Many assume that being a minority shareholder means having no power. In truth, you have the right to access company financials, attend annual general meetings (AGMs), and vote on major decisions. You also have the right to protect your interests if directors or partners act dishonestly. These rights are protected under the Companies Act 2016. Don’t let your rights be quietly trampled.
What Does “Betrayal by a Partner” Mean?
In corporate law, betrayal doesn’t always look dramatic. It could mean your partner secretly uses company money for personal gain, exploits company information to start a private venture, or makes key decisions without consulting shareholders. This breaches fiduciary duties under Section 213 of the Companies Act. If you stay silent, the losses could grow — for you and the company.
Early Warning Signs Your Partner Is Hiding Something
Red flags often appear early — AGMs are never called, financial reports go missing, and unexplained fund transfers start showing up. If something seems off, you have the right to request official documents for review. The longer you wait, the higher the financial risk.
What Legal Action Can You Take?
You can file a derivative action to sue on behalf of the company, report fiduciary breaches to the Companies Commission of Malaysia (SSM), or apply for a court injunction to stop further harm. With strong evidence and legal advice, your case becomes stronger. Don’t wait until more damage is done to fight back. Don’t forget to contact Liyana & Co. if you need help !
When a Shareholder Fought Back and Won
In one well-known case, a shareholder sued a company director for misusing company assets for a personal business. The court ruled in favor of the shareholder and ordered the director to pay damages. This proves that shareholders can fight back — and win. If they can do it, so can you.
Gas Logistics Sdn Bhd v Gas Metals Sdn Bhd & Ors (Not the Real Name)
In this case, the court found that the directors had systematically transferred company assets to a competing entity that they controlled, with the intention of enriching themselves. The court held that such conduct constituted a serious breach of fiduciary duty and ordered the directors to pay compensatory and exemplary damages to the company.
Protect Yourself Before It’s Too Late
A solid shareholders’ agreement is your first line of defense. Set clear terms for decision-making, exit options, and information access. Trust is important in business, but unchecked trust can be dangerous. Your rights won’t defend themselves — you have to.
Legal Problems? Leave It to the Experts.
With over 12 years of experience in legal practice, we’re ready to guide you with strategic and effective solutions. Don’t wait until it’s too late — contact us today for the legal advice you need.
