2 days Ago By New Straits Times
KUALA LUMPUR: The Court of Appeal has ruled that a company director's retirement requires a general meeting even if they were due for the retirement.The court's ruling relates to a case involving a corporate figure, who had been told he no longer had a seat on the board of a group of companies involved in the palm oil industry.In 2019, Datuk Seri Andrew Kam was informed that he had lost his place on the board as he had retired as a director, even though no general meeting had been held.
Kam's siblings and father previously sought declarations from the High Court in the names of the companies that Kam was deemed to have retired from due to the absence of annual general meetings.While the High Court ruled in their favour, the Court of Appeal reversed this decision.In the grounds of judgment, Court of Appeal judge Datuk Mohd Nazlan Mohd Ghazali said Kam had the right to seek re-election.
However, this right was denied by the respondents' claim that his retirement took effect automatically upon the expiry of his period without giving him the opportunity for re-election. Nazlan, citing provisions in the Companies Act, said corporate democracy was important, and that the law serves to promote shareholder democracy and activism. He said retirement and re-election are part of a general meeting, and that retiring directors had the right to seek re-election.
Nazlan also expressed concern about potential abuse if directors could be deemed to have retired without a general meeting as it would allow a majority of directors to avoid convening an AGM to remove a director due for retirement. The appellate court's ruling means that Kam's retirement and vacation of office in the companies are not valid.It is understood that there is no precedent on this point of law in Malaysia except in the case of Tan Sri Wan Sidek Wan Abdul Rahman v Rahman Hydraulic Tin Bhd.
However, the Court of Appeal distinguished Kam's case from that 2012 case on several grounds, including the fact that Kam had obtained an injunction preventing certain companies from convening an AGM. Kam was represented by lawyers Kenny Chan, and Lim Poh Leong while the respondents were represented by lawyers, Michael Chow, Wong Yee Chue, Hannah Yeoh, Elisa Oyenz Jeson and Neoh Kai Sheng. © New Straits Times Press (M) Bhd.
