SOUTH MALAYSIA INDUSTRIES BERHAD

On the court record

A listed company whose matters study the boundary between the courts and the Securities Commission: striking out claims that trespass on the regulator's take-over jurisdiction, and shareholders' mandatory statutory rights.

SOUTH MALAYSIA INDUSTRIES BERHAD, a listed company, appears in the corpus in take-over, shareholder-rights and striking-out matters, and its appearances centre on the interface between company litigation and securities regulation. In one matter the court considered an application to strike out a cause of action engaging sub-paragraph 323(3)(d)(i) of the Companies Act 2016 concerning a written undertaking in commercial transactions, the company's constitution, and an alleged breach of the take-over rules concerning persons acting in concert. In connected matters framed partly in Bahasa Malaysia, the court addressed a striking-out application under Aturan 18 Kaedah 19 (Order 18 rule 19) of the Rules of Court 2012 and the effect of section 218(2) of the Capital Markets and Services Act 2007, with an intervener joining the proceedings.

A recurring theme is the exclusive jurisdiction of the Securities Commission over take-over matters. In a shareholders'-rights matter the court considered a shareholder's right to convene an extraordinary general meeting and entitlement to the Record of Depositors under sections 310(b) and 314 of the Companies Act 2016 and sections 34(5) and (6) of the Securities Industry (Central Depositories) Act 1991, holding that the mandatory nature of the section 34 obligation meant a company could not refuse the Record of Depositors on the basis of alleged take-over breaches, since the court should not usurp the Securities Commission's regulatory function.

For a reader, the cluster is a study of the boundary between the courts and the securities regulator: the striking out of claims that trespass on the Securities Commission's exclusive jurisdiction over take-overs, and the mandatory statutory rights of shareholders to convene meetings and obtain the Record of Depositors. The company and corporate parties are named as they appear on the record; individual shareholders are referred to by their procedural role only. The company's matters map the boundary between the courts and the securities regulator: claims that trespass on the Securities Commission's exclusive jurisdiction over take-overs are struck out, while a company cannot rely on alleged take-over breaches to defeat a shareholder's mandatory statutory rights to convene a meeting and obtain the Record of Depositors. The result is a careful demarcation of judicial and regulatory functions.