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ADM Sdn. Bhd. (hereinafter referred to as "ADM") is in the business of importing silk and cotton from India, United Kingdom and Japan to Malaysia and distributes them to their respective wholesalers. Azrul, Ismail and Suzana are directors of ADM and each hold 40%, 30% and 20% shares respectively, whilst Rahim and Rahman (deceased) each holds 5% of the shares.
Clause 27 of the constitution of ADM inter alia provides that the directors may in their absolute discretion refuse to register a transfer of shares.
The High Court of Malaya in Kuala Lumpur has recently appointed an administrator for the administration of the estate of Rahman (deceased). Kuala Lumpur Syariah Court has also issued a Sijil Faraid which provides, among others, that Aziz is the sole beneficiary and is entitled to all of Rahman's shares in ADM. Pursuant to clause 27, the directors have refused to allow the registration of transfer of Rahman's share to Aziz. However, Aziz was not informed of the reasons for the refusal of the transfer of shares. Aziz suspected that directors heard about the rumours that he is a homosexual, which rumours were not true.
Advise Aziz.
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