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2017 MarsdenLR 2156
HIGH COURT MALAYA JOHOR BAHRU
TAN KHAI LING & ANOR – Appellant
Versus
TRAVELERS TOURS MALAYSIA SDN BHD & ORS – Respondent
[Companies (Winding Up) No: JA-28NCC-144-07-2016]
A company's substratum failure results in a valid ground for winding-up under s 218(1)(i) of the Companies Act 1965.
Headnote:The Court considered the petitioners' application for winding-up pursuant to s 218(1)(i) of the Companies Act 1965, citing the company’s failure to maintain valid operational licenses, thereby failing its substratum. The petitioners claimed oppression of minority shareholders and illegality in operations. However, the Court found that the substratum of the company had indeed failed, justifying the winding-up order. The ruling was primarily based on the legal determination that the substratum, necessary for the business to function legally, was no longer present, as the company had lost its licensing support and was operating illegally.
| Table of Content |
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| 1. failure of a company's substratum can justify winding-up. (Para 1) |
| 2. subsidiary conditions for operating as a licensed entity must be satisfied. (Para 3) |
(1) Subject to ss 194 and 195, no person shall carry out or hold himself out as carrying on a tourism vehicle business except a company which is licensed as a tourism enterprise under the Tourism Industry Act 1992 and which holds a valid licence issued by the Commission under this Chapter in respect of each tourism vehicle used in such tourism vehicle business.
(2) A person may be the holder of two or more licences issued under this Chapter.
(3) Subsection (1) does not apply to the use of any tourism vehicle or class of tourism vehicles as may be prescribed.
(4) Subject to subsection (3), a person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding ten thousand ringgit or to imprisonment for a term not exceeding five years or to both, and in the case of a continuing offence shall, in addition, be liable to a daily fine not exceeding five hundred ringgit for each day during which the offence continues to be committed."
[57] Since it had not been disputed that the only substratum of the company at all material times was to provide licenced coach services which includes hire and drive cars for tourists, the company's failure to obtain the necessary licences under the LPTA therefore renders its operations illegal.
[58] The contention that the petitioners have acquiesced to the continued running of the 1st respondent company's business operation pending the issuance of a valid SPAD licence for vehicles use cannot legitimise what is pursuant to the law, clearly illegal. A similar argument would apply to the knowledge on the part of the petitioner's and their principal. The argument of there being acquiescence on the part of petitioners is therefore irrelevant in the context.
[59] The respondent's contention that the services currently rendered by the 1st respondent company are analogous to "Uber" and that the private vehicles currently for hire are for the purposes of conveying individuals or groups from one destination to the other and not in the capacity as "tourist" as defined under s 2 of the Tourism Industry Act 1992 is untenable.
