Yusrin Faidz Yusoff JC:

GROUNDS OF JUDGMENT INTRODUCTION

[1]Shakespeare wrote in Henry IV that “Uneasy lies the head that wears a crown.” The line captures the weight borne by those entrusted with authority and the duty to act for others. In the corporate context, directors and senior officers carry obligations that arise not merely from statute but from conscience and loyalty. Where those obligations are breached, the law intervenes to protect the company and to restore what has been lost through faithless conduct.

[2]This action arises from the deterioration and eventual collapse of Sun Pharmaceutical Sdn Bhd (“Sun Pharma” or “the Plaintiff”), once a profitable distributor of health and nutritional products. In this derivative action applied by its founder Dr Lim Boon Ping, Sun Pharma contends that its business was systematically dismantled by those occupying positions of trust within the company namely Wong Fong Leng (“D1”), Mazuriah binti Abu Darin (“D2”) and Gan Jia Swee (“D3”). The plaintiff seeks declarations of breach, permanent injunctions, compensatory and exemplary damages, and costs.

BACKGROUND FACTS

[3]Sun Pharma was incorporated in 1997 and, from about 2000, held distributorships and National Pharmaceutical Regulatory Agency (NPRA) licences for a portfolio of imported pharmaceutical products supplied by Pharma Nord ApS and Celeste (S) Pte Ltd. The business was profitable up to 2017, when record net profits were recorded.

[4]On or about November 2018 and thereafter, the marriage between Dr Lim Boon Ping and his wife D1 broke down; this led to a sequence of events that resulted in the termination or transfer of distributorships and licences from Sun Pharma to other entities, most notably Sino Health Sdn Bhd (incorporated September 2018) (“Sino Health”) and later Pharma Nord Sdn Bhd (“Pharma Nord”)

[5]The Plaintiff alleges that these developments occurred because of a scheme orchestrated by D1, its director and controlling mind, with the assistance of D2 and D3. Sun Pharma’s distributorships, licences and assets were said to have been diverted through misleading representations to the foreign principals, incomplete disclosure to Dr Lim Boon Ping, and the improper use of Sino Health and Pharma Nord.

[6]Several related proceedings form part of the backdrop to the present suit:

(a)In the Kuala Lumpur High Court Suit No. WA-22NCC-425- 09/2018 (“Suit 425”) filed on 24 September 2018, Dr Lim Boon Ping alleged that D1 forged his signature to transfer 810,000 shares (45% + 5%) out of Sun Pharma and withheld his RM5.5 million share of dividends. A consent judgment was recorded on 9 May 2019 which compelled D1 to restore Dr Lim as registered 50% shareholder of Sun Pharma, and to pay RM5.5 million (his half of the RM11 million dividends) which was to be held by his solicitors as stakeholders pending the matrimonial suit;

(b)On 4 June 2020, the Kuala Lumpur High Court, in Originating Summons No. WA-24NCC-442-08/2019 (“Suit 442”), granted Dr Lim Boon Ping’s application for access to the accounting and corporate records of Sun Pharma. (See: Dr. Lim Boon Ping v Sun Pharmaceutical Sdn Bhd

(c)On 5 October 2020, the Kuala Lumpur High Court, through Originating Summons No. WA-24NCC-337-08/2020 (“Suit 337”), granted Dr Lim Boon Ping leave to commence the present derivative action in the name and for the benefit of the Plaintiff. (See: Dr Lim Boon Ping v Sun Pharmaceutical Sdn Bhd

(d)On 11 September 2020, D1’s attempt to stay the derivative proceedings in Suit 337 pending the disposal of Divorce Petition No. WA-33-41-01/2020 had been dismissed by the High Court. (See: Dato’ Dr Lim Boon Ping v Sun Pharmaceutical Sdn Bhd

(e)On 28 July 2021, D1’s attempt to wind-up Sun Pharma vide Shah Alam High Court Winding-up Petition No. BA-28NCC-197- 04/2021 was dismissed. This decision was subsequently upheld by the Court of Appeal; and

(f)On 21 February 2024, D1 was fined RM50,000.00 for contempt as she refused to obey the inspection order granted by the Co