JUDGMENT

[Enclosure (1)]

I shall dispose of prayer 4 first, which is for an injunction to restrain the second defendant from representing himself as a director or the chairman of the third defendant company or "menjaga urusan dan urusniaga" of the company.

The prayer is against the second defendant. He became a bankrupt on 20 June 1988. At the hearing of this originating summons he was represented by counsel for the Official Assignee in whom his estate was vested. The Official Assignee did not oppose the prayer. There has been [Page 2] no dispute that after he became a bankrupt the second defendant did represent himself in correspondence as chairman or director and continued to take part in the management of the company. In fact, on 10 June 1988, ten days before he became a bankrupt, he was appointed general manager, and after that he continued to act in that office.

Section 125(1) of the Companies Act 1965 prohibits an undischarged bankrupt from acting as director of a company or taking part directly or indirectly in the management of a company except with leave of court. There is therefore a basis for granting prayer 4 unless the second defendant is now no longer a bankrupt.

As to the other prayers, the facts briefly are as follows.

On 8 June 1988 the second defendant informed the company that he wished to transfer his entire shareholding of 366,501 shares in the company to one Ho Kum Chen at 10 sen per share, and that he had received the price of RM36,650. On 9 June 1980 the company approved the transfer.

A few days later, on 20 June 1988, the second defendant was adjudged a bankrupt.

[Page 3]

On 28 February 1989, after the second defendant became a bankrupt, Ho Kum Chen wrote to the company saying that he wished to transfer the 366,501 shares to the first defendant, who is the second defendant's wife, at the same price, and that he had received the price of g RM36,650. On the same date the company approved the transfer.

In submission, learned counsel for the plaintiff said that the ground for all the other prayers is that the transfer to Ho Kum Chen, and therefore that to the first defendant as well, was void because it did not comply with article 34a of the company's articles of association, which article was intended to ensure that shares to be sold were first offered to an existing shareholder.

In my opinion, the plaintiff cannot rely on this ground because that is not the ground relied upon in his affidavit in support of his originating summons. The ground relied on there is contravention of the bankruptcy law. Furthermore, it would appear from exhibit KSK-2 to the plaintiffs said affidavit and exhibit PP-2 to the affidavit of Pang Seng Nyong dated 19 October 1992 that the plaintiff only became a member of the company after the transfers to Ho Kum Chen and the first defendant. There was, therefore, at the time of the transfers, no obligation on the part of the second defendant or anyone else to the plaintiff to observe the provisions [Page 4] of article 34a, and the plaintiff therefore had no locus standi to make the present application on that ground. As sought on that ground, therefore, I refuse those prayers.

As to contravention of the bankruptcy law, which is the ground that is relied on in the plaintiffs said affidavit, his counsel said in submission that it was only for prayer 1, which seeks a declaration that the transfer of the shares by the second defendant for the benefit of the first defendant is void. The declaration will affect the first defendant's interests.

My understanding of the submission of learned counsel for the plaintiff as regards this ground is as follows. The transfer to Ho Kum Chen, although it was done before the bankruptcy of the second defendant, was void because, by virtue of section 47(1) of the Bankruptcy Act 1967, as explained as to its effect in Abu Bakar bin Jaafar & Anor v Malayan Banking Bhd [1991] 2 CLJ (Rep) 247, [1991] 1 CLJ 492, the shares had vested in the Official Assignee at