Primus (M) v Rin Kei Mei

Which court decided the case?

• High Court Kuala Lumpur

• Session Court Putrajaya

• Federal Court Putrajaya

• Court of Appeal Kuala Lumpur

What is the main issue of this case?

• Whether EON Capital Berhad could legally dispose of its assets?

• Whether it is legal to sell all assets of a company to end the company?

• Whether sec 64 of CA enables a company to end its mutual relationship with members?

• Whether a company can legally undergo a capital reduction after disposing its entire business for cash?

What was EON Capital Berhad's (EON) plan after selling its assets to Hong Leong Bank Berhad (HLB)?

• To acquire new assets

• To distribute the cash proceeds to its shareholders and undergo voluntary winding-up

• To use the cash proceeds to expand its business

• To merge with Primus

What did Primus argue in opposition to the sale of EON’s assets?

• The transaction violated the Companies Act 1965.

• The sale would benefit all shareholders equally.

• The sale was approved only by creditors.

• EON had not held an extraordinary general meeting.

Which legal principle allows a company to return cash to shareholders after a full business disposal?

• Share dilution

• Capital restructuring

• Capital reduction

• Asset reallocation

What must a company typically obtain before it can legally reduce its share capital?

• A resolution from the shareholders and a court’s confirmation.

• An agreement from the board of directors only.

• A public announcement to creditors.

• No additional approvals are required.

What is the consequence of distributing cash proceeds to shareholders after a company sells its entire business?

• It is considered a dividend distribution.

• It necessitates a reduction in the company’s share capital.

• It requires issuing more shares.

• It allows shareholders to buy new shares.

What was the court’s decision regarding the legality of EON’s capital reduction after the sale?

• The court held it was illegal.

• The court required shareholder approval.

• The court held there was nothing illegal about the reduction.

• The court prohibited capital reduction for public companies.

Why might a voluntary winding-up be considered after a business disposal and capital reduction?

• To liquidate remaining assets.

• To distribute remaining shares.

• To formally close the company after business cessation.

• To allow more shareholders to join.

Which of the following would NOT be a valid reason for a company to undergo a capital reduction?

• Returning excess funds to shareholders after a business sale.

• Reducing share capital to match the company’s reduced asset base.

• Making more funds available for future investments.

• Aligning share capital with the company’s asset value post-sale.