Case Background & Strategy

Main Content

When the wrongdoers ARE the company’s leadership, who sues them? In Malaysia, the answer is the statutory derivative action. NZSK Legal — led by Khoo Ai Theng — has guided minority shareholders through this technical procedure.

When to Use a Derivative Action vs Oppression Petition

Derivative actions remedy wrongs done to the COMPANY (e.g. director self-dealing, breach of fiduciary duty, misappropriation of corporate opportunity). Oppression petitions remedy wrongs done to YOU as a shareholder personally (e.g. exclusion, dilution). Many cases involve both NZSK Legal’s commercial litigation team selects the right vehicle, or both.

The Section 348 Leave Requirements

Requirement 1: Good Faith

The complainant shareholder must be acting in good faith not to pursue personal vendettas or extract settlement value. NZSK Legal builds the good faith record through proper notice procedures and documented attempts at corporate remedy.

Requirement 2: Prima Facie Case

The proposed action must show a prima facie case against the wrongdoers sufficient evidence that, if accepted, would establish liability. Lawyer Khoo’s team coordinates evidential preparation including forensic accounting where asset misappropriation is alleged.

Requirement 3: In the Company’s Interests

The derivative action must be in the company’s commercial interests, not just the complainant’s. Where the company is solvent and has prospects of recovery, this is straightforward. Where the company is failing, careful analysis is required.

Requirement 4: 30-Day Notice

Section 348(2) requires 30 days’ notice to directors before applying for leave, giving the company opportunity to bring the action itself. NZSK Legal handles the proper service and waiting period.

Why NZSK Legal for Derivative Actions

Derivative actions are technically demanding leave applications, complainant pleadings, the company’s own status as nominal defendant, conduct-of-the-action orders. Lawyer Khoo Ai Theng’s commercial litigation experience in Selangor and KL High Courts ensures procedural precision.

Frequently Asked Questions

Q: What is a statutory derivative action in Malaysia?

A: A court-sanctioned procedure under sections 347-350 CA 2016 allowing minority shareholders to sue on behalf of the company where wrongdoers control the board. NZSK Legal handles leave applications and substantive derivative claims.

Q: When should I file a derivative action vs oppression petition?

A: Derivative action for wrongs done to the company (director self-dealing, breach of fiduciary duty). Oppression petition for personal wrongs against you as a shareholder. Often both apply — NZSK Legal advises on selection.

Q: How do I get leave to bring a derivative action?

A: Section 348 requires good faith, prima facie case, in the company’s interests, and 30-day prior notice to directors. NZSK Legal prepares leave applications meeting all requirements.

Q: Who pays for a derivative action?

A: The complainant shareholder funds the action initially. The court can order indemnity by the company under section 350 in appropriate cases. NZSK Legal advises on funding structures.

Q: Can directors block a derivative action?

A: No, where the leave threshold is met. The whole point of derivative action is to bypass wrongdoer directors. The court grants leave and supervises the action.

Contact Block

📞 Call Lawyer Khoo Ai Theng / NZSK Legal: +60 3 8604 6580

💬 WhatsApp: +6016-557 4789

📧 Email: [email protected]

📍 Puchong (Selangor) | Mont Kiara (Kuala Lumpur)