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Case Significance

Illustrates the court's grant of interim access to company records to a director asserting statutory rights under the Companies Act 2016, supported by the balance of convenience and the preservation of documentary evidence.

This High Court decision at Shah Alam sets out the court's reasons for granting an ad interim order allowing a director to inspect and take copies of the records of several companies, in the context of a dispute over the beneficial ownership of a group of corporate entities set up to operate licensed moneylending businesses. The first plaintiff, in contest with the first defendant over who beneficially owned the companies named as co-parties, applied for an order that he be allowed to inspect and copy the cash and management accounts, cash books, moneylending agreements, tenancy agreements, customer records and business records of certain of the companies, and that an approved company auditor appointed by him be permitted to inspect and copy those records on a written undertaking of confidentiality to the court. The application was framed as an inter partes interlocutory injunction, and the court granted the interim relief pending the inter partes hearing that had been fixed. The court's reasoning drew on the statutory right of a director to access company records reflected in section 245 of the Companies Act 2016 and on the balance of convenience. It found no justification for the defendants' refusal to give the first plaintiff peaceful access to the records so that he could discharge his statutory duties, and it was also minded to grant the order to preserve documentary evidence likely to be discoverable in the proceedings, observing that the defendants' refusal to cooperate invited scrutiny. The court noted that the plaintiffs had not sought the imposition of timelines for implementation of the order, and it emphasised that the order was interim in nature and by definition subject to confirmation at the inter partes hearing. The grounds were furnished in response to the defendants' appeal to the Court of Appeal against the grant of the order, which they had also applied in the High Court to set aside. The judgment is a useful illustration of the court's willingness to grant interim access to company records to a director asserting statutory rights, and of the balance-of-convenience and evidence-preservation considerations that support such relief.