One of the proposals is to allow statutory derivative action which enables minority shareholders to bring action on behalf of the company in situations where the company does not take any action because the person who is to be sued controls the company, and prevents, or is able to prevent the company from suing him.
This is a long overdue measure to protect the interest of minority shareholders which 
should be in place even before the 1997 Asia Economy Crisis. I don’t see any CEOs or directors who blatantly making huge fortunes for himself/herself leaving the companies to rot being prosecuted in Malaysia business history. On contrary these untouchable individuals were being rewarded with golden hand-shake when the crisis hit causing the companies unable to survive – some companies were being forced to de-listed due to huge losses with minority shareholders left with the only shirt on their bodies.
Some classic example of companies where the former directors were flushing companys’ money as if they own a money-printing machines are United Engineering Malaysia (UEM), Renong Berhad (defunct), Malaysian Resources Corporation Berhad (KLSE :
MRCB, stock-code 1651), Rashid Hussan Berhad (KLSE : RHB, stock-code 1309), Technology Resources Industries Berhad (defunct), Malaysia Airline System Berhad (KLSE : MAS, stock-code 3786) and many more.-
What if the director(s) the minority shareholder(s) is suing counter-sue instead? Just like the case of Tajudin Ramli who counter sues Danaharta, the Malaysian Government and several other companies for RM13.46 billion. What other protection does a whistle-blower has in Malaysia business scene? None, I’m afraid.
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What if the director(s) the minority shareholder(s) is suing has strong political connection or influence? Try to sue the previous director of Malaysia Airline System Berhad whose position is now being taken by Idris Jala for mismanagement and you’ll know what I mean.
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Can the minority shareholder(s) sue a former director of the company which created the mess previously?
# TIP: According to the CEO, CCM welcomes feedback at http://www.ssm.com.my/. You might want to send email on any suggestion – the website does not have English-version though.
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January 6th, 2007 by financetwitter
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Mr, Tube
You have a lot of ‘historical’ knowledge. I think you are very experienced investor. Are you analyst or fund manager before? I am impressed by your article. Enjoy. 🙂