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1. A statutory right provided for under the Companies Act 2016

Section 245(4) of the Companies Act 2016 (“CA 2016”) provides that:

“The records referred to in subsection (1) shall be kept at the registered office of the company or at such other place as the directors think fit, and shall at all times be open for inspection by the directors.” (Emphasis ours)

The above provision is in pari materia with Section 167(3) of the Companies Act 1965 (which was repealed and replaced by the CA 2016):

“The records referred to in subsection (1) shall be kept at the registered office of the company or at such other place in Malaysia as the directors think fit and shall at all times be open to inspection by the directors.” (Emphasis ours)

2. An ‘absolute’ right

In Low Ean Nee v SNE Marketing Sdn Bhd [2024] 1 MLJ 447 (“Low Ean Nee”), the Court of Appeal held that:

“Thus, the obligation of the company to allow inspection by its director is regarded as mandatory. And, being an ‘absolute’ right, a director is prima facie entitled to inspection and is not required to demonstrate any particular ground or ‘need to know’ as a basis. As such, the right to inspect remains extant so long as the right is exercised for the proper performance of the director’s duties to the company and not with a view to causing any detriment to the company.”[1] (Emphasis ours)

3. Exception: Inspection detrimental to the company

The Court of Appeal in Dato’ Tan Kim Hor & Ors vTan Chong Consolidated Sdn Bhd [2009] 2 MLJ 527 held as follows:

“[9] It is settled law that the defendant, having resisted the plaintiffs’ right to inspect the accounting and other records of the defendant, bears the burden of proving that the plaintiffs’ right is being, or will be, exercised for an improper purpose: Australian Metropolitan Life Assurance Co Ltd v Ure & Ors (1923) 33 CLR 199, per Isaacs J; and Wuu Khek Chiang George v ECRC Land Pte Ltd [1999] 3 SLR 65 CA, per LP Thean JA.

[10]  It is for the defendant to show ‘clear proof’ and to satisfy the court ‘affirmatively’ that the grant of the right of inspection would be for a purpose detrimental to the interests of the company. There must be a ‘real ground’ that the right would be abused and that substantial harm would be caused to the company thereby: Wuu Khek Chiang George.”[2] (Emphasis ours)

4. Not extinguished by director’s non-participation of the day-to-day affairs of the company

The Court of Appeal in Low Ean Nee relied on the High Court decisions of Dato’ Seri Timor Shah Rafiq v Nautilus Tug & Towage Sdn Bhd [2018] 8 MLJ 394 and Ho Yee Chin v Ho Min Hao & Ors [2016] MLJU 318 when it held the following:

“It is important to emphasise that a director’s non-participation of the day-to-day affairs of the company does not extinguish the director’s right to inspect the company’s documents.”[3] (Emphasis ours)

5. Not available to former directors

In Low Ean Nee, the Court of Appeal reiterated the legal proposition propounded by the Singapore Court of Appeal in Haw Par Bros (Pte) Ltd v Dato Aw Kow [1973] 2 MLJ 169:

“Since the decision of the Singapore Court of Appeal in Haw Par, the courts in Malaysia have consistently applied the principle alluded to earlier (p 170 (MLJ)) — an ex-director is not entitled to seek the aid of the court for an order of inspection.”[4] (Emphasis ours)

Disclaimer: The contents of this article are intended for information dissemination and academic discussion only and should not be construed as legal advice on a specific set of facts or circumstances. Should you require legal assistance, you may contact us via email (liti@pelim.my) or via WhatsApp/telephone call (+6011-5672 7813).


[1] Low Ean Nee v SNE Marketing Sdn Bhd [2024] 1 MLJ 447 (CA), at para 41

[2] Dato’ Tan Kim Hor & Ors vTan Chong Consolidated Sdn Bhd [2009] 2 MLJ 527 (CA), at paras 9-10

[3] Low Ean Nee v SNE Marketing Sdn Bhd [2024] 1 MLJ 447 (CA), at para 51

[4] Low Ean Nee v SNE Marketing Sdn Bhd [2024] 1 MLJ 447 (CA), at para 66