18/09/2026
JUDGMENT AGAINST DIRECTOR PERSONALLY UNDER SECTION 540 OF THE COMPANIES ACT 2016
6 YEARS. ONE IMPORTANT JUDGMENT.
Today, we finally obtained judgment in a case pursued under Section 540(1) of the Companies Act 2016 against a director behind a well-known retail reflexology business.
The Court found that the director was the controlling mind and key decision-maker of the companies, and that despite knowing the financial complaints could be substantiated, he continued to incur debts while representing that a strategic investor would be secured.
Most importantly, the Court held that the director had acted with the intention to defraud.
The result: personal liability without limitation for more than RM1.127 million, together with 5% interest and RM35,000 in costs.
After six years of litigation, this judgment is an important reminder that the protection afforded by a company is not a licence to incur debts dishonestly.
Where fraudulent trading is established, Section 540 allows the Court to impose personal liability on the individuals responsible.
A long road, but a meaningful result for our client.