}

6 May 2019

Mohamed Zahid Yon bin Mohamed Fuad v Jason Lo & Ors

The High Court, in the case of Mohamed Zahid Yon bin Mohamed Fuad v Jason Lo & Ors, was required to interpret the phrase "more than half of such members" in section 291(1) of the Companies Act 2016 (“CA 2016”).

In a nutshell, the High Court has held, inter alia, that "more than half of such members" in section 291(1) of CA 2016 must be read as meaning "more than half the number of shareholding of the members and not more than half the number of the members".

Background

The plaintiff held 40% of the shareholding of the fifth defendant company and the second defendant held the remaining 60%. The second defendant subsequently signed a members' written resolution to appoint the first defendant as an additional director of the fifth defendant which the plaintiff, who did not sign the members' resolution, claimed was invalid.

Section 291(1) of CA 2016 stipulates that an ordinary resolution is to be passed by a simple majority of "more than half of such members … who are entitled to vote on a written resolution". The plaintiff contended that the provision requires more than half the number of members.

Decision

The court referred to section 293(1)(a)(i) of the CA 2016 which provides that "in the case of a company having a share capital … on a vote on a written resolution, every member shall have one vote in respect of every share or stock held by him …".

Accordingly, based on the reading of sections 291(1) and 293(1)(a)(i), the court held that "more than half of such members" in section 291(1) of CA 2016 must be read as meaning "more than half the number of shareholding of the members and not more than half the number of the members".

 

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