Malaysian Dairy Industries case

The recent major company law case over the past few days has been the Thio Keng Poon case where the founder of Malaysian Dairy Industries (MDI), a major milk distributor, sued his wife and children for removing him from his post of managing director.

Although this wife and children own the majority of the shares in the company and other family companies, he is claiming that he controls the shares until he dies, and that his family is therefore not allowed to use his shares to remove him. This raises issues of trust law - whether there is a trust over the shares with Thio Keng Poon having the life beneficial interests, and his family being merely trustees of this life interests (and therefore having restrictions on what they can do with the shares).

The family is claiming that he breached his directors' duties by double claiming for his travel expenses. If these allegations are true, they would at the very least be offences under the Companies Act or the Penal Code. As such, convictions for double claiming could be regarded as offences that might disqualify him from the position as director.

The case has just closed with the defence arguing no case to answer. This means that the defence takes a big risk - they will call no witnesses but will argue that the plaintiff cannot win based on the evidence produced so far. The benefit is the trial is shortened and the defendants do not have to submit to cross-examination by the plaintiffs' lawyers.