Lord Wilberforce J: (delivering the judgment of the Board):

This appeal and cross-appeal are against a judgment of the Federal Court of Malaysia (Appellate Jurisdiction) which allowed in part the respondent's appeal against the judgment of BTH Lee J in the High Court in Borneo. The proceedings were brought by the respondent ("Beng Sung") under s. 181 of the Malaysian Companies Act, 1965 , against the appellant company ("the Company" or "KTS")and the individual appellants "Beng Siew" and "Beng Siong", seeking relief under that section.

The Company is a private company limited by shares which was incorporated on 29 June 1964 under the Sarawak Companies Ordinance, with the main purpose of extracting timber in Sarawak under licences from the Government of Sarawak. Subsequently the Company has expanded its interests into other fields, and other geographical areas.

The authorised share capital of the Company is $3m divided into 30,000 shares of $100 each; (references in this judgment are to Malaysian dollars). At the date of the issue of the Originating Motion, and thereafter, the issued and paid up share capital was $1,360,000 held as follows:

Number of

Names Shares Per