Assignment:
Sky Sdn Bhd is a company in Puchong, Selangor. It manufactures automotive spare parts. The company has four directors: Henry, Neo, Louis and Za.
Henry and Neo has 35% shares each and Louis holds 20%. Za holds the remaining 10% of shares. All the shares carry one vote each.
The company’s articles of association contain the following provisions:
i. Any member who intends to transfer shares shall inform the directors who will take the said shares equally between them at fair value.
ii. All payroll services required by the company will be exclusively supplied by Louis through his own company Louis Tomlinson Sdn Bhd
iii. Disputes between the company and its members shall be referred to arbitration.
iv. All members of the company agree that the articles of the company cannot be altered.
Recently there have been serious disagreements between all the directors with regard to management of the company’s business.
You are to advise the parties on the following in the context of Malaysian Companies Act 1965:
a) Za has become disillusioned with the company and wants to sell his shares to the directors but they have refused to purchase them.
b) The directors have passed a resolution to contract with Bayar Gaji Sdn Bhd for all Sky’s payroll needs. With the passing of this resolution, the company is no longer using the service of Louis Tomlinson Sdn Bhd.
c) Henry has backed out of selling property he owns to Neo, and Neo wishes to sue him but Henry insisted that they have to refer the dispute to arbitration.
d) Neo is considering proposing a resolution to alter the articles but is frustrated at the company’s inability to change the articles of association.