Shareholders' rights and remedies in Malaysia

• Main Author: Salim, Mohammad Rizal
• Published: Lancaster University 2005
• Subjects: 340
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.560579

This thesis investigates the laws on shareholders' rights and remedies in Malaysia from a comparative perspective. Law is given a broad meaning which gives this research a multidisciplinary character. British colonial business interests resulted in the transplantation of Malaysia's corporate and other commercial laws; this transplantation process continues in the post-colonial period due to the desire to conform to internationally recognised norms and standards and the lack of local innovation. The interaction of the transplanted laws with institutions and other elements in the local setting creates gaps between the law-in-the-books and law-in-action. In particular, the transplanted governance regime which focuses on the director-shareholder agency problem is inappropriate for an environment where controlling shareholders created the largest agency problems. Malaysians are also reluctant to seek redress through the official legal system (again a product of transplantation) for cultural, historical, political and economic factors. The poor quality of the legal institutions, access to court issues, poor public governance and the abdication of the judiciary of its' duties to protect individual rights vis-a.-vis the state further compromised the value of the law-in-the-books. These are compounded by the uncritical and often inappropriate reliance to case laws of other Commonwealth countries, and the general apathy of the judiciary to the rights of shareholders. In conclusion, it is argued that the law-in-the-books may appear to provide adequate protection to shareholders; however the value of the law must be examined in a larger perspective. The administration and implementation of the law as well as a healthy respect for the rule of law is as important as the substantive law itself.