alasan penghakiman wa-24ncc-659-05-2022 (dato' wong fong leng & 1 lagi v. ssm & 1 lagi) +@001

WA-24NCC-659-05/2022 Kand.
33
19/09/2023 12:20:17
IN THE HIGH COURT IN MALAYA AT KUALA LUMPUR

(COMMERCIAL DIVISION)
ORIGINATING SUMMONS NO.: WA-24NCC-659-05/2022
In the matter of LI MEDICAL SDN BHD

(Company No.: 633889-T)
And
In the matter of Section 549 (and/or

Section 550) and Section 555
Companies Act 2016
And
In the matter of Order 1 rule 8, Order 88

rule 2, and Order 92 rule 4 of the Rules
of Court 2012
BETWEEN
1. DATO’ WONG FONG LENG

(NRIC NO.: 651220-08-5464)
2. LI MEDICAL SDN BHD

(COMPANY NO.: 633889-T) … PLAINTIFFS
AND
1. REGISTRAR OF COMPANIES,
COMPANIES COMMISSION OF MALAYSIA
2. LIM BOON PING

(NRIC NO.: 641101-08-6019) … DEFENDANTS
S/N Uh5ZqG8oDUqPPevAJ9CbAA
**Note : Serial number will be used to verify the originality of this document via eFILING portal
2
GROUNDS OF JUDGMENT
Introduction
[1] By the Originating Summons (“OS”), the 1st Plaintiff (“P1”) in her
capacity as director and shareholder of the 2nd Plaintiff (“the Company”)
sought an Order that the name of the Company be reinstated into the
Companies Register of the 1st Defendant.
[2] After having read the cause papers, considered the submissions
and heard oral arguments of the parties, I had dismissed the OS with costs.
This judgment contains the reasons for the decision delivered on 7.7.2023.
Background Facts
[3] The Company was registered on 10.11.2003 with business objects

inter alia the provision of medical consultancy services, and importing and
distribution of pharmaceutical goods.
[4] The Companies Commission of Malaysia (“CCM”), the 1st

Defendant pursuant to s. 551(1), Companies Act 2016 (“the Act”) by letter
dated 21.05.2021 to the Company, stated it had reasonable cause to believe
that the Company was not carrying on business or was not conducting any
business. This as explained by CCM in Enc. 7 was due to the Company’s
failure to comply with the provisions under the Act, to lodge Annual Returns
and Audited Financial Statements since 2017. The Company was struck off
from the Companies Register on 22.10.2021 when the Notice under s.
3
551(2) of the Act was gazetted on 22.10.2021 in Government Gazette No.

17037.
[5] P1 and the 2nd Defendant (“D2”) are a couple who are also directors
and shareholders of the Company. Their marriage broke down in 2016 and
they are embroiled in an on going acrimonious divorce proceeding vide
Kuala Lumpur High Court Divorce Petition No. WA-33-41-01/2020 (“the
Divorce Proceeding”). The breakdown in the marriage has spawned various
other legal actions between the couple as described in the parties’ affidavits
and submissions.
The 1st Plaintiffs’ Case for reinstatement
[6] P1 alleged that:
6.1 She is an “aggrieved person” pursuant to s. 555 (1) of the Act

as she is claiming inter alia the assets and shareholding of
D2 in the Company, the 2nd Plaintiff as part of matrimonial
assets in the Divorce Proceeding, her claim for division of
matrimonial assets in respect of the Company would be
defeated if the Company is not reinstated into the Companies
Register;
6.2 She was not aware of the Company’s striking out and that
she had ‘consistently taken the position that she verily
believes the Company is at all material times, an active
company (not dormant)’. A CCM search in April 2021 shows
4
the Company’s status as “existing”. She contended that the

reinstatement of the Company to the Companies Register is
necessary and important to ensure, inter alia:
6.2.1 that the Company can continue to run its business

legally and also comply with the Court Orders that
have been granted and/or may be granted against the
Company including but not limited to: -
6.2.1.1 the Consent Order dated 28.09.2021

granted by the Kuala Lumpur High Court vide
Originating Summons No. WA-24NCC-200-
05/2021 (“Inspection Proceeding) whereby
the Company would open its accounting and
other records for inspection by P1’s
approved company auditor for a period of 90
days; and
6.2.1.2 any Order that may be granted against the

Company via the Divorce Proceeding;
6.3 the Company can conduct further investigation and have an

option to take legal action against third parties including D2
and the previous accountants in view of P1’s discovery of
discrepancies in the financial affairs of the Company
pursuant to the Inspection Proceeding.
5
[7] P1 claims that the Company is carrying on business as:
7.1 movement of funds can be seen from the draft Reports and
Financial Statements of the Company for financial year
ended 31.12.2018 that was prepared by the Company’s
auditors, Messrs Yeo, Lim & Co (“YLC”);
7.2 The Company was actively defending itself in the Inspection

Proceeding as of 13.07.2021 and subsequently entered into
a Consent Order dated 28.09.2021. These events happened
after the issuance of the Letter from CCM;
7.3 as of 1.12.2021, the Company was still being represented by

Messrs Messrs. YN Foo & Partners (“YNF”) and gave
instructions to YNF to issue letters on its behalf; and
7.4 the term “carrying on business” and “in operation” ought to

be given a wide definition - Tetuan Wang & Co. v.
Suruhanjaya Syarikat Malaysia; Thiageswary A. Suppiah &
Ors (Interveners) [2013] 1 LNS 200
[8] P1 postulated that it is just that the Company be reinstated to the

Companies Register:
8.1 so that her claim for division of matrimonial assets in the

Divorce Proceeding involving the 2nd Plaintiff would not be
defeated;
6
8.2 so as not to render impossible any investigations or discovery

against the Company or its affairs pertaining to the
dissipation of matrimonial assets by D2;
8.3 so that she would not be deprived of the benefit under the
Consent Order dated 28.09.2021 entered in respect of the
Inspection Proceeding which included an order for liberty to
apply;
8.4 that she would not be deprived of her rights to initiate any
legal action on behalf of the Company against third parties
including D2 due to her latest discovery regarding the
discrepancies in the financial affairs of the Company.
CCM’s position
[9] CCM took the position that:
9.1 it has a duty to ensure good corporate be practiced among

all companies and its directors;
9.2 The striking off of the Company under s. 551(1) of the Act
was done in accordance with law - the data inspections on
the Company by the Registrar shows that the Company has
failed to lodge Annual Returns and Audited Financial
Statements since year 2017;
7
9.3 The directors of the Company (P1 and D2) have failed to
execute their responsibilities as officers of the Company and
failed to practise good corporate governance by their failure
to prepare and lodge Annual Returns as required by s. 68 CA
2016 and Audited Financial Statements as mandated by s.
258 CA 2016 since year 2017;
9.4 failure to prepare and lodge Annual Returns and Audited

Financial Statements is an offence under the Act;
9.5 if the application is not strongly objected by CCM and is

allowed by the Court, other companies will be encouraged
not to take seriously the issue of compliance with the Act;
9.6 the inherent power of the Court to reinstate the Company has
to be used sparingly, citing the case of Shobana a/p Perumal
v Ganesh a/l Guna [2016] MLJU 1108 which applied the
Canadian case of College Housing Co-operative Ltd. v
Baxter Student Housing Ltd. (1976) 2 SCR 475 CanLII 164
(SCC), inherent jurisdiction being a special and extraordinary
power cannot be exercised to override or to conflict with
statute or rule. In the event the Court is minded to allow the
reinstatement, that the Court order the Plaintiffs to prepare
the draft Annual Returns and Audited Accounts for year 2017
until present and to exhibit the same in a Supplementary
Affidavit before any order for reinstatement is made and cost
of RM2,000.00 be granted to CCM.
8
2nd Defendant’s objections to reinstatement
[10] The 2nd Defendant in essence argued that:
10.1 the Company was not carrying on business or in operation

at the time it was struck-off; and
10.2 it is not just for the Company to be reinstated.
[11] The 2nd Defendant elaborated that the Company was not carrying
on business or in operation since mid 2016 as:
(a) the Company’s business at the time of incorporation was the

provision of medical consultancy services. The Company
was used to receive the income from D2’s medical practice;
(b) the Company had no business and was dormant after a

directive was issued by the IRB to the Malaysian Medical
Council in mid-2016, prohibiting doctors from receiving their
income through companies; Section 9 of the 2018 Draft
Accounts states that ‘the Company is not involved in any
operations during the financial year’, while Section 8 states
that the Company has had no employees in 2017 and 2018;
(c) P1’s claim that the Company has been an active company at
all material times since its incorporation is contradicted by her
own position in the Divorce Proceeding, where at paragraph
63 (b) of her Reply and Answer to Cross-Petition, she
accepts that the Company is dormant;
9
(d) the mere fact that the CCM search shows in April 2014 that
the Company is ‘existing’ cannot in itself mean that the
company has active business;
(e) the alleged movement of funds in 2018 and the Company’s

participation in the Inspection Proceeding and subsequent
entry of the Consent was before the Company was struck off
on 22 .10. 2021;
(f) the issuance of letters by YNF to P1’s solicitors (“DY’) was

necessitated by P1 herself, as she had instructed DY to write
to YNF. In any event, the mere fact that the Company was
instructing solicitors to respond to P1’s allegations does not
change the fact that that the Company was not carrying on
active business;
[12] D2 asserted that it is unjust to reinstate the Company as:
12.1 P1 has an ulterior motive in filing the OS:
12.1.1 the OS was filed as part of her vendetta against D2,

in retaliation to the various legal proceedings
initiated against her by D2:
(a) as P1 was reluctant to discharge her fiduciary

duties to the Company and further that it was
dormant, D2 had in YNF’s letter dated
4.9.2019 to DY stated that he was prepared to
10
either wind-up the Company or transfer all his

shares to P1 for a nominal sum of RM1 but by
a letter dated 20.9.2019 to YNF, DY informed
YNF that P1 was unwilling to wind-up the
Company or purchase D2’s shares until her
accountant had verified and audited the
Company’s accounting records;
(b) Both D2 and YLC have provided P1 with

extensive explanations to her queries, and
with supporting documents;
(c) D2 has consistently asserted that P1 is ‘more

than welcome to examine Li Medical’s
accounting and other record’. If D2 was
concealing his wrongdoing, there would be no
reason for him to make such a statement;
(d) YLC had also invited P1 to inspect the

Company’s records at its premises on
numerous occasions over an ample period of
time but P1 chose not to attend for a variety of
reasons. This in itself shows that P1 does not
truly believe that there is any wrongdoing by
D2, and that her requests for documents and
information were not genuine;
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(e) P1 could have easily signed the audited

accounts for FYE 2017 to enable the
Company to comply with its regulatory
obligations first, and qualified her approval if
necessary. Alternatively, P1 could have
informed CCM of the reason why she could
not sign the audited accounts for FYE 2017.
She failed to do either;
12.1.2 the Orders sought by P1 shows she wants to punish

D2:
(a) P1 was made aware that D2 was fined

RM5,000 by CCM for the Company’s failure to
file audited accounts for FYE 2017 through a
notice dated 15th November 2018 (“Notice”)
sent to the matrimonial home occupied by P1
and that D2 has received warning notices from
IRB due to P1’s failure to sign the Company’s
audited accounts for FYE 2017 but she made
no attempt to communicate with CCM and IRB
to inform them of the purported ‘reason’ why
she was unable to sign the Company’s audited
accounts for FYE 2017;
(b) P1’s conduct does not show she was genuine

in having the Company re-instated – in this
regard, CCM was prepared to agree to
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reinstate the Company if P1 and D2 jointly

paid all compounds and CCM’s administrative
costs but instead, P1 sought an order that D2
be ordered to pay any compounds that may be
imposed by CCM, and for D2 to bear CCM’s
administrative costs if the Company is
reinstated;
12.1.3 P1’s allegations are to be viewed with caution as

she kept taking contradictory positions:
(a) she stated in para 13(d)(ii) of her defence in

Kuala Lumpur High Court Civil Suit No. WA-
22NCC-425-09/2018 (“2018 Suit”), a suit
successfully brought by D2 to restore his
shares in a company Sun Pharmaceutical Sdn
Bhd (“Sun Pharma”), that she was aware that
D2 signed Company documents on her behalf
and confirmed that she ‘did not object, and
consented and/or allowed and/or authorised’
D2’s acts but in the present proceedings, she
alleges at Encl 12, para 16.1 that ‘the 2nd
Defendant has forged my signature on the 2nd
Plaintiff’s documents without my authorisation,
knowledge or consent’;
13
(b) she accepts in the Divorce Proceedings that

the Company is a dormant company but in the
present OS, she alleged that the Company is
not dormant and has been an active company
at all times since its incorporation;
(c) in her Affidavit in Support of the OS, she states

in para 7 that Enclosure 1 is necessary ‘so that
the 2nd Plaintiff can take legal action” against
“the previous accountants’ and D2 but in para
25 states she only wants ‘an option to take
legal action against the 2nd Defendant if
necessary’.
12.2 P1 has never been interested in the Company:
(a) she never took issue with the way in which D2 ran the
Company’s affairs since its incorporation, left decisions
regarding the Company to D2 and had never asked for
copies of statutory documents from D2 or YLC;
(b) although P1 claims that she ‘started to be extra

cautious’ in 2014/2015, when D2 asked her to sign
documents, she never asked for any of the Company’s
records from D2 or YLC. Instead, it took P1 an
additional 4 or 5 years to inform YLC that she
purportedly did ‘not want to sign any document blindly’
and to ask for copies of the Company’s records. This,
14
coupled with P1’s concession that she has no

knowledge on how the Company is being managed,
operated and run by D2, shows her disinterest in the
Company;
(c) Even though P1 had full access to the Company’s

records since its incorporation, she chose to sleep on
her ‘rights’ for 15 years until she suddenly took an
‘interest’ in the Company’s affairs in 2018. P1’s interest
in the Company took place 4 months after D2’s
discovery of her wrongdoing in Sun Pharma, and
increased in tandem with the filing by D2 of the 2018
Suit, D2’s Inspection Action, the Leave Action and the
Derivative Action against her pertaining to Sun
Pharma. P1’s ‘interest’ in the Company peaked when
she discovered that D2 intended to initiate contempt
proceedings against her; she filed this action 3 days
later;
(d) even though D2 and YLC have voluntarily provided P1

with various explanations and documents pursuant to
her numerous requests, P1 still refused to sign the
audited accounts for FYE 2017 or to notify CCM of her
refusal to sign the same, ultimately resulting in CCM
striking off the Company at which point of time, P1 had
sight of the complete audited accounts for FYE 2017
for more than 3 years.
15
12.3 There has been an inordinate delay in filing and prosecuting

Enclosure 1; P1 found out about the Company being struck
out in December 2021 but filed the OS only 5 months later
in May 2022. Having found out during a case management
on 17.10.2022 that the matter is be transferred, it took her
another 4 months to even follow up with the Court regarding
the transfer;
12.4 There is no useful purpose served by reinstating the

Company as it has not carried on business since 2016:
(a) Reinstating the Company is an act of futility, as it will

only be struck-off again as it is dormant;
(b) P1’s undertaking to fulfil the settlement conditions

imposed by CCM at some future, uncertain point in time
‘once a proper inspection and accounting of the 2nd
Plaintiff’s records have been conducted’ rings hollow as
18 months have elapsed since the inspection by her
Auditors in November 2021; further, the 90 day’
inspection period under the Consent Order has expired
in December 2021 with no allegation made by P1 that
her auditor’s inspection was inadequate or incomplete,
and P1 has not filed any application to extend the
inspection period; additionally, the Company has
already complied with its obligations under the Consent
Order and D2 has also consistently stated that P1 is
16
free to examine the Company’s accounting and other

records at any given time;
(c) P1’s vague statement that she wants to reinstate the

Company so that she has ‘an option to take legal action
against the 2nd Defendant if necessary’ is insufficient
basis to allow Enclosure 1;
(d) Although P1 has sought in the Divorce Proceeding “a

division of matrimonial assets, including but not limited
to the assets and shareholdings of the 2nd Defendant in
the 2nd Plaintiff” any accounting process involving the
Company can be done without the need to reinstate it;
12.5 The reinstatement of the Company is prejudicial to its own

interest as well as D2’s interest. As the Company is dormant,
any fines imposed by CCM and IRB would have to be paid
by D2 and P1. D2 had to pay a RM5,000 fine to CCM
because of P2’s inaction, and both IRB and CCM have
threatened to initiate criminal prosecutions against the
Company and D2 (exhibits LBP 23 and LBP 28). The
Company, once reinstated, will continue incurring penalties
from CCM and IRB for each year it does not file the requisite
documents. These penalties will not be incurred if the
Company is not reinstated.
17
The Law
[13] Section 555 of the Act reads:
"(1) Any person who is aggrieved by the decision of the Registrar to strike off
the company may, within seven years after the name of the company has
been struck off, apply to the Court to reinstate the name of the company
into the register.
(2) If the Court is satisfied that the company was at the time of the striking
off, carrying on business or in operation or otherwise that it is just that
the name of the company be reinstated in the register, the Court may
order that-
(a) the name of the company be reinstated; and
(b) give such directions and make such provisions as seem just for
placing the company and all other persons in the same position as
nearly as may be as if the name of the company had not been struck
off.
(3) Upon an office copy of the order is lodged with the Registrar, the
company shall be deemed to have continued in existence as if its name
had not been struck off.”
[14] Section 555 of the Act provides that the Court MAY make an order
to reinstate the registration of the Company if:
14.1 the applicant is a person who is aggrieved;
14.2 the application was made within 7 years after the company
has been struck off; and
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14.3 at the time of the striking off, the company was carrying on
business or in operation or otherwise that it is just that the
name of the company be restored to the register.
Findings of the Court
[15] The expression ‘person aggrieved’ would include a person who

was deprived of a legal right of value, or injured or damaged in a legal sense
by the striking out of the company from the register. In this case, it was not
suggested otherwise on behalf of CCM and D2 that P1 is not a ‘person
aggrieved’ or that the application was not brought within the stipulated time.
[16] In considering whether it is ‘just’ to make an order under s.555 of

the Act, I am of the respectful view that the Court should have regard to the
circumstances in which the Company came to be deregistered, whether
any person is likely to be prejudiced by the reinstatement, and whether there
are any matters of public interest for, or against, the making of an order for
e.g. it will not make commercial sense to reinstate a hopelessly insolvent
company; or as emphasized by CCM, good corporate governance should
not be subverted.
[17] In my assessment of the affidavits pertaining to the OS, I have

considered the approach of the Federal Court in Lori Malaysia Bhd v. Arab-
Malaysian Finance Bhd [1999] 3 MLJ 81, [1999] 2 CLJ 997 per Edgar
Joseph Jr FCJ:
“The Law on the approach of the Court of first instance in evaluating and
resolving a conflict of evidence on affidavit was well captured by the Privy
19
Council in Eng Mee Yong v. Letchumanan [1979] 2 MLJ 212 and in Tay Bok
Choon v. Tahansan Bhd. [1987] 1 MLJ 433. In the first of these cases - Eng
Mee Yong - Lord Diplock delivering the advice of their Lordships of the Board
said this (at p. 381 D):
Although in the normal way it is not appropriate for a judge to attempt to resolve
conflict of evidence on affidavit, this does not mean that he is bound to accept
uncritically, as raising a dispute of fact which calls for further investigation, every
statement on an affidavit however equivocal, lacking in precision, inconsistent
with undisputed contemporary document or other statements by the same
deponent, or inherently improbable itself may be.
In the second of these cases - Tahansan - Lord Templeman put the point more
shortly and generally, thus:
If allegations are made in affidavits by the petitioner and those allegations

are credibly denied by the respondent’s affidavits, then in the absence of oral
evidence or cross examination, the judge must ignore the disputed allegation.
(emphasis added)
The second point to note regarding this part of the case is that, it is an
elementary proposition sometimes overlooked with resulting confusion and
possible injustice that where statements are made by a deponent, based on
information and belief these ought not to be looked at all, unless the court can
ascertain not only the source of the information and belief but also unless the
deponent’s statement is corroborated by someone who speaks from his own
knowledge. (See, In re J.L Young Manufacturing Ltd. Co. [1900] 2 Ch. 753 754
per Lord Alverstone CJ, applied by the old Federal Court in Cantrans Services
(1965) Ltd. V. Clifford [1974] 1 LNS 14).”
[18] The onus rests upon P1 to show why reinstatement of the

Company should be made. In my respectful view, that she has not done.
20
[19] At the outset, I ought to say that on the facts of the present case, I
am in accord with the arguments canvassed by D2’s counsel as to why
reinstatement ought not to be granted and I adopt his submissions in these
grounds.
[20] I have considered P1's reasons for the application to reinstate the
Company, that it is necessary and important to ensure, inter alia, that the
Company can continue to run its business legally and also comply with the
Court Orders that have been granted and/or may be granted against the
Company including but not limited to:
(a) the Consent Order dated 28.09.2021 granted by the Kuala

Lumpur High Court vide Originating Summons No. WA-
24NCC-200-05/2021 (see “Exhibit WFL-2” at Enclosure 2,
pages 32 – 49); and
(b) any Order that may be granted against the Company via the
Divorce Proceeding.
[21] In my view, P1 has not provided evidence to show that the

Company was actually carrying on any business or in operation at the time
it was struck off even if these words are to be construed liberally.
[22] I find there is no evidence to show that P1's investigations or

discovery against the Company and its affairs would be impossible if the
Company is not reinstated. D2 in his various Affidavits did state that P1 is
welcome to inspect the Company’s records. P1's allegation that she has
‘consistently taken the position that she verily believes the Company is at
21
all material times, an active company (not dormant)’ is patently inconsistent

with her position in the Divorce Proceeding where she accepts that the
Company is dormant. The Divorce Proceeding trial has not even started.
That consideration, to my mind, compels me to conclude that this application
is premature. It may not, even IF D2 is subsequently found under a liability
that the shareholding and assets in the Company is a matrimonial asset, be
necessary to reinstate the defunct company to enable P1 to pursue her
claim against D2. Her claim remains intact. The assets and shareholding of
D2 in the Company can be valued in monetary terms but D2’s supposed
liability for division of matrimonial assets has yet to be determined. At any
rate, I am of the view that it is inappropriate to conflate any matrimonial
dispute with this application for reinstatement of the Company to the register
and bearing on why the Company was struck off in the first place.
[23] Her next reason is that the application is necessary so that the
Company can conduct further investigation and have ‘an option to take legal
action’ against third parties including D2 and the previous accountants in
view of P1's alleged discovery regarding discrepancies in the financial
affairs of the Company. I accept D2's argument that this is Not a sufficient
reason as she had ample opportunity to examine the Company’s records
and her Auditors in fact have produced a report. I agree that her stating she
wants “an option to take legal action” is not a statement of clear intention to
proceed with legal action, with no timeline for the filing of the action. This
calls into question whether such claims by her have any reasonable
prospect for success; and for all that, on the contrary in fact show that she
has no genuine belief in any alleged wrongdoing perpetrated by D2 or the
Company’s former auditors.
22
[24] As for the postulation that there were movement of funds in 2018,
this took place 3 years before the striking out of the Company by CCM. As
for the Company’s participation in the Inspection Proceeding and entry into
the Consent Order, this by itself does not show that Company had an active
business at the time. As regards instructing solicitors to write letters, this
mere fact does not indicate the carrying on of business. I find the cases cited
by the P2 to be distinguishable.
[25] Even if I am wrong, that these items posited by P1 constitute

‘activity’ in the carrying on of business, however I do not consider it just to
reinstate the Company. With respect, I find P1’s averments that it was the
malicious intention and conduct of D2 that led to the striking off of the
Company to be untenable. Such an accusation ought not to be assumed
without clear support for it. There is none before me. Rather, I find it was
P1’s refusal to sign the 2017 accounts that lead to the Company being
struck out. Juxtaposed against P1’s accusations of malicious intention on
the part of D2, I find D2's assertions of facts as to why it is unjust to reinstate
to be acceptable but were not addressed properly and were dismissed as
not relevant by P1.
[26] In my respectful view, the importance of compliance with the

obligation to lodge annual returns and financial statements, and the attitude
and conduct of those responsible for non-compliance is relevant for this
court to consider, see Unkovich v Commissioner for Corporate
Affairs (1986) 4 ACLC 502. More so, as the court is urged to exercise its
discretion.
23
[27] Noteworthy is the fact that D2 was prepared to transfer all his
shares in the Company to P1 for RM1. It is inherently implausible that if D2
was concealing any wrongdoing such as the siphoning of funds, it would be
irreconcilable with common sense and logic for him to offer full control of the
Company to P1 for such a nominal sum and in the process give her rope to
hang him. There is no lack of authorities on our shores including the Privy
Council case of Keng Soon Finance v MK Retnam Holdings Sdn Bhd &
Anor [1989] 1 MLJ 457 that the common sense approach can be applied to
achieve a just result in arriving at a decision.
[28] Whilst P1 was unwilling to purchase D2’s shares and take over the
Company until her ‘accountant had verified and audited the Company’s
accounting records’, it must not be overlooked that P1 has legal advisers at
all material times to advise her; and to address her concern for undisclosed
liabilities, boiler plate clauses could be agreed to provide for D2 to indemnify
P1. As such, I agree with D2's counsel that P1 could have signed the audited
accounts for FYE 2017 to enable the Company to comply with its regulatory
obligations first, and qualify her approval if necessary. The Audited financial
statements filed can still be challenged later and corrected if found to be
erroneous. This is not difficult to understand for in Soo Boon Siong [2008] 1
MLJ 27; [2008] 1 CLJ 365, the Court of Appeal held at [82] that neither the
Companies Act nor the principle of public policy prohibited a director from
challenging the very accounts that he may had signed under the provisions
of the Companies Act. Any other view to the contrary would mean that
audited accounts would be admissible as a matter of course and without
question merely because they had been signed by the directors and in so
doing, referred to Petlad Turkey Red Dye Works Ltd v Dyes & Chemical
24
Workers' Union, Petlad & Anor [1960] 2 SCR 906, an Indian Supreme Court
decision, which held:
“The mere fact that the statements were made can never be taken as proving
that the statements were correct. … There is no reason why an exception
should be made in the case of balance sheets prepared by companies for
themselves. It has to be borne in mind that in many cases the directors of the
companies may feel inclined to make incorrect statements in these balance
sheets for ulterior purposes. While that is no reason to suspect every
statement made in these balance sheets, the position is clear that we cannot
presume the statements made therein to be always correct. The burden is on
the party who asserts statement to be correct to prove the same by relevant
and acceptable evidence.”
[29] The Petlad decision was cited with approval by the Federal Court
in KPM Khidmat Sendirian Berhad v Tey Kim Suie [1994] 3 MLJ 1.
[30] Being a director of the Company, it is axiomatic that P1 has a duty

to ensure the financial statements are filed on time. Her statutory obligation
as a director to see to the lodgment of annual returns and financial
statements is not a grace for her at will to deign fit to bestow on the Company
and its shareholders. Here, despite that CCM was prepared to agree to the
reinstatement of the Company provided that an undertaking is given by the
Directors (P1 and D2) to have the accounts sorted out and to pay all
compounds/fees, P1 stared at the gift horse in the mouth. Her undertaking
in the course of proceedings to ‘have the company’s statutory records
(Annual Return and Audited Account) for the relevant period lodged with the
Companies Commission once a proper inspection and accounting of the 2nd
Plaintiff’s records have been conducted’ does not have a time limit. As
25
alluded earlier, neither was there an application to extend the time for
inspection under the Consent Order. Additionally, her auditors were able to
come up with a report based on the inspection already carried out. Little
surprise as such, that CCM thus insists now, that the Plaintiffs be ordered
by this Court to prepare the draft Annual Return and Audited Accounts for
year 2017 until present and to exhibit the same in a Supplementary Affidavit
before any order for reinstatement is made. In a case where striking off the
register was due to non lodgment of annual returns, this requirement by
CCM of such an undertaking is not without precedent, neither capricious nor
arbitrary as CCM is only performing its statutory functions - see Unkovich v
Cmr for Corporate Affairs (1986) 4 ACLC 502.
[31] Bearing in mind that registration of the Company was cancelled for
failure to lodge returns, P1 has not demonstrated to the Court that if
discretion is exercised to grant the application for reinstatement, that she
will assume her role and responsibilities as a director timeously. The fact
remains that it has been for nearly three years since the striking out that the
2017 annual returns are still not lodged. This is despite the fact that the
statutory obligations to do so is underscored by the criminal sanctions spelt
out in s.68 (9) and s. 259 of the Act.
[32] By s. 555(2) of the Act, the court may order reinstatement of

registration if satisfied that the company was at the time of the striking off
carrying on business or in operation or otherwise satisfied that it is just that
the name of the company be reinstated. In the present case the material
shows that the Company was not at the time of striking off carrying on
business. Nor is there anything to show it is business as usual.
26
[33] Even if all the prerequisites imposed by the section are satisfied,
this court nevertheless, has a discretion not to reinstate as the court ‘may’
order reinstatement. It is not obliged to do so as the word ‘may’ is
permissive. The contrary view has not been contended for. In my respectful
view, there is no basis for failing to give full force to the clear words of the
section. I see no reason why the court should not have a discretion in
consequence of the use of the word ‘may’. In the exercise of that discretion,
one of the considerations the court will have regard to is the potential
prejudice the restoration may cause to third parties.
[34] In the circumstances obtaining here, I find it will be unjust to

reinstate the Company and that there will be prejudice to D2 particularly
when parties are at loggerheads, and on the material before the court, I can
be forgiven for having entertained doubts that P1 will be able to co-operate,
such that once the Company is reinstated, it will not continue incurring
penalties from CCM and IRB for each year it does not file the requisite
annual returns. In this regard, D2 had to pay a RM5,000 fine to CCM due to
P1’s refusal to sign the 2017 accounts and both the IRB and CCM have
threatened prosecutions against the Company and D2. I am not convinced
that it is in the interests of the Company and of those who own or control the
Company (P1 and D2) that it ought to be restored to the register. Particularly
too when the court is satisfied that the failure to lodge documents which had
led to its striking off the register was the result of a deliberate and wilful
refusal to sign the same by P1.
[35] That is not all. Discretion must be exercised judicially and in

conformity with the purposes of the Act. As reminded by CCM, the inherent
27
power of the Court to reinstate the Company has to be used sparingly, and
cannot be exercised to override or to conflict with statutory obligations under
the Act to lodge the annual returns and financial statements. In my utmost
respectful view, reinstatement should be permitted only if an unjust result,
not remediable otherwise, would follow. That I find is not the case here.
[36] I should add that I do not consider that P1’s claim should be denied
by reason of any delay on her part in commencing action to assert her claim.
If it had appeared that reinstatement was necessary and useful in the
present circumstances, I would have granted her application. In my
respectful view, reinstatement would achieve nothing except further delay
its inevitable end, and the incurring of further penalties which are unlikely to
be recovered by the Company or D2.
[37] For these reasons, I declined to exercise discretion to make the

orders sought by the Plaintiffs. The inevitable result is that the OS must fail.
That being so, the OS is dismissed with costs to the Defendants.
[38] I have not addressed here each and every single argument and
case authority submitted by the parties to avoid a lengthy judgment. No
discourtesy was intended to counsel for the respective parties.
Date: 16th September 2023
- sgd -
….………………………..
Liza Chan Sow Keng
Judge
High Court of Malaya at
Kuala Lumpur
28
COUNSEL:
For the Plaintiffs : Douglas Yee (together with him, Ong Chern Yii and
Siew Choon Jern)
Messrs Douglas Yee
For 1st Defendant : Fadilah Abdul Wahab

Suruhanjaya Syarikat Malaysia (SSM) Kuala
Lumpur
For 2nd Defendant : Dhinesh Bhaskaran (together with him, Christal

Wong, John Heng and Jesryna Patel)
Messrs Y N Foo & Partners
CASES CITED:
Shobana a/p Perumal v Ganesh a/l Guna [2016] MLJU 1108
College Housing Co-operative Ltd. v Baxter Student Housing Ltd. (1976) 2

SCR 475 CanLII 164 (SCC)
Lori Malaysia Bhd v. Arab-Malaysian Finance Bhd [1999] 3 MLJ 81, [1999]
2 CLJ 997
Unkovich v Commissioner for Corporate Affairs (1986) 4 ACLC 502
Keng Soon Finance v MK Retnam Holdings Sdn Bhd & Anor [1989] 1 MLJ
457
Soo Boon Siong [2008] 1 MLJ 27; [2008] 1 CLJ 365
Petlad Turkey Red Dye Works Ltd v Dyes & Chemical Workers' Union,
Petlad & Anor [1960] 2 SCR 906
KPM Khidmat Sendirian Berhad v Tey Kim Suie [1994] 3 MLJ 1
STATUTE/LEGISLATION REFERRED:
Section 68, s. 259 and s. 555 Companies Act 2016

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WA-24NCC-659-05/2022 Kand.

IN THE HIGH COURT IN MALAYA AT KUALA LUMPUR

In the matter of LI MEDICAL SDN BHD

In the matter of Section 549 (and/or

In the matter of Order 1 rule 8, Order 88

1. DATO’ WONG FONG LENG

2. LI MEDICAL SDN BHD

2. LIM BOON PING

[3] The Company was registered on 10.11.2003 with business objects

[4] The Companies Commission of Malaysia (“CCM”), the 1st

551(2) of the Act was gazetted on 22.10.2021 in Government Gazette No.

The 1st Plaintiffs’ Case for reinstatement

[6] P1 alleged that:

6.1 She is an “aggrieved person” pursuant to s. 555 (1) of the Act

the Company’s status as “existing”. She contended that the

6.2.1 that the Company can continue to run its business

6.2.1.1 the Consent Order dated 28.09.2021

6.2.1.2 any Order that may be granted against the

6.3 the Company can conduct further investigation and have an

[7] P1 claims that the Company is carrying on business as:

7.2 The Company was actively defending itself in the Inspection

7.3 as of 1.12.2021, the Company was still being represented by

7.4 the term “carrying on business” and “in operation” ought to

[8] P1 postulated that it is just that the Company be reinstated to the

8.1 so that her claim for division of matrimonial assets in the

8.2 so as not to render impossible any investigations or discovery

[9] CCM took the position that:

9.1 it has a duty to ensure good corporate be practiced among

9.4 failure to prepare and lodge Annual Returns and Audited

9.5 if the application is not strongly objected by CCM and is

2nd Defendant’s objections to reinstatement

[10] The 2nd Defendant in essence argued that:

10.1 the Company was not carrying on business or in operation

10.2 it is not just for the Company to be reinstated.

(a) the Company’s business at the time of incorporation was the

(b) the Company had no business and was dormant after a

(e) the alleged movement of funds in 2018 and the Company’s

(f) the issuance of letters by YNF to P1’s solicitors (“DY’) was

[12] D2 asserted that it is unjust to reinstate the Company as:

12.1 P1 has an ulterior motive in filing the OS:

12.1.1 the OS was filed as part of her vendetta against D2,

(a) as P1 was reluctant to discharge her fiduciary

either wind-up the Company or transfer all his

(b) Both D2 and YLC have provided P1 with

(c) D2 has consistently asserted that P1 is ‘more

(d) YLC had also invited P1 to inspect the

(e) P1 could have easily signed the audited

12.1.2 the Orders sought by P1 shows she wants to punish

(a) P1 was made aware that D2 was fined

(b) P1’s conduct does not show she was genuine

reinstate the Company if P1 and D2 jointly

12.1.3 P1’s allegations are to be viewed with caution as

(a) she stated in para 13(d)(ii) of her defence in

(b) she accepts in the Divorce Proceedings that

(c) in her Affidavit in Support of the OS, she states

12.2 P1 has never been interested in the Company:

(b) although P1 claims that she ‘started to be extra

coupled with P1’s concession that she has no

(c) Even though P1 had full access to the Company’s

(d) even though D2 and YLC have voluntarily provided P1

12.3 There has been an inordinate delay in filing and prosecuting

12.4 There is no useful purpose served by reinstating the

(a) Reinstating the Company is an act of futility, as it will

(b) P1’s undertaking to fulfil the settlement conditions

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