Ong Chee Kwan JC:

JUDGMENT (NO. 2)Introduction

[1]This judgment, delivered after trial, deals with the claims by the Plaintiff that the 1^st and 2^nd Defendants had breached their duty to the Plaintiff in the sale of certain shares of Turiya Berhad to the 3^rd Defendant following from the Plaintiff’s failure to meet its payment obligations under a banking facility. The shares were securities charged under the banking facility. The Plaintiff contended that the said shares were sold below their fair market price.

[2]The Plaintiff contended that the 4^th Defendant, who was a director of the 2^nd, 3^rd and 5^th Defendants at the material times owed a duty to the Plaintiff and had acted in breach of the same.

[3]The Plaintiff also claimed that the Defendants had conspired to defraud and injure the Plaintiff by their unlawful acts and had acted in breach of the provisions of the Capital Market and Services Act 2007 and the Malaysian Code of Take-Overs and Mergers 2016.

[4]At the end of the Plaintiffs’ case, the Defendants made a common submission of no case to answer and elected not to call any witnesses.

Background facts

[5]The Plaintiff, Empire Holdings Ltd (‘EHL’), is a company incorporated in the Republic of Seychelles, having its registered address at Abacus (Seychelles) Limited, Mont Fleuri, Mahe, Seychelles.

[6]EHL is wholly owned by one Tan Sri Datuk Mohan MK Swami (‘TSM’). EHL previously held 66.67% of the ordinary shares in Turiya Berhad (‘Turiya’), the 5^th Defendant herein (‘EHL’s Turiya Shares’).

[7]The 4^th Defendant, Tunku Dato’ Yaacob Khayra (‘TDYK’) is the Executive Chairman and a Director of the 3^rd Defendant, MAA Group Berhad (‘MAA’).

[8]TDYK was appointed as an independent non-executive director of Ithmaar Bank and Ithmaar Holdings Ltd on 18.4.2019. TDYK was appointed as a non-independent non-executive director of Turiya on 26.11.2019.

[9]Abdullah Taleb holds the position of General Manager in Ithmaar Bank and he is also a non-independent non-executive director in Turiya.

[10]On or about 20.4.2008, EHL and the 1^st Defendant, Ithmaar Development Company Ltd (‘IDC’) entered into a Murabaha Facility Agreement (‘Facility Agreement’), whereby a banking facility was granted by IDC to E HL for a maximum sum of USD 83,000,000.00 (‘the Facility’). The other party to the Facility Agreement was Shamil Bank of Bahrain B.S.C.,which merged with and formed Ithmaar Bank, now known as Ithmaar Bank B.S.C, the 2^nd Defendant herein (‘Ithmaar Bank’) in or around 2016.

[11]The Facility was to finance EHL’s voluntary take-over offers of Turiya (formerly known as Sitt Tatt Berhad) and Chase Perdana Berhad (now known as Chase Perdana Sdn. Bhd.) (‘Take-over Offers’).

[12]Under the terms of the Facility Agreement, EHL was required to repay IDC the sum of USD 99,960,000.00 by the maturity date on 15.4.2019.

[13]The Facility was secured by a Share Charge dated 20.4.2008 and a Charge Supplement dated 28.10.2015 (collectively referred as ‘the Share Charges’) entered into between EHL and IDC whereby EHL:

(a)charged the shares it acquired pursuant to the voluntary Take-Over Offers which included 64.99% or equivalent to 148,651,497 of EHL’s Turiya Shares to IDC (‘the Charged Securities’); and

(b)assigned to IDC all rights, interest and claims (including voting rights) as beneficial owner of the Charged Securities (‘the Assigned Rights’).

[The Charged Securities and Assigned Rights together with the Charged Moneys as defined in the Share Charges are collectively referred as the ‘Charged Assets’]

[14]The Share Charges were entered into and executed as a continuing security for the prompt payment, performance and discharge of the Secured Obligations (as defined in the Share Charges) by EHL, which included the payment of all sums due or owing under or in connection with the Facility Agreement.

[15]Pursuant to Clauses 8.1, 8.2, 8.4 and 8.7 of the Share Charges, IDC is entitled at any time to sell the Charged Securities, without notice to EHL, in the event of breach and or default