JUDGEMENT

Gopal Sri Ram FCJ:

[1] This is the judgement of the court.

[2] This appeal concerns a dispute between the shareholders of a company. The appellant's case is that it is the victim of conduct proscribed by s. 181 of the Companies Act 1965 ("the Act"). It unsuccessfully petitioned the High Court for relief under that section. It has now appealed to us. Before we narrate the facts relevant to the dispute, it is necessary to introduce the parties to these proceedings and describe how they are related to each other. Learned counsel for the appellant has put it in the form of a chart which we gratefully produce below.

9th RESPONDENT

MAGNUM

CORPORATION

BERHAD

¯ 62.11%

8th RESPONDENT

MAGNUM

4D

BERHAD

¯ 100%

2nd RESPONDENT

LONG TERM

PROFIT

SDN. BHD.

¯ 67.7125%

PETITIONER

KEJUTAAN

HOLDINGS

SDN. BHD.

®

11.815%

1st RESPONDENT

MAGNUM

4D (PERAK)

SDN. BHD.

11.815%

[3] The appellant is a minority shareholder of Magnum 4D (Perak) Sdn. Bhd., the 1st respondent before us, which is merely a pro-forma party to these proceedings and is not represented. The 2nd respondent is the majority shareholder of the 1st respondent. It in turn is solely controlled by the 8th respondent. The 9th respondent is a majority shareholder of the 8th respondent. There are other minority shareholders in the 1st respondent, but they are not before us. The 4th, 5th, 6th and 7th respondents are directors of the 1st respondent. As for the 10th respondent, it is alleged that he is a shadow director of the 1st respondent. But it must be said at once that no material was placed before the High Court to support that charge and learned counsel for the appellant quite frankly did not pursue the point before us.

[4] The 9th respondent is a public-listed company. It is licensed to conduct gaming business throughout Malaysia. It is authorised to do this through agents. It appoints area agents - usually one area agent for each State. It enters into agreements with these area agents on the conduct of business and in respect of the commissions that they must pay it. The area agents then appoint selling agents and they have agreements with each of them as to the payment of commission. There is a formula. But it is not relevant for present purposes. The 1st respondent is an area agent. It conducts business in the State of Perak. It has an agreement with the 9th respondent. It is dated 21 April 1989 ("the area agency agreement"). Clause 11 of that agreement is important. This is what it says:-

11. Commission

The Area Agent shall, subject to Clause 10, be entitled to retain seventy-three per centum (73%) of the net collection arising from the sale of Four-Digit Numbers Forecast tickets in the Area. The amount so retained by the Area Agent shall be used for the payment of prizes, telecommunications costs, materials provided in connection with the Ticketing Equipment commission of its Selling Agents and remuneration of its employees and all other expenses incurred in respect of the sale and operation of the Four-Digit Numbers Forecast betting in the Area and any balance thereof shall be deemed to be the consideration to the Area Agent for organizing the operation of Four-Digit Numbers Forecast betting in the Area. It is expressly agreed and provided that in the event of the said seventy-three per centum (73%) of the net collections being insufficient to pay the prizes, commissions, remunerations and other expenses of the Area Agent and its Selling Agents then the Area Agent shall pay the deficit sum out of its own funds and bear such loss. The Area Agent shall not be entitled in any event to claim such deficit or loss or any remuneration from the Licensee. The Area Agent shall account to the Licensee for all other monies in excess of the seventy-three (73%) per centum of the net collection arising from the sale of Four-Digit Numbers Forecast tickets.

It is further expressly agreed and provided that the percentage of the collection from the sale of