PEMPETISYEN Eldarius Yong Zhen Jie for the Petitioner [Messrs Chellam Wong] Sara Idylla binti Isbah for the Respondent [Messrs Ahmad Rizal, Sara Idylla & Co.]

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE STATE OF WILAYAH PERSEKUTUAN, MALAYSIA (COMMERCIAL DIVISION) COMPANIES WINDING-UP PETITION NO.: WA-28NCC-229-03/2022 In the matter of Section 465(h) and (k) of the Companies Act 2016 AND In the matter of APPSMITHS SDN BHD (Company No.: 201601034047 (1204988-X) BETWEEN JASON KOK CHIN HWA (NRIC No.: 900210-14-6387) ...PETITIONER AND APPSMITHS SDN BHD (Company No.: 201601034047)(1204988-X) …RESPONDENT JUDGMENT (Enclosure 2) Petition 1. In the Winding Up Petition dated 23.3.2022 in enclosure 2 (“Petition”), the Petitioner had pursuant to section 465(h) and (k) of the 1 Companies Act 2016 applied to wind up the Respondent (“Company”). 2. The Petition states inter alia that: (a) The Respondent is a private limited company incorporated on 13.10.2016 under the laws of Malaysia, with its nature of business being to carry on, establish, organize, manage, promote, develop, operate oilfield services, production optimization, flow assurance, digital oilfield integration and software development and any other related services; (b) The Respondent has a paid-up capital of RM300,000.00 divided into 300,000 ordinary shares of RM1 each which are fully credited as paid up in cash. The shares are held by the following: i. Jason Kok Chin Hwa : 30,000 shares (10%); ii. Mohd Zulfadly bin Zakaria : 90,000 shares (30%); iii. Noorul Haq bin Zainaldin: 90,000 shares (30%); and iv. Well Integrity Services Ltd (Company No.129,739) : 90,000 shares (30%). (c) Well Integrity Services Ltd (Company No.: 129,739) (“WIS”) is a company incorporated in the country of Belize on 29.1.2013 with Larry Michael Peacorck (“Larry”) and Daniel Kenneth Dees (“Daniel”) being its directors and APPSMITHS WELLTRACER LLC being its sole shareholders. Larry and Daniel are the controlling shareholders of APPSMITHS WELLTRACER LLC; 2 (d) At the time of incorporation of the Respondent, the directors and shareholders of the Respondent were as follows: No. Directors/Shareholders Shareholdings 1. Mohd Faiz bin Hassan (“Faiz”) 35,000 2. Nurul Allydin binti Yemsi (:Allydia”) 35,000 3. Khong Kheng Ting (“Khong”) 30,000 (e) In or around May 2017, the Respondent was taken over by WIS with the shares of the former directors and shareholders transferred in the following manner: No. Transferor Directors/Shareholders Resulting Shareholding 1. Faiz Mohd Zulfadly bin Zakaria 35,000 2. Allydia Mohd Zulfadly bin Zakaria (“Zulfadly”) 35,000 3. Khong WIS 30,000 (f) Since the incorporation of the Respondent, the Respondent has been involved in the oil and gas industry with Petroleum Nasional Berhad (“Petronas”) being its anchor client. (g) At the material time of the acquisition of the Respondent from the former shareholders in 2017, it was always the aim of WIS, Daniel and Larry to retain majority shareholdings and control of the Respondent. To that end and under the advice of one Noorul Haq bin Zainaldin of Haq & Associates Law Offices (“Haq”), WIS had executed a Trust Deed dated 21.4.2017 (“the Trust Structure”) with Zulfadly with WIS being the Beneficiary thereunder and the following terms being salient: 3 Clause Contents 1(a) The Trustee hereby declare that it holds the Trust Shares representing Seventy Percent (70%) of the entire Share Capital of AppSmiths Sdn Bhd and all dividends and interest accrued or to be accrued upon the same or any of them upon trust for the Beneficiary and agrees to transfer pay and deal with the Trust Shares and the dividends and interest payable in respect of the same in such a manner as the Beneficiary shall from time to time direct. 1(b) The Trustee will at the request fo the Beneficiary or its successors in title represent the Beneficiary at all meetings of shareholders of otherwise which he shall be entitle to attend by virtue of being the registered proprietor of the Trust Share or any of them and will vote at every such meeting in such manner as the Beneficiary shall have previously directed orally or in writing and in default of an subject to any such direction of the Trustee ad further will if so required by the Beneficiary or its successors in title execute all proxies or other documents which shall be necessary or properly to enable the Beneficiary, its assigns or nominee to vote at any such meeting in place of the Trustees. 7 The Trustee shall upon the execution of this Trust Deed execute a blank Transfer form in respect of the Trust Shares and deliver the same to the Beneficiary to be dealt with by the Beneficiary in such manner as he may from time to time deem fit. 8 The Trustee hereby agrees that the original shares certificate (s) in respect of the trust Shares shall at all time be held in the possession and as he may from time to time deem fit and the Trustee hereby covenants to deliver the same to the beneficiary in the event that the same shall have come to the Trustee’s possession. Pending the delivery of the said share certificate(s) to the Beneficiary, the Trustee shall hold the said share certificate in trust for and on behalf of the Beneficiary. 9 The Trustee hereby confirms and agrees to do and execute or cause to be executed any document for the transfer and conveyance of the Trust Shares and all right whatsoever as 4 aforesaid derived the form and/or any other securities relating thereto in such manner as the Beneficiary may from time to time direct or request (h) It is therefore stated that at all material times, Zulfadly was merely a nominee shareholder appointed by WIS, with the Daniel and Larry being the ultimate controller and 100% holder of the shares of the Respondent in 2017. (i) In or about April 2017, the Petitioner was appointed as the director of the Respondent and in June 2017, the Petitioner was made managing director of the Respondent. Due to the performance of the Petitioner as managing director of the Respondent, the Petitioner was given 30,000 shares of the Respondent as performance bonus on 21.12.2017. (j) To enable a smoother operation in Malaysia, Daniel and Larry had caused also the appointment of the Petitioner as a director ow WIS. At or around December 2017 also, the Respondent had issued further capital and had appointed one Nor Suhaila Abd Razak (“Suhaila”) as a nominee shareholder shareholder. The following parties were then given shares to hold, also on behalf of WIS, resulting in the following apportionment: No. Shareholders Amount of Shares Issue Resulting Shareholding 1. Zulfadly 20,000 90,000=30% 2. Suhaila 90,000 90,000=30% 3. WIS 60,000 90,000=30% 5 (k) Upon the appointment of the Petitioner as a director of WIS, Daniel and Larry, being the ultimate shareholder and beneficiary of 90% of the shares in the Respondent and under the advice of Haq, instructed the Petitioner to execute on behalf of WIS two Trust Deed dated 19.3.2-18 with Suhaila and Zulfadly respectively (“the 2018 Trust Deeds”). (l) At the time of executing the 2018 Trust Deeds, Suhaila was also required to execute an undated share transfer form. (m) On 13.2021, Larry affirmed an affidavit (“the Affidavit”) confirming the Trust Structure and also the 90% majority shareholding of the Respondent by WIS. Larry had also sworn on affidavit that together with Daniel, they are the ultimate controller and beneficiary of all those shares, dividends and interests on all those 90% of shares of the Respondent through WIS. (n) The Trust Structure was introduced into the Respondent for the sole purpose of having bumiputera ownership, on paper and in official documents to enable the Respondent to obtain lies to conduct business with Petronas. (o) Under the pretense of its bumiputera majority shareholding, the Respondent had applied and obtained for license under service / supplier code SC3060104 and SP2280200 from Petronas for the period of 24.3.2020 and that under the respective supplier code, the Respondent was required to have 30% bumiputera shareholding. 6 (p) The Respondent’s’ license was subsequently renewed under supplier code SC3060104 and obtained the renewal for the period of 24.3.2020 to 23.3.3023. At the material time, during the application for the license and its renewal, the Respondent had declared to Petronas that it is a bumiputera majority company. Such declaration was made in its application to Petronas while the Trust Structure was in effect through the 2018 Trust Deeds. (q) With the Petronas License, the Respondent had obtained award of the Contract No.: CHO/2017/GTD/1015 dated 26.9.2017 (“the Contract”). The Contract was for a period of 5 years with a none year extension option and the Respondent remains as a contractor to Petronas. (r) At the material time, under the advice of the Respondent’s solicitor, Haq, the Petitioner was unaware that the Trust Structure is illegal and contrary to the public policies of Malaysia. (s) However, on or around June and December 2021, the Petitioner came across news regarding Aker Engineering Malaysia Sdn Bhd, Aker solution APAC Sdn Bhd and Aker Solutions Malaysia Sdn Bhd, where it was shown therein that the utilization of nominee shareholders is illegal and potentially a criminal offence. (t) On or around August 2020, Haw as the solicitor who advised for the illegal Trust Structure was appointed as director of the Respondent. Subsequently, without notice to any of the shareholders, Suhaila’s shares were transferred over to Haq on 7 13.10.2021 and it is believed that the same Trust Structure is being utilized to further this illegal business. (u) Immediately thereupon, the Petitioner obtained legal advice from his solicitors and reported the Trust Structure to CCM. On 7.10.2021, the Petitioner receive acknowledgement of the complaint from CCM and as at 9.2.2022, CCM is still investigating the complaint. (v) The Petitioner had in or around 19.11.2021 reported the same to Petronas. (w) Petronas had on 24.11.2021 responded to the Petitioner on his complaint. On 10.3.2022, the Respondent had received a call from Petronas and it was informed that Petronas shall continue its investigation into the complaint. (x) Being a minority shareholder and contributory of the Respondent, the Petitioner does not wish to be involved in the illegal Trust Structure. Further thereto, the Respondent had on or around November made the declaration to CCM that WQIS maintains voting right and control over 90% of the shares of the Respondent. The illegal Trust Structure remains in effect to date. (y) Premised thereon, it is just an equitable for the Respondent to be wound up on ground of illegality and breach of public policy Findings of this Court 8 3. As the initial Preliminary Objection (PO) raised by the Petitioner that the deponent in enclosure 30 was not in Malaysia when executing the Affidavit thereto appears to have been abandoned, this Court will no longer address the said PO. Locus 4. What is in contention is firstly whether the Petitioner has the locus to commence the Petition based on section 465(h) and (k) of the Companies Act 2016 which provides : “(1) The Court may order the winding up if: h) the Court is of the opinion that it is just and equitable that the company be wound up; (k) the company is being used for unlawful purposes or any purpose prejudicial to or incompatible with peace, welfare, security, public interest, public order, good order or morality in Malaysia; 5. Pursuant to Section 465(2) of the Companies Act 2016 it is stated that:- (2) For the purpose of winding up actions commenced by the Registrar under paragraph (1)(k), the finding of the Registrar that a company is being used for unlawful purposes or any purpose prejudicial to national security or public interest or incompatible with peace, welfare, public order, security, good order or morality in Malaysia shall in all Courts and by all 9 persons having power to take evidence for the purposes of this act, be received as prima facie evidence until proven otherwise. 6. In my reading of the above said sections, I find that the right to commence a winding up petition under section 465(h) and (k) of the Companies Act 2016 is not limited to only the Registrar of Companies as section 465(2) of the Companies Act 2016 when read as a whole is not a prohibition on any party other than a Registrar to commence such a Petition but that section 465(2) of the Companies Act 2016 was meant to expressly provide that the finding of the Registrar therein as to the company being used for any unlawful purposes or any purpose prejudicial to national security or public interest or incompatible with peace, welfare, public order, security, good order or morality in Malaysia is to be received as prima facie evidence until proven otherwise Delay 7. I will next deal with the Respondent’s submission that the inordinate delay in filing the Petition is fatal. From the facts before me, there appears to be a 10 months delay in the filing of the Petition from the date the Petitioner allegedly obtained legal advice from his lawyer on the legality of the Trust Deeds. 8. Although I have read the case of Re Senson Auto Supplies Sdn Bhd [1988] 1 MLJ 326 provided by the learned counsel for the Company, I find that the delay of 10 months referred to herein after realizing the legality of the Trust Deeds is not an inordinate delay as 10 I hold firstly that any delay will not cure an illegality and/or secondly on the ground that any alleged delay should not be used to obstruct an application to declare such illegality if it is found to exist herein as any illegality will not only go to the root of the matters complained of but also will have the effect, if proven, of making any transactions pursuant to such illegality therein, void ab initio. Trust Deeds & Petronas Licence 9. The next issue to be decided is whether the Trust Deeds executed on 19.3.2018 are illegal. The said Trust Deeds, as seen in Annexure G of the Petition were executed by Mohd Zulfadly bin Zakaria (Zulfadly) as trustee and WIS as beneficiary and the other by Nor Suhaila binti Abdul Razak (Nor) as the Trustee as the Beneficiary respectively whereby inter alia MS and Nor as the respective trustees declared that both Zulfadly and Nor respectively held 30% of the entire share capital each in the Company upon trust for WIS. 10. It is also in evidence, at Annexure 2 of enclosure 2, that the Company was set up on 13.10.2016 and that its shareholders are currently: the Petitioner 30,000 shares (10%) MS 90,000 shares (30%) Noorul Haq bin Zainadin 90,000 shares (30%) WIS 90,000 shares (30%) 11 11. I also find in evidence that : (a) the Company had applied for and obtained a license under service / supplier codes SC3060104 and SP22802000 from Petronas for the period 24.3.2017 to 23.3.2020 (Original Licence) as shown in Annexure I of enclosure 3 and that there has been a renewal of the license from 24.3.2020 to 23.3.2023 as seen in Annexure J of enclosure 3; (b) when the Original Licence was first obtained from Petronas, the original shareholders of the Company at that time were Mohd Faiz bin Hasan (Faiz) and Nurul Allidya binti Yemsi (Nurul) and Khong Kheng Ting (Khong); (c) the Original Licence was transferred together with the purchase of shares; (d) The Trust Deed was to fully and effectively protect and safeguard the intellectual property and technology of the Appsmith group of companies which was entrusted to the Company and which was offered by the Company as stated by the Company in its affidavit in reply at enclosure 30 which I find was not credibly denied by the Petitioner; and (e) exhibit ASB 47 enc 35 pg 31-42 is a Declaration of Beneficial Owners/Trustee made by the Company’s directors wherein the Company has declared the actual beneficial shareholding in the Company. 12 12. It is also before this Court that a Contract has been awarded to the Company by Petronas vide contract No. CHO/2017/GTD/1015 dated 26.9.2017 as exhibited in Annexure K of enclosure 3. 13. In Tan Keen Keong @ Tan Kean Keong v Tan Eng Hong Paper & Stationery Sdn Bhd & Ors and other appeals [2021] 3 MLJ 914, the Federal Court had held: “[53] But, for now, there is also another critical factor which appears to have been overlooked by the learned judge, and that is before striking down agreements, voiding arrangements or winding up corporations, the court must be satisfied that the illegality or the contraventions of law is related to or bear sufficient nexus to the activities or business of the company and/or for which the company was incorporated (emphasis mine). Not all breaches of statutory requirements resound in winding up a company even if the breach attracts criminal sanctions; otherwise there will be chaos in commerce and business. This was [2021] 3 MLJ 914 at 943cautioned by the Supreme Court in Beca (Malaysia) Sdn Bhd v Tan Choong Kuang & Anor [1986] 1 MLJ 390; [1986] CLJ Rep 64, that ‘Not every breach of a statutory prohibition would render an agreement illegal or void though such breach may attract criminal penalty’. [54] The relevant statute complained of must be carefully examined, its purpose or object determined, before the court can conclude one way or another if the contract, act or deed in question is invalidated by such contravention. …. [57] We, too, agree that this trio of considerations — the purpose of the statute; whether any other policy may be undermined or 13 disaffected and the need to exercise some measure of restraint, is necessary and should always be weighed before striking down commercial contracts or as in the case of these [2021] 3 MLJ 914 at 945appeals, winding up of corporations on the ground of illegality even if there are criminal penalties involved in the contraventions. After all, we are in the area of public policy, a term which is not statutorily defined under the Companies Act 1965 or even the Contracts Act 1950. These tests are amply illustrated in Liputan Simfoni. Citing Lori (M) Bhd (Interim Receiver) v Arab- Malaysian Finance Bhd [1999] 3 MLJ 81; [1999] 2 CLJ 997; and Co-operative Central Bank Ltd (in receivership) v Feyen Development Sdn Bhd [1995] 3 MLJ 313; [1995] 4 CLJ 300, the Federal Court added that case law ‘seems to suggest that the courts should be slow to find illegality and strike down commercial transactions’. See also Tekun Nasional v Plenitude Drive (M) Sdn Bhd and other appeals [2018] 4 MLJ 567, applying Lori, Co- operative Central Bank Ltd (in receivership) v Feyen Development Sdn Bhd and the High Court of Australia’s decision in Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410. … [71] This approach of examining the object or purpose of the relevant legislation before invalidating an agreement or arrangement is not new. As seen from Liputan Simfoni; it was already applied in Kin Nam and even earlier in Beca (M) Sdn Bhd. Beca is yet another authority of how the intent of legislation needs to be carefully examined before ruling on the issue of illegality ……… 14 [92] The just and equitable jurisdiction must be exercised carefully and judiciously, with special regard for the irreversible and drastic nature of a winding up as a court-ordered remedy (see Perennial (Capitol) Pte Ltd and another v Capitol Investment Holdings Pte Ltd and other appeals [2018] 1 SLR 763). Not only are there more moderate remedies available, the purported wrongs under the Income Tax Act 1967 have been addressed and dealt with by the relevant authorities; and where they have not, to be dealt with by those charged with the necessary jurisdiction; or as far as the petitioner is concerned, for him, as a minority shareholder in both TEH Holdings and TEH Paper, to file an action under s 181 of the Companies Act 1965 since the learned judge found that his real complaint was of oppression and that he actually wanted his shares bought out. 14. Thus, following the authority of Tan Keen Keong @ Tan Kean Keong (supra), in the context of whether the Trust Deeds and/or the incorporation of the Company are illegal and therefore a contravention of public policy of law such that the Company should be wound up; the main question which this Court has to determine is whether “the illegality or the contraventions of law is related to or bear sufficient nexus to the activities or business of the company and/or for which the company was incorporated” 15. From the evidence before me, it is clear that when the license under service / supplier codes SC3060104 and SP22802000 from Petronas for the period 24.3.2017 to 23.3.2020 was obtained, the Trust Deeds were not yet in existence. 15 16. It is also in evidence that Petronas has, despite having knowledge of the arrangements in the Trust Deed due to the audit conducted by Petronas as seen in exhibit ASB-38 in enclosure 34, made no finding or decision of any irregularity or breach of any law or policy of Petronas in relation to the Company’s shareholding and/or beneficial ownership. 17. From the above, I hold that the Company has made full disclosure to Petronas of its shareholdings and/or beneficial ownership and I find that Petronas had confirmed knowledge of the said facts when Petronas had stated / remarked in the said exhibit ASB-38 in enclosure 34 that: “Whilst the BO (Beneficial Ownership) for the other 10% shares is Jason Kok Chin Hwa. As informed by Mohd Zulfadly has not paid the ownership of the share currently (currently under dispute)” 18. As to whether the Trust Deeds contravenes section 7 of the Petroleum Development Act 1974, Regulation 3 and 5 of the Petroleum Regulation 1974, I have since examined the said Petroleum Development Act 1974 and the Petroleum Regulation 1974 of which the pertinent sections, in my view, are as follows: Section 2 Petroleum Development Act 1974 (1) The entire ownership in, and the exclusive rights, powers, liberties and privileges of exploring, exploiting, winning and obtaining petroleum whether onshore or offshore of Malaysia shall be vested in 16 a Corporation to be incorporated under the Companies Act 1965, or under the law relating to incorporation of companies. Section 3 Petroleum Development Act 1974 (1) Notwithstanding section 22 of the Companies act 1965, relating to the names of companies, the Corporation shall be styled as the Petroliam Nasional Berhad or in short form PETRONAS. (2) The Corporation shall be subject to the control and direction of the Prime Minister who may from time to time issue such direction as he may deem fit. (3) Notwithstanding the provisions of the Companies act1965 or any other written law to the contrary, the direction so issued shall be binding on the Corporation. Section 7 of the Petroleum Development Act 1974 The Prime Minister may make regulations for the purpose of carrying into effect the provisions of this act and, without prejudice to the generality of the foregoing, such regulations may, in particular, provide for- (a) the conduct of or the carrying on of - (i) any business or service relating to the exploration, exploitation, winning or obtaining of petroleum; (ii) any business involving the manufacture and supply of equipment used in the petroleum industry; (iii) downstream activities and development relating to petroleum; 17 (b) the marketing and distribution of petroleum and its products; (c) penalties in the form of a fine not exceeding one hundred thousand ringgit or imprisonment not exceeding five years or both for breach of any of the regulations and for non-compliance with any term or condition of any licence, permission or approval issued or granted under the regulations; (d) the forfeiture of anything used or intended to be used in the commission of any such breach or non-compliance. Regulation 3 and 5 of the Petroleum Regulation 1974 The following applications for a licence shall be made to the President of PETRONAS: (a) a licence to commence or continue any business or service, onshore or offshore relating to the exploration, exploitation, winning and obtaining of petroleum and, in particular involving the supply and use of rigs, derricks, ocean tankers and barges; (b) a licence to commence or continue any business or service involving the supply of equipment and facilities and services required in connection with the exploration, exploitation, winning and obtaining of petroleum including the following: (i) survey and exploration services; (ii) all engineering, technical and consultancy services involved in exploration, drilling and production of crude oil and natural gas; (iii) all engineering, construction and maintenance works connected with upstream activities; (iv) rigs and drilling services; 18 (v) supplies of all exploration, drilling and production materials, equipments, platforms, derricks, tools and installations, pipe and pipe-laying services, barges and tankers; (iv) supply of general services connected with upstream operations. Regulation 5 of the Petroleum Regulation 1974 (1) The Chairman and Chief Executive of PETRONAS shall process applications made to them under regulation 3 and shall thereafter forward them to the Prime Minister who shall reject or approve such applications. (1A) The Secretary-General, Ministry of International Trade and Industry and the Secretary General, Ministry of Internal Trade and Consumer Affairs shall process applications made to them under regulations 3A (1) and (2), as the case may be and shall thereafter forward them to the Prime Minister who shall reject or approve such applications. (1AA) Permission and licences granted in pursuance of the applications made under sub-regulations (1) and (IA) shall be subject to the payment of fees as specified in the Schedule hereto. (2) Without prejudice to the generality of the foregoing the said conditions may relate to any of the following: (i) royalties, bonuses, levies or other such payments; (ii) fees as specified in the Schedule hereto; (iii) work and investment programme; (iv) method of working; (v) inspection of worksite and plant; 19 (vi) employment and training; (vii)report of discovery and production of petroleum; (viii) submission of all data, information and records connected in any survey or research; (ix) volume of production; (x) quality; (xi) fixing of prices; (xii) keeping and inspection of records including books of account; (xiii) distribution, marketing, including the appointment of retailers, and export; (xiv) purchase of petroleum, petroleum products and petrochemical products from overseas or locally; (xv) option to purchase petroleum; and (xvi) right of preemption. 19. This Court was also referred to by counsel for the Petitioner to the Petronas Licence General Conditions No.14 and section 3.3 of the Petronas Licence and General Guideline (Petronas Guidelines) which read: Petronas Licence General Conditions No.14 14. This License may be revoked, suspended or blacklisted at any time if any of the above conditions, general conditions of PETRONAS license and registration and any other conditions set in PETRONAS License and Registration General Guidelines are not fulfilled. Section 3.3 of the Petronas Licence and General Guideline “Company must comply with the respective SWEC’s requirements below:- 20 3.3.1 Meet minimum Bumiputera requirement at levels, for the applied SWEC: • Equity • Board of Directors • Management • Employees The SWEC’s minimum Bumiputera requirements range from 100%, 51% and 30%. There are also SWECs with no requirement of Bumputera participation.” 20. It was thus submitted by learned counsel for the Petitioner that this Court cannot allow the Company to run foul of the Petronas Regulations which has the force of law, and relied on the Federal Court case of Nabors Drilling (Labuan) Corporation v Lembaga Perkhidmatan Kewangan Labuan [2020] 10 CLJ 732 , to support this proposition which case concerned an appeal on a judicial review application on the issue of whether a subsequent licence to the appellant therein to undertake a leasing business in Labuan which was done without the approval of the respondent and without payment of the requisite fees pursuant to Paragraph 8.2 of the 2013 Guidelines on the Establishment and Operations of Labuan Leasing Business was contrary to and ultra vires of Section 7(6) of the Labuan Companies Act 1990 and the question of whether the guidelines issued by the respondent therein under section. 4A of the Financial Service Authority Act 1996 do not have the force of law for it serves only to clarify the requirements under the Financial Services and Securities Act; which the Federal Court found to have the force of law. 21 21. I have since also read FMC Petroleum Equipment (Malaysia) Sdn Bhd v FMC Wellhead Equipment Sdn Bhd & Anor [2019] 1 LNS 758 which was referred to this Court by learned counsel for the Petitioner and which concerned a statutory derivative action governed by sections 347-350 of the Companies Act 2016, wherein an action was initiated by the Plaintiff therein was premised upon the winding up petition commenced by the 2nd Defendant in the winding up Court where it was undisputed that the Plaintiff was the main opposing party in the winding up petition and that in the winding up petition, the dispute was between two main factions of contributories of the 1st Defendant in the forms of the Plaintiff and the 2nd Defendant making the 1st Defendant as only a nominal Respondent. It was also a finding of fact in that case that the structure of the 1st Defendant is contended not to be for a genuine commercial purpose where it was found that the 1stDefendant was incorporated and maintained a license to supply products and services to exploration and oil and gas companies in Malaysia, issued under provisions of the Petroleum Development Act 1974 and Petroleum Regulations 1974 as well as that there was the Trust Arrangement set up where Wan Ariff b. Wan Hamzah was offered the 30% equity in the 1st Defendant by the FMC Corporation which was then held by Antah Oiltools Sdn Bhd, a Bumiputera company and in para 15 of the petition, it is stated that the FMC Corporation which then held the remaining 70% of the issued and paid up capital of the 1st Defendant was named as the Beneficiary under the Trust Deed provided that Wan Ariff Wan Hamzah as trustee must inter alia promptly and fully account to the Beneficiary for all dividends, distributions, bonuses, interest, property (including, but not limited to, shares issued under a bonus or rights 22 issue) and other distributions and benefits received in respect of the shares. 22. Subsequently, in FMC Petroleum Equipment (Malaysia) Sdn Bhd (supra), Justice Noorin Badaruddin than found that: [51] It cannot be disputed that all those facts point to what is called an "Ali Baba" structure and that is why the 2nd Defendant as the Bumiputera party is saying that they want to be out of the structure as they are not permitted by reason of the terms of the 2001 Agreements, to participate either in the profits or in the management of the 1st Defendant. Whether or not the Court of Appeal agrees that all those matters should be decided in an arbitration or the winding up Court, this Court is of the considered view that the 1st Defendant will not be able to function forward because the Bumiputera party is not willing to carry on with this association and authorities have shown that in such circumstances, the outcome will be a winding up. 23. With respect, I find that FMC Petroleum Equipment (Malaysia) Sdn Bhd (supra) is not applicable before me as the matter concerned the right to an issue of a derivate action and that the facts therein defers from the matter before me for the reasons which I have or will refer to herein. 24. Thus, after reading Nabors Drilling (Labuan) Corporation (supra) and FMC Petroleum Equipment (Malaysia) Sdn Bhd (supra), it is my decision that as there is currently no authority on the point that the Petronas Regulations have the force of law as well as no 23 application for a judicial review of the same being made herein, this Court declines to make any decision on the same at this juncture. 25. Be that as it may, even if assuming in the matter before this Court that the said Petronas Regulations have the force of law, this Court has thus duly considered the purpose of the statute i.e the Petroleum Development Act 1974 and the regulations thereto which concerns inter alia the rights, powers, liberties and privileges of exploring, exploiting, winning and obtaining petroleum whether onshore or offshore of Malaysia. 26. Consequently, I hold that the alleged illegality or the contravention of law in relation to the Bumiputera requirement referred to in this grounds above, is not directly related to or bear sufficient nexus to the activities or business of the company and/or for which the company was incorporated which being, inter alia is to carry on, establish, manage and operate oilfield services and other related services, which I find are by itself completely valid and legal. Thus, I hold that the alleged breach of statutory requirement does not justify that the Company be wound up more so when the facts before me evidence that : (a) when the license under service / supplier codes SC3060104 and SP22802000 from Petronas for the period 24.3.2017 to 23.3.2020 was obtained, the Trust Deeds were not yet in existence; and (b) Petronas has knowledge of the arrangements in the Trust Deed due to the audit conducted but has chosen not to make any finding or decision that there has been any irregularity or breach 24 of any law or policy of Petronas in relation to the Company’s shareholding and/or beneficial ownership. 27. From the above, it is clear that Petronas, being the authority or entity which had issued the Bumiputera policy, had itself found it fit to hold that the Company had not breached its Regulations, which I believe consequently supports the view that this Court must exercise some measure of restraint to wind up the Company, which will in the circumstances herein be a final and rather drastic step to take. 28. Finally, I have also noted from the evidence before me, that there are pending disputes between the parties herein where the Petitioner is being sued by the Company in no less than 3 civil suits at the Kuala Lumpur High Court vide Suit no. WA-22NCVC-788-12/2020, WA- 22NCC-262-06/20211 AND WA-23NCVC-5-01/2022 for various causes of action. After a full and complete evaluation of the matter before me, I do find that the Petition appears to have been commenced with the intention to not only curtail but also to forestall the aforesaid Civil Suits. 29. Accordingly, I hereby dismiss the Petition with costs of RM20,000 to be paid by the Petitioner to the Respondent. Dated: 12th day of September 2022 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE KUALA LUMPUR HIGH COURT 25 Parties: Eldarius Yong Zhen Jie for the Petitioner [Messrs Chellam Wong] Sara Idylla binti Isbah for the Respondent [Messrs Ahmad Rizal, Sara Idylla & Co.] 26