NG KAE JENG v 1. ) INVENPRO (M) SDN BHD 2. ) LIANG KIEN HUI 3. ) KAMARUL BAHRIN BIN ABDULLAH PENCELAH Suruhanjaya Syarikat Malaysia (SSM)

Case Significance

Illustrates the nugatory-appeal principle governing stays of execution pending appeal: where a judgment in an oppression action effects irreversible changes to corporate control — here reinstatement of a director, a five-year disqualification, and removal of a company secretary — immediate execution may constitute special circumstances warranting a stay.

This High Court decision at Kuala Lumpur (Commercial Division), delivered by Judge Atan Mustaffa Yussof Ahmad, concerns an application for a stay of execution pending appeal in a company-oppression dispute involving Invenpro (M) Sdn Bhd, with the Companies Commission of Malaysia intervening. The underlying proceedings, brought by the plaintiff shareholder, alleged oppressive conduct under section 346 of the Companies Act 2016, centred on the removal of a director without compliance with the statutory requirements for removal — including special notice and an ordinary resolution at a properly convened general meeting under sections 206 and 322 — and on the appointment of a company secretary said to be invalid for want of a board resolution under section 236. After the main hearing, the court had granted judgment reinstating the plaintiff as director, disqualifying the opposing party from directorship for five years, and removing the improperly appointed company secretary. The unsuccessful defendants appealed and sought a stay.

On the stay application, the court applied the settled principle that a stay pending appeal requires special circumstances, weighing in particular whether execution would render the appeal nugatory. It accepted that immediate execution would produce irreversible consequences: the five-year disqualification of the second defendant, if carried into effect at once, could not be undone if the appeal later succeeded, and execution was said to threaten substantial property transactions and pending proceedings of significant value. Being satisfied that these amounted to special circumstances rendering the appeal nugatory, the court allowed the defendants' application and stayed execution of the order dated 7 March 2025 pending the final determination of their appeal to the Court of Appeal, with the costs of the application to be costs in the cause of the appeal. The judgment is a clear illustration of how the nugatory-appeal principle operates where the judgment under appeal effects irreversible changes to corporate control.