What Company Documents Are Available for Inspection and What Is The Procedure For Said Inspection

Directors, shareholders, and members of the public are given powers to inspect various company documents. This will be discussed below.

Note that there are circumstances where the shareholders are also directors of the company. In such cases, the shareholders will enjoy the directors’ right of inspection besides their own, i.e. they will enjoy broad powers of inspection. Conversely, where the shareholders are not directors themselves, they will only enjoy shareholders’ right of inspection, i.e. have limited powers of inspection.

A. Shareholders’ right of inspection

1. Company documents which shareholders are entitled to inspect

Shareholders’ access to company documents is limited to statutory registers of the company, i.e. registers which the company is compulsorily required to have under the Companies Act 2016 (“CA 2016”)[1]. They are as follows:

1. Register of members

As provided under Section 55 of the CA 2016, shareholders are entitled to inspect the register of members without charge[2]. Shareholders may request the company to furnish a copy of the register upon the payment of RM10 or less (as fixed by the company) for every 100 words or fractional part of the register to be copied. However, the copy is only limited to information on members’ names, addresses, number of shares held, and amount paid on shares[3]. If the member is a corporation, it will contain the corporate name and registered office of the corporation[4]. The company must then send a copy of the register to the requesting shareholder within 21 days from the day the company receives the request.[5]

Any company and officer who fails to comply with the above requirements shall, on conviction, be liable to a fine of RM10,000 or less. In the case of a continuing offence, be liable to a further fine of RM500 or less for each day the offence continues after conviction.[6]

2. Register of directors, managers and secretaries

Pursuant to Section 57 of the CA 2016, shareholders are also given the power to inspect the company’s register of directors, managers and secretaries without charge[7]. The said register should contain (a) in respect of a director, his name, residential and service addresses, business occupation, date of birth, identity card number (or passport particulars) and particulars of any other directorships of public companies or subsidiaries of public companies held by the director; and (b) in relation to managers and secretaries, his name, identity card number (or passport particulars), residential and business addresses, and other occupation (if any).[8]

Any company and officer who contravenes the above shall, on conviction, be liable to a fine of RM10,000 or less. In the case of a continuing offence, be liable to a further fine of RM500 or less for each day during which the offence continues after conviction[9].

3. Register of directors’ interests in the shares in and debentures of the company or its related company

Section 59 of the CA 2016 states that shareholders can also inspect the register of directors’ interests in the shares and debentures, including his rights and options to shares in or debentures of the company or a related corporation[10]. They will not be charged for such an inspection[11]. A shareholder may, upon the payment of RM20, request the company to furnish him with a copy of the register and the company must deliver the copy within 21 days from the day on which the company received the request.[12]

Note that at the commencement of a public company’s annual general meeting (“AGM”), the said register will also be produced to all attendees of the meeting and be kept accessible throughout the meeting. [13]

Any company and officer that contravenes the above will, on conviction, be liable to a hefty fine of RM500,000 or less or to imprisonment of not more than 10 years, or to both, and in the case of a continuing offence, to a further fine not exceeding RM100,000 for each day during which the offence continues after conviction.[14]

4. Register of debenture holders (if any)

Where a company issues debentures that are not transferable by delivery, the company shall keep a register of debenture holders[15]. Pursuant to Section 60 of CA 2016, this register can be inspected by registered debenture holders and shareholders[16] upon (a) the request of a copy of or any part of the register by every registered debenture holder and shareholder in the company; and (b) a payment of RM5 for every page of the register required to be copied[17]. The copy will contain the debenture holders’ names and addresses, and the debentures held by them[18].

Moreover, the copy must be forwarded to the requesting debenture holder or shareholder within 30 days after the request is made[19]. Any company or officer who fails to do so or refuses the inspection will commit an offence and on conviction, be liable to a fine of not more than RM20,000. In the case of a continuing offence, a further fine of not more than RM1,000 per day during which the offence continues after conviction[20].

5. Register of substantial shareholders

Section 144 of the CA 2016 provides that shareholders can inspect the register of substantial shareholders without charge[21]. The register contains the substantial shareholders’ names, nationalities, addresses, and full particulars of voting shares in which the substantial shareholders have an interest and the reasons by which the substantial shareholder has the interest (unless the interest cannot be related to a particular share)[22].

Any company and officer who refuses such inspection commits an offence[23]. On conviction, will be liable to (a) in the case of a natural person, a fine not more than RM50,000 or imprisonment not more than 3 years or both; or (b) in the case of a person other than an individual, a fine not exceeding RM50,000. This is stipulated in Section 588(2) of the CA 2016[24].

6. A copy of every director’s service contract

Pursuant to Section 233 of the CA 2016, every director’s service contract with the company can be inspected – in the case of a public company having share capital, by shareholders holding at least 5% of the total paid up capital.; or in the case of a public company not having share capital, by at least 10% of members[25]. Shareholders are entitled to a copy of a director’s service contract upon (a) a request for the same directed to the company; and (b) payment of a prescribed fee[26]. The copy will then be provided within 7 days from the date that the company received the request[27].

An officer who refuses the inspection of the director’s service contract commits an offence and on conviction, will be liable to a fine of not more than RM250,000[28]. The court may also order an immediate inspection or direct that the copy be sent to the person requesting for it[29].

7. Register of charges

As provided in Section 362 of the CA 2016, upon the payment of a fee for the sum of RM5, shareholders are entitled to inspect the register of charges[20] which will contain all charges affecting the company’s property and floating charges on the company’s undertaking and property, including a short description of the property charged, the amount of the charge and names of persons entitled to the charge[31].

A copy of any instrument of charge or debenture shall be provided to a shareholder upon (a) an application to the company; and (b) payment of not RM10 or less (as fixed by the company) for every page of the copy of instrument. The copy must be furnished within 3 days from the making of the application[32].

The company and officer who fails to comply with the abovementioned commits an offence and shall, if convicted, be liable to a fine of not more than RM50,000. In the case of a continuing offence, a further fine of not more than RM500 per day during which the offence continues after conviction[33].

8. Records of resolutions and meetings

Section 342 of the CA 2016 states that the following records are available for inspection by company shareholders without charge[34]: (a) resolutions of members passed otherwise than at the meeting of members; (b) minutes of proceedings of meeting of members; and (c) details of decisions of a sole member (which has the effect as if agreed by the company in a meeting of members)[35]. These records must be kept for 7 years from the date of the resolution, meeting or decision[36].

Shareholders will only be entitled to a copy of minutes of proceedings of meeting of members after making a written request to the company at a charge of RM2 or less (as fixed by the company) for every 100 words. Shareholders must be supplied with the copy within 14 days after making the written request to the company[37].

Any company and officer who fails to comply with the above commits an offence and on conviction, will be liable to a fine of RM10,000 or less. In the case of a continuing offence, a further fine of RM500 for each day the offence continues after conviction[38].

9. Financial statements and reports

Pursuant to Section 257 of the CA 2016 and Satishchandre Pravinchandre Keval Chand Doshi v Rainbow Paradise Beach Resort Berhad [2022] 1 LNS 1290 (“Satishchandre Pravinchandre”), the company has a duty to send a copy of its financial statements and reports for each financial year to the company’s shareholders[39]. Section 258 stipulates that these company documents must be sent out: (a) for a private company, within 6 months before the financial year ends; or (b) for a public company, at least 21 days before its AGM[40] or less than 21 days if agreed upon by all members of the company entitled to attend and vote at the AGM[41]. If these company documents are not delivered, the relevant shareholder may make a request to be furnished with such documents and he will not be charged for it[42].

The company and every officer who fails to comply with the above shall, if convicted, be fined with an amount of not more than RM50,000[43].

2. Shareholders have limited right of access to company documents

Shareholders have limited inspection rights because apart from the above, shareholders do not have any right to request for the minutes of directors' meetings or the company’s accounting records. For instance, in Satishchandre Pravinchandre, the court held that the accounting documents (such as management reports, bank statements, journals, ledgers, invoice listings, creditors’ statements, laundry, building maintenance, insurance policies, operational licences) requested by the Plaintiff shareholder exceeded what he is legally entitled to as a shareholder of the Defendant company. The court further provided reasonings for such:

“[21] Under the Companies Act 2016 (“CA 2016”), a shareholder has very limited rights of access to the records of the company. To my mind, this is in line with the principle that the business and affairs of the company shall be managed by, or under the direction of the [directors]. The [directors have] all the powers necessary for managing and for directing and supervising the management of the business and affairs of the company. (See section 211 of CA 2016).

[22] Generally, neither a shareholder nor the Court ought to interfere in the management of the company…”

Thus, shareholders are only given limited right of inspection in relation to company documents. However, pursuant to Section 346(1) and (2) of CA 2016 (previously Section 181 of Companies Act 1965 (“CA 1965”)), shareholders may still be entitled to inspect the company's records if it can be shown that inspection is necessary on grounds that (a) the company’s affairs are being conducted or the directors’ powers are being exercised oppressively against the shareholder(s); or (b) that some act of the company was done or is threatened which unfairly discriminates against or is prejudicial to the shareholder(s)[44].

B. The public’s right of inspection

The public are entitled to inspect certain statutory registers of the company, namely: (a) Register of members; (b) register of directors, managers and secretaries; (c) register of directors’ interests in shares and debentures; (d) register of substantial shareholders; (e) register of charges. These have been discussed above.

Generally, the procedure to inspect these company documents is similar to that of shareholders, with the major difference being the amount of fee to be paid for such inspection which are as follows:

Company documents	Prescribed fee for inspection by members of public
Register of members	RM10 or less (fixed by the company)
Register of directors, managers and secretaries	RM10 or less (fixed by the company)
Register of directors’ interests in shares and debentures	RM20 or less (fixed by the company)
Register of substantial shareholders	RM10 or less (fixed by the company)
Register of charges	RM10 or less (fixed by the company)

C. Directors’ right of inspection

1. Right to inspect the company’s accounting records

To allow directors to fulfil their responsibility of managing the business and affairs of the company, they are given similar right of inspection as shareholders and also power to inspect the company’s accounting records. The latter is provided in Section 245(4) of the CA 2016 (previously Section 167(3) of CA 1965), which states:

“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.”

This right of inspection is said to be “absolute” because it can be exercised by directors without having to justify why they need such access. Such was affirmed in Dato’ Tan Kim Hor & Ors v Tan Chong Consolidated Sdn Bhd [2009] 2 MLJ 527 (“Dato’ Tan Kim Hor”), where Low Hop Bing JCA, in delivering the judgment of the Court of Appeal, propounded that:

“[11] There is no burden on the plaintiffs as directors to show any particular reason for their request for inspection. This will ordinarily be assumed: Molomby v Whitehead & Australian Broadcasting Corp (1985) 63 ALR 282; and Wuu Khek Chiang George.”

His Lordship had also cited with approval a Singapore Court of Appeal case of Wuu Khek Chiang George v ECRC Land Pte Ltd [1999] 3 SLR 65 and stated as follows:

“[16]The relevant established principles have been succinctly stated by the Singapore Court of Appeal in Wuu Khek Chiang George. There, the appellant, a director of the respondent, took out an application under s 199 of the Singapore Companies Act (equipollent to our s 167) for an order requiring the respondent to inspect its accounting and financial records. The High Court judge dismissed the application. After reviewing a long line of authorities, the Court of Appeal allowed the appellant's appeal and held, inter alia, that:

1. the right of a director of a company to inspect its accounting and other records is a right existing at common law and is recognised in s 199 of the Companies Act. Such right is a concomitant of the fiduciary duties of good faith, care, skill and diligence which the director owes to the company, and as such, like other rights and powers, must be exercised for the benefit of the company. The obligation of the company to allow inspection by its director is mandatory;
2. this right has been described as being 'absolute'. A director is prima facie entitled to inspection and is not required to demonstrate any particular ground or 'need to know' as a basis: Molomby. 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, it is in that sense 'absolute': see eg, Dato Aw Kow v Haw Par Bros (Pte) Ltd [1972] 2 MLJ 225; [1972–1974] SLR 391, Haw Par Brothers v Dato Aw Kow [1973] 2 MLJ 169; [1972–1974] SLR 183; Leong Sun Wing v Wah Hup Engineering Works Sdn Bhd (No 2) [1977] CSLR VII [1003]; Molomby; Welch & Anor v Britannia Industries Pte Ltd [1993] 1 SLR 673; Edman v Ross (1922) 22 SR (NSW) 351; and Conway & Ors v Petronius Clothing Co Ltd & Ors [1978] 1 All ER 185; [1978] 1 WLR 72;
3. there is no residual discretion in the court to refuse inspection. Where the court bars a director from exercising his right of inspection, it is not in fact exercising a residual discretion, but is in such an event satisfied on the basis of the evidence before it that the director's intention is to use the information obtained for ulterior purposes such as with a view to causing detriment to the company and that the director is thus abusing the confidence reposed in him; Berlei Hestia (NZ) Ltd v Fernyhough [1980] 2 NZLR 150 per Mahon J;
4. the right of a director to inspect the books and records of the company flows from his office as a director and enables him to perform his duties as a director. The corollary of this is that the right will be lost where it is exercised not to advance the interests of the company but some other ulterior purpose to injure the company: Edman v Ross, Molomby; Deluge Holdings Pty Ltd & Anor v Bowlay & Ors [1991] 9 ACLC 1486; Welch & Anor; Re Geneva Finance Ltd (Receiver and Manager Appointed) (1992) 10 ACLC 668; and Paul Nicholson lwn Faber Medi-Serve Sdn Bhd dan lain-lain [2002] 1 MLJ 355.”

The above judgment highlights in very clear terms the rationale for this absolute right in ensuring that directors are able to discharge their duty. It has subsequently appeared in the more recent High Court cases of Loh Teck Wah v Lim Pang Kiam & Ors and other applications [2022] 12 MLJ 342 (“Loh Teck Wah”) and Dato’ Seri Timor Shah Rafiq v Nautilus Tug & Towage Sdn Bhd [2018] 8 MLJ 394 (“Dato’ Seri Timor”).

In Dato’ Seri Timor, Mohd Nazlan J (as His Lordship then was) added that if the company imposed conditions on the directors’ right to inspect corporate accounting records, it will be contrary to such absolute right:

“[27] It would be a complete misconception of the true meaning of the directors’ inspection rights if the company seeks to qualify the exercise of such inspection right. It would thus be wholly unwarranted for a company to demand as a condition permitting inspection for the requesting director to execute a non-disclosure or confidentiality agreement precisely by reason of the trite legal position that the director’s fiduciary duties to the company already impose strict duties against any infringement of confidentiality or injury to the company.”

Any company or director who inhibits or disallows a requesting director from inspecting accounting documents will amount to an offence and attract the application of Section 245(9) of the CA 2016. If convicted, they may liable to a fine of not more than RM500,000 or imprisoned for not more than 3 years or both.

On the other hand, if a director fails to undertake the inspection when he has reason to be suspicious (or reasonably believes that there is such reason) of the management of the company’s finances, he may be exposed to charges on breach of fiduciary and/or statutory duty as a director to the company[45].

2. Exception to the “absolute” right to inspect accounting records

Directors’ right to inspect accounting records can be challenged and denied if one can show improper purpose on the director’s part and that 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. This was proffered by the Court of Appeal in Dato’ Tan Kim Hor in the following passages:

“[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.”

Additionally, it was held in Dato’ Seri Timor and Loh Teck Wah that there must be more than a mere possibility (i.e. there must be “real ground(s)”) that the right of inspection would be abused[46].

The application of the above principles is aptly demonstrated in the case of Low Ean Nee v SNE Marketing Sdn Bhd [2022] MLJU 1002. Low Ean Nee (“LEN”) was the plaintiff director while SNE Marketing Sdn Bhd was the defendant company (the “Company”). LEN requested for the Company’s documents which included the management accounts, all resolutions of the board of directors, general ledgers, profit and loss accounts and balance sheets of the defendant for the financial years 2016 to 2019. The Company did not provide said documents. The High Court held that the Company’s refusal to allow LEN’s right of inspection over the company documents was justified because LEN’s request was made for an improper purpose on the following grounds: (a) LEN had used the documents to expose the Company to unnecessary litigation; (b) although the documents were available to LEN at all times, she had never shown any interest in the documents or in the business of the defendant; (c) LEN refused to provide an undertaking that she will not use the documents for any purpose which would be detrimental to the company’s interest. Moreover, the court found it inconceivable that the documents are required to assist LEN in her duties because: (a) she was hardly involved in the company’s business; and (b) she was not interested in participating in the company’s management.

These principles were similarly applied in Liaw Yeou Huah v Wong Kee Kian & Ors [2016] MLJU 1589, per Mohd Nazlan JC (as His Lordship then was). The plaintiff director Liaw Yeou Huah’s (“LYH”) request for accounting and financial records of the third defendant company (the “Company”) was denied by the defendants who were also directors of the Company. As a result, LYH alleged that he was unfairly refused of his right of inspection and this was a form of oppression. This became one of the grounds to support LYH’s claim for relief under Section 181 of CA 1965. The High Court referred to several cases, including the English Court of Appeal case of Oxford Legal Group Ltd v Sibbasbridge Services Plc and Another [2008] EWCA Civ 387 and stated that:

“[79]…if it is clearly shown that a director was using the right to inspect for an improper purpose, the Court has no power to assist him to obtain access. The Court could thus not facilitate the right be invoked for a purpose for which it was not conferred. Conversely it is not open to the Court to refuse its assistance if it has no reason to believe that the applicant director is using the right to inspect for an improper purpose.”

The court then held that the defendants refusal to allow LYH’s right of inspection or request of make copies of the company records was justified because: (a) LYH intended to use the information, not to advance the interest of the Company, but for his own private and improper purpose of obtaining information on the Company’s financial position to facilitate his efforts of selling his shares to the Company; and (b) LYH was hardly considered as one who is interested in the Company’s operations.

Thus, directors’ can be deprived of their absolute right to inspect the company’s accounting records if it falls under the above situations.

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[1] Satishchandre Pravinchandre Keval Chand Doshi v Rainbow Paradise Beach Resort Berhad [2022] 1 LNS 1290.
[2] Companies Act 2016 (Act 777) (Malaysia), S. 55(1).
[3] S. 55(2).
[4] S. 50(1)(a).
[5] S. 55(2).
[6] S. 55(5).
[7] S. 57(3).
[8] S. 57(1) & (7).
[9] S. 57(6).
[10] S. 59(1) & (7).
[11] S. 59(7).
[12] S. 59(8).
[13] S. 59(10).
[14] S. 59(13).
[15] S. 60(1).
[16] S. 60(3).
[17] S. 60(5).
[18] S. 60(3).
[19] S. 60(8).
[20] S. 60(8) & (9).
[21] S. 144(2).
[22] S. 144(1) & S. 137(2).
[23] S. 144(5).
[24] S. 588(2).
[25] S. 233(1)(a).
[26] S. 233(2).
[27] S. 233(3).
[28] S. 233(4).
[29] S. 233(5).
[30] S. 362(4).
[31] S. 362(3).
[32] S. 362(4) & (5).
[33] S. 362(6).
[34] S. 342(3).
[35] S. 341(1).
[36] S. 341(2).
[37] S. 342(4).
[38] S. 342(5).
[39] S. 257(1)(a); Satishchandre Pravinchandre Keval Chand Doshi v Rainbow Paradise Beach Resort Berhad [2022] 1 LNS 1290.
[40] S. 258(1).
[41] S. 258(2).
[42] S. 257(3).
[43] S. 257(4) & S. 258(3).
[44] S. 346(1) & (2); Satishchandre Pravinchandre Keval Chand Doshi v Rainbow Paradise Beach Resort Berhad [2022] 1 LNS 1290.
[45] Dato’ Seri Timor Shah Rafiq v Nautilus Tug & Towage Sdn Bhd [2018] 8 MLJ 394; Law Wai Duen & Anor v Boldwin Construction Co. Ltd. & Ors [2001] 4 HKC 403.
[46] Loh Teck Wah v Lim Pang Kiam & Ors and other applications [2022] 12 MLJ 342; Dato’ Seri Timor Shah Rafiq v Nautilus Tug & Towage Sdn Bhd [2018] 8 MLJ 394.