Zaki Tun Azmi CJ:

[1] The dispute in this appeal is whether the respondent is obliged to refund RM1 million paid as a deposit to the respondent by the appellant for the purchase of all RM5 million worth of respondent's shares in Jernih Karya Sdn Bhd ("Jernih Karya") pursuant to a Letter of Undertaking dated 24 June 1997 ("Letter of Undertaking") with certain conditions as will be explained later. If the answer is in the negative, the appellant will then have to pay the balance of RM4 million to the respondent, since RM1 million had been previously paid.

[2] Sometime around June 1997, the Ministry of Finance ("MOF") approved the establishment of a securities broking firm known as First Securitites Sdn Bhd ("First Securities") pursuant to s 12 of the then Securities Industries Act 1983 [1]. First Securities shall be a holder of a dealer's licence to carry on business as a securities broking firm and it shall be wholly owned by Dioncorp Sdn Bhd. Dioncorp Sdn Bhd in due course shall apply to be a member company of the then Kuala Lumpur Stock Exchange (now known as Bursa Malaysia).

[3] With the approval of the MOF, Yayasan Bumiputra Sabah held 51% of the equity in Dioncorp Sdn Bhd