MIDF AMANAH INVESTMENT NOMINEES (TEMPATAN) SDN BHD v EFOGEN SDN BHD (DALAM PENGGULUNGAN) PENCELAH ABU TALIB BIN ABDUL RAHMAN

Case Significance

An application to compel a company in liquidation to register shares sold under a share purchase agreement, addressing a nominee's standing and court sanction under section 472 of the Companies Act 2016.

This High Court decision concerns an application, in the context of a company in liquidation, for an order compelling the wound-up company to register certain shares in the name of an intervener. The shares had been sold to the intervener under a share purchase agreement, but he had never had them registered in his name; instead the shares stood registered partly in the name of the applicant, a nominee company, and partly in the name of another individual. The application sought registration of the shares in the intervener's name within fourteen days of the order.

Two questions of company law framed the dispute. The first was the applicant's locus standi: whether a nominee that holds shares for a beneficial owner has standing to seek an order regulating their registration. The second, and more significant in a liquidation, was whether the prior sanction of the court for the disposal of the shares had been obtained under section 472 of the Companies Act 2016 — the provision that renders certain dispositions of a company's property after the commencement of winding up void unless the court otherwise orders — together with the related provisions in sections 107 and 471. A transfer of shares affecting a company in liquidation cannot simply be given effect without regard to the statutory controls designed to protect the general body of creditors. The Court also considered whether the company had in fact refused to register the shares.

Having examined the share purchase agreement, the registration position and the statutory framework, the Court allowed the application. The judgment is a useful illustration of how the courts approach an application to compel registration of shares against a company in liquidation, the standing of a nominee to seek such relief, and the significance of court sanction under section 472 of the Companies Act 2016 for dispositions of property once winding up has begun.