CHOONG SHIN CHEONG 1. SURUHANJAYA SYARIKAT MALAYSIA 2. CHEW AH FOCK

CHOONG SHIN CHEONG 1. SURUHANJAYA SYARIKAT MALAYSIA 2. CHEW AH FOCK

On the unchallenged testimony of the solicitors and evaluation of contemporaneous documents, the Court found the 21,000 shares allotted to Chee Chooi Fun were unpaid and effectively without legal title (share certificate cancelled), and the 469,998 shares issued by capitalisation involved no consideration from the recipients and amounted to prohibited financial assistance under s.67 CA 1965; these facts constituted sufficient cause to exercise the Court's discretion under s.162 CA 1965 to rectify the register to the 2002 composition, so the appeal was allowed and the High Court order set aside.

Citation
J-01(NCVC)(W)-613-10/2018 (Mahkamah Rayuan)
Parties
Appellant: Choong Shin Cheong; First Respondent: Suruhanjaya Syarikat Malaysia; Second Respondent: Chew Ah Fock
Court
NCVC
Jurisdiction
Malaysia
Judgment Date
18 July 2019
Case Number
J-01(NCVC)(W)-613-10/2018 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal (company Law) / Appeal Decided by Court of Appeal (judgment Dated 30/06/2020)
Outcome
Appeal allowed; High Court order dated 26/9/2018 set aside; consequential order for rectification of share register; parties to bear their own costs
Legal Topics
Rectification of Register Under S.162 CA 1965, Share Allotment Validity, Capitalisation of Assets as Share Consideration, Financial Assistance Prohibition S.67 CA 1965, Role of Registrar/ccm Records, Weighing Contemporaneous Documents Vs Testimony
Source Language
Malay/English
Company Law Civil Procedure Insolvency and Liquidation Evidence Rectification of Register Under S.162 CA 1965 Share Allotment Validity Capitalisation of Assets as Share Consideration Financial Assistance Prohibition S.67 CA 1965 +2 more

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Parties

Choong Shin Cheong

Appellant

Suruhanjaya Syarikat Malaysia

First Respondent

Chew Ah Fock

Second Respondent

Procedural Posture

Civil Appeal (company Law) / Appeal Decided by Court of Appeal (judgment Dated 30/06/2020)

Legal Issues

  1. 1 Whether allotment of 21,000 shares to Chee Chooi Fun was valid given alleged non-payment and cancelled share certificate
  2. 2 Whether allotment of 469,998 shares by capitalisation of the land was valid and whether it amounted to prohibited financial assistance under s.67 CA 1965
  3. 3 Whether the court should exercise its discretion under s.162 CA 1965 to rectify the share register to the 2002 composition

Ratio Decidendi

On the unchallenged testimony of the solicitors and evaluation of contemporaneous documents, the Court found the 21,000 shares allotted to Chee Chooi Fun were unpaid and effectively without legal title (share certificate cancelled), and the 469,998 shares issued by capitalisation involved no consideration from the recipients and amounted to prohibited financial assistance under s.67 CA 1965; these facts constituted sufficient cause to exercise the Court's discretion under s.162 CA 1965 to rectify the register to the 2002 composition, so the appeal was allowed and the High Court order set aside.

Court Disposition

Appeal allowed; High Court order dated 26/9/2018 set aside; consequential order for rectification of share register; parties to bear their own costs

Orders

  • Appeal allowed
  • High Court Order dated 26/9/2018 set aside