Malaysia Case Law: Decisions & Judgments

Topic

Section 540 companies act 2016

Legal area

Court

27 Apr 2026

CITY PROPERTIES SDN BHD JALEX SDN BHD

Citation

W-02(NCC)(W)-1226-07/2022 (Mahkamah Rayuan)
Court

NCC
Case number

W-02(NCC)(W)-1226-07/2022 (Mahkamah Rayuan)

Court held s.540(1) CA 2016 includes bodies corporate as 'person' under ordinary statutory interpretation (Interpretation Acts s.3 applies), dishonest intent can be inferred where a company continued incurring debts after the TL3/RM33m budget was exhausted with no alternative funding and where concealment/misrepresentation and non‑production of key documents occurred, and knowledge of the directing mind (Yap) was properly attributable to CPSB; therefore appellants failed and both appeals dismissed.
14 Nov 2025

SUMMIT HOTELS MANAGEMENT SDN. BHD. 1. ) DATO' SIVAKUMARAN A/L BALAN NAIR 2. ) DATIN ALMA ZAMORANO SIVAKUMARAN NAIR 3. ) MAHENDRAN A/L BALAN 4. ) RABINDER SINGH A/L INDERJIT SINGH 5. ) RABINDER BUDIMAN & ASSOCIATES 6. ) RAJESWERI A/P PARAMAS

Citation

WA-22NCC-307-05/2025 (Mahkamah Tinggi)
Court

High Court
Case number

WA-22NCC-307-05/2025 (Mahkamah Tinggi)

The court struck out the plaintiff's action because the plaintiff failed to plead or evidence any dealing with Leisurepoint's assets or any nexus between the defendants' alleged acts and the plaintiff's ability to recover the judgment sum; conflicts of interest and delays did not, without more, establish fraudulent trading; the claim was speculative and unsustainable.
30 Jul 2024

YISHUN CONSTRUCTION SDN BHD 1. ) TAN SHEW KONG 2. ) CHONG SEE HEONG 3. ) CHUAH CHONG NGEE

Citation

JA-22NCvC-13-02/2024 (Mahkamah Tinggi)
Court

High Court
Case number

JA-22NCvC-13-02/2024 (Mahkamah Tinggi)

The High Court struck out the plaintiff's claim (allowed Defendants' Lampiran 9) because the statement of claim failed to disclose a reasonable cause of action: the fraud allegation was pleaded without required particulars, the dividend distribution occurred before any binding judgment and therefore, on the pleadings, did not demonstrate an intent to defeat that later judgment, and the plaintiff did not plead or establish status as a contingent creditor under s.540. Consequently the corporate veil could not be pierced and personal liability of directors was not established; the plaintiff's Or…
13 Oct 2022

SIXTY FIVE DEGREE SDN BHD 1. ) TAN KAM MENG 2. ) TAN HON PENG 3. ) TAN SUNG LING

Citation

WA-22NCC-158-04/2021 (Mahkamah Tinggi)
Court

High Court
Case number

WA-22NCC-158-04/2021 (Mahkamah Tinggi)

On the balance of probabilities the Company carried on business with intent to defraud creditors and the defendants, as directors, were knowingly parties to that carrying on; therefore under s.540(1) CA 2016 the court may and did declare the defendants personally liable for the Company's liabilities and awarded judgment against them jointly and severally.
4 Oct 2022

02(f)-35-04/2022(B) (Mahkamah Persekutuan)

Citation

02(f)-35-04/2022(B) (Mahkamah Persekutuan)
Court

f
Case number

02(f)-35-04/2022(B) (Mahkamah Persekutuan)

On the uncontroverted facts the defendants incorporated and used dormant companies (Centennial and Westhill), procured immediate transfer of vendor asset to themselves while leaving contractual payment obligations with a company that had no funds, and thereby created corporate layers to insulate themselves; those circumstances established dishonesty by ordinary standards and subjective knowledge such that s540 CA 2016 applied and directors are personally liable; the defendants are estopped by res judicata from re‑raising the misrepresentation defence previously rejected; the principle that la…
11 Jan 2022

Christopher Paul A/L Aisu [LAW OFFICE OF PAUL] Ramkarpal Singh a/l Karpal Singh [KARPAL SINGH & CO.]

Citation

PA-22NCC-41-12/2021 (Mahkamah Tinggi)
Court

High Court
Case number

PA-22NCC-41-12/2021 (Mahkamah Tinggi)

Because the 2015 judgment against LS Fishery Sdn Bhd for fraudulent conduct is final, the plaintiff acquired creditor status and may invoke s.540(1) to hold persons knowingly party to that fraud personally liable; the 2nd, 3rd and 4th defendants were found or established as directing minds/masterminds or knowingly party to the fraud and failed to raise any triable issue, therefore summary judgment was appropriate and the court declared them personally liable and ordered payment of the company debt as assessed in the 2015 judgment.
3 Sept 2021

EASTMONT SDN BHD 1. ) TAY KEONG KOK 2. ) CHONG SHEAU LING 3. ) CHUA CHOON YANG 4. ) MOHAMAD HANAFFI BIN MOHAMED JAAFAR 5. ) MOHD YAZID BIN TUNGGAL 6. ) YEO TIONG WE

Citation

BA-22NCC-82-06/2020 (Mahkamah Tinggi)
Court

High Court
Case number

BA-22NCC-82-06/2020 (Mahkamah Tinggi)

On the balance of probabilities the court found defendants knew of Mega Planner’s debts, orchestrated and used Dakota to obtain a JID and effect a sham winding up to avoid payment; the corporate veil was pierced under s540 and defendants were held jointly and severally personally liable without limitation for Mega Planner’s debts to Plaintiff, assessed as RM17,012,816.88, with costs awarded.
19 Aug 2021

1. ) LAI FEE 2. ) LAI YING HAUR 1. ) WONG YU VEE 2. ) LIEW FOO KIAT 3. ) MICHAEL ADRIAN REYES

Citation

B-02(NCvC)(W)-930-08/2020 (Mahkamah Rayuan)
Court

NCvC
Case number

B-02(NCvC)(W)-930-08/2020 (Mahkamah Rayuan)

The Court of Appeal upheld the High Court's factual findings that the Appellants failed to prove, on the balance of probabilities, that the Respondents carried on Centennial’s business with intent to defraud creditors; the part-payment by Westhill constituted valid third-party consideration and did not prove fraudulent design; alleged misrepresentations did not establish fraudulent intent to refuse payment but supported a commercial decision; therefore the s540 claim failed and the appeal was dismissed.
25 Jun 2021

YSA MARKETING SDN BHD (COMPANY NO.: 719394H) 1. NG SHIAN TECK (NRIC NO.: 551016055091) 2. WONG KET PENG (NRIC NO.: 580222105865) 3. HAW YOKE CHENG (NRIC NO.: 660923106545) 4. LIEW LEE PENG (NRIC NO.: 681010106666) 5. LEE KAI MUN (NRIC NO.:

Citation

WA-22NCC-192-04/2019 (Mahkamah Tinggi)
Court

High Court
Case number

WA-22NCC-192-04/2019 (Mahkamah Tinggi)

Plaintiff failed to discharge the burden to prove on the balance of probabilities that Hin Interior's business was carried on with intent to defraud or that the defendants were knowingly party to any fraudulent trading; witness evidence lacked personal knowledge and material acts relied upon by the plaintiff had innocent explanations, therefore the claim under s.540 CA 2016 is dismissed.
29 Jan 2021

Ananda Kumar a/l Krishnan (No. K/P: 651005-08-6309) 1. LS Fishery Sdn Bhd (No. Syarikat: 733138-K) ... Pertama 2. Ng Tee Huat (No. K/P: 781018-07-5153) ... Kedua 3. Ng Ai Tiang (No. K/P: 770424-07-5788) ... Ketiga 4. Ng Tee Keat (No. K/P: 7

Citation

PA-24NCC-17-08/2020 (Mahkamah Tinggi)
Court

High Court
Case number

PA-24NCC-17-08/2020 (Mahkamah Tinggi)

Court held plaintiff had a good arguable case under s.540 Companies Act 2016 based on the final judgment that established fraud by LS Fishery Sdn Bhd; there was no inordinate delay because the statutory cause of action arose only after finality; non-disclosures alleged were not material to the ex parte grant; plaintiff demonstrated real risk of dissipation by pattern of transfers and conduct; consequently Mareva injunctions and ancillary disclosure orders were properly made and sustained against the 1st–4th defendants but not against the 5th and 6th defendants (and not against the 4th defenda…