the Company, and other matters as revealed in the Company's accounts. He received no reply.

On 29 September 1970 he applied to the High Court in Borneo under s. 167(5) of the Malaysian Companies Act, 1965 , for an order that the accounting and other records of the Company be open to inspection by an approved company auditor. This application was not opposed by Beng Siew or Beng Siong and on 18 November 1970 Mr Andrew Peattie, a Chartered Accountant, was appointed by the Court to inspect the Company's records on behalf of Beng Sung. Mr Peattie made his inspection in June 1971 and produced a report. On t