The majority sets its own pay and hides the accounts: what can a minority shareholder do in Malaysia?

What can a minority shareholder do about the directors' pay and the accounts? The short answer

In Malaysia, a minority shareholder with 10% of the votes can force a vote on directors' fees within 30 days of learning of them (Companies Act 2016, section 230). Every shareholder must be sent the yearly accounts (sections 257 and 258), and if the company is run unfairly against you, the High Court can step in under section 346.

That covers pay that rises while dividends stop. You need not be a director, and court is the last step, not the first. The steps, in order, are in the section "What should I do first" below.

This guide is for a Sdn Bhd (private company) shareholder, often with 10% to 49%. If you hold exactly half, see the guide on a 50/50 deadlock.

Directors who work for the company can be paid for that work. How much to pay them is, as a rule, for the shareholders to decide, if they approve it in the proper way. So the two questions to ask are: who approved the pay, and is the pay as a whole fair to you?

This guide uses a few legal words. Here is what they mean. In the Act, a shareholder is a "member". Directors' fees are what a director is paid for holding the post. Benefits are other things paid or given to directors, such as allowances or a company car. An ordinary resolution is a shareholders' decision passed by more than half of the votes. A written resolution is one the shareholders sign instead of voting at a meeting. Oppression is the lawyers' word for running a company unfairly against a shareholder, beyond the normal disagreements of majority rule.

Key facts (Malaysia, as at 28 October 2026):

• 14 days: the time the board has to tell shareholders of the directors' fees it approves (Companies Act 2016, section 230).
• 10%: the share of the votes needed, alone or with others, to force a shareholders' vote on a director's fee or benefit (section 230(4)).
• 30 days: the time to make that demand, counted from the earliest day you learn of the payment (section 230(4)).
• 6 months: the time a private company has, after its financial year end, to send the financial statements (the yearly accounts) to every shareholder (sections 257 and 258).
• 5%: the holding that can make an audit-exempt company audit its accounts, by written notice during the financial year (SSM Practice Directive 10/2024).
• No minimum: any shareholder, whatever the holding, may ask the High Court for an oppression order (section 346).

Can the directors of a Sdn Bhd decide their own pay?

The board of a Malaysian Sdn Bhd may approve the directors' fees (yuran pengarah, 董事费) and benefits itself, unless its constitution says otherwise (Companies Act 2016, section 230). The constitution is the company's own rule book, so read it first.

Many older companies still use articles based on Table A, the model articles of the old 1965 Act, which the 2016 Act keeps in force. Table A leaves the directors' pay to the shareholders in general meeting, but lets the board fix a managing director's pay. Under such articles, pay the board fixed alone may not be properly approved. Table A also says a director's vote on their own contract with the company does not count at the board, so check who voted on a managing director's pay.

Where the board approves fees, it must record the approval in its minutes and tell the shareholders of the fees within 14 days. Missing that notice is an offence by the company and by each officer responsible, with a fine of up to RM250,000. Nothing in the Act says that a missed notice cancels the payment.

Whether a monthly salary (gaji pengarah, 董事薪金) is covered is not settled: the Act does not define "benefits". SSM (the Companies Commission of Malaysia) says in its guidance that the rule covers benefits of the office of director. Pay for an executive or management job, it says, is outside the rule. That is guidance, not law, and no court has decided the point. So the 10% route may not reach the salaries of working directors, though the court can still look at that pay in an oppression case. Ask the company in writing how each director's pay is approved and on what terms. If you cannot tell, take advice quickly: a demand made in time keeps the route open.

How can a 10% shareholder force a vote on the directors' pay under section 230?

With at least 10% of the votes, alone or with others, you can force a shareholders' vote on a board-approved fee or benefit (Companies Act 2016, section 230(4)). You must consider the payment not fair to the company, and act within 30 days after you learn of it. The FAQ below says what to put in the demand.

Count the 30 days from the earliest day you, or any shareholder joining you, learned of the payment, by any means: a notice, the accounts or someone telling you. Do not wait for the last day. A later payment you learn of should start its own 30 days. If you were a director when the pay was approved, the other side may say your 30 days started then, so take advice at once. If the 30 days have passed, you can still apply for an oppression order, which has no fixed deadline, though a long delay can count against you.

The resolution is an ordinary one, unless the constitution says otherwise. In a private company, the Act does not stop directors who are also shareholders from voting their own shares on it, unless the constitution does. No reported Malaysian case has decided such a vote. So if the paid directors hold more than half, they can usually vote their pay through.

The demand still does three things. It puts on the record, with dates, your objection and any vote they hold. Your objection is evidence a court can read that you did not accept the pay. Unless a resolution under that subsection approves the payment, the Act makes it a debt the director owes the company (section 230(5)). And the court's oppression power covers a shareholders' resolution, passed or only proposed, that unfairly discriminates against you. But the demand also hands the majority a vote approving the pay, which they may cite later, so take advice on its wording.

If the company ignores your demand, no resolution approves the payment, so on the Act's words it is still such a debt. But the Act does not say how you make the company hold the vote or collect that debt, so take advice then.

Pay approved openly, in advance, is harder to challenge than pay taken first and approved later by the people who took it.

How do I get the accounts if I am not a director?

Every shareholder is entitled to the yearly financial statements (penyata kewangan, 财务报表) and the directors' report that goes with them (Companies Act 2016, sections 257 and 258). These are the year's accounts, so ask for them in writing. If you are told that only directors may see the accounts, that is wrong for these yearly statements. They must be sent to every shareholder. A private company must send them within six months of its financial year end, unless SSM has extended the time. A shareholder not sent them can ask for a free copy.

The directors' report must state the directors' fees and their other benefits, shown separately, including bonuses and commissions, with an estimate of non-cash benefits. Expect totals: the Act does not clearly require a figure for each director. The day you receive it can start the 30 days for the 10% demand.

SSM holds a copy too: a private company must lodge (file) its financial statements there, and anyone can pay to inspect them. An exempt private company may lodge only a certificate, so ask the company for yours. A small company may be exempt from audit, but it must still send and lodge its accounts, unaudited. Shareholders with at least 5% of the shares can still require an audit. The written notice must reach the company during the financial year and at least one month before it ends (SSM Practice Directive 10/2024).

What a shareholder who is not a director cannot get under the Act is the day-to-day accounting records (会计记录), the board minutes and the directors' service contracts. You can still ask for management accounts and explanations: in Lee Tin Hui, the court counted the directors' refusal of information against them. The firm's guide sets out what a minority shareholder is entitled to see.

If the company refuses, keep its refusal. On a shareholder's application, the High Court can order an officer to supply a copy (section 585). A refusal can also be an offence, but a prosecution needs the Public Prosecutor's written consent. SSM sends internal company disputes to lawyers.

Pay rises, dividends stop: when is that oppression under section 346?

High pay with no dividends can be oppression when those in control take the profit as pay that only they receive. Meanwhile dividends (分红), the minority's only return, stop. High pay alone is not enough.

The fair side first. No shareholder can force a dividend. The directors decide, only out of profits and only if the company will stay solvent for the next 12 months. Solvent means able to pay its debts as they fall due. A founder whose return was a salary should also see the FAQ on a removed director's salary below.

Lee Tin Hui v GL Property Management Sdn Bhd (High Court, 2025) shows what can tip the balance. The only directors were a married couple; the husband held 75%. The minority shareholder had inherited 12.5% from a parent. The court relied on these facts:

• The directors' pay rose sixfold, from RM30,000 in 2019 to RM180,000 a year in 2021 to 2023. Revenue stayed about the same: RM330,000 in 2019 and RM317,000 in 2023.
• The earlier directors had drawn no pay, and the company had paid dividends: RM200,000 in 2014, RM500,000 in 2015 and RM200,000 in 2016. They stopped when the new directors took control.
• The directors lent themselves RM925,101 of the company's money.
• The articles required the shareholders to fix the pay first, and they had not. Resolutions passed later with the directors' own majority votes did not cure it.
• A RM50,000 dividend in 2023, a year of operating loss, helped the majority holder repay loans from the company.
• Written questions from the minority's lawyers got dismissive replies.

The court held that the directors chose to take value through pay and loans, which only the majority could get, instead of dividends. That made it oppression of the minority, not only a wrong to the company. It is one High Court decision, on its own facts.

Make the same comparison for your company: pay, revenue, profit and dividends year by year, what earlier directors took, and whether the shareholders approved the pay first. Note too what the directors actually do, what hiring someone to do it would cost, and whether the company needed the cash it kept.

Can a minority shareholder get back the extra pay the directors took?

Usually not for themselves: pay taken out of the company is the company's money, so the claim to recover it belongs to the company. The Federal Court held in 2024 that a loss every shareholder suffers alike, such as a fall in dividends or share value, is not enough for an oppression order. It said the position can differ where those in control cause the loss to you, to the exclusion of the other shareholders. Lee Tin Hui fell on that side, because only the majority got the pay and the loans. Whether your case does depends on its facts.

So there are two routes. A derivative action is a claim a shareholder brings in the company's name, for a wrong done to the company. It needs the court's permission, and the directors must first get 30 days' written notice. Money recovered goes to the company, which the court can order to pay your reasonable legal fees. Or, inside an oppression case, the court can order the directors to repay the company, as in Lee Tin Hui. The debt under the 10% route is also owed to the company, not to you. But money repaid to the company can add to what your shares are worth.

A working director whose salary stopped should read the FAQ on a time limit for a claim as an employee below: it is short.

What can the court order about the pay and the accounts?

If the High Court finds oppression under section 346, it can make any order it thinks fit. For pay, that can mean repayment to the company, an accountant to investigate the accounts, or a buy-out of your shares. In Lee Tin Hui the orders included:

• A declaration, a formal statement by the court, that the directors' pay for 2019 to 2022 (and for 2023, if any), and their loans, were unlawful.
• An order that the directors pay back to the company all money they took wrongly, in an amount the court decides.
• A forensic auditor, an accountant paid by the directors, to investigate the accounts and report to the court.
• An order that the company secretary give the minority the audited accounts for 2023 and the company's documents since October 2017.
• A buy-out: the 75% holder to buy the minority's shares at their value as at the date of the order. An independent accountant, with full access to the books, fixes it.
• Winding up of the company if the 75% holder did not pay within 14 days of the valuation. Winding up means closing the company, selling its assets and paying its debts.

The valuer had to take the court's findings on the pay and loans into account. The court also picks the valuation date, such as the date of the order or a date before the unfair conduct began. A minority discount, a lower price because the shares carry no control, is for the court to decide. The firm's guide explains how a buy-out price is worked out.

The court can also regulate how the company is run in future. No reported Malaysian order capping directors' future pay has been found, so do not count on one. A buy-out is not a right: the court chooses the order.

What should I do first about the pay and the accounts, and in what order?

Start with the written steps that cost little, keep a dated record, and go to court only if they fail. If your 30 days are already running, send the 10% demand first. In a family company, start quietly: buying the SSM records needs no letter to the company.

1. Read the constitution and any shareholder agreement for the pay rules, a dispute clause and an exit clause. Ask the company secretary in writing for a copy.
2. Write to the company at its registered office, for the attention of the board. Ask for the financial statements and reports for each missing year, the minutes of shareholders' meetings and the shareholders' written resolutions, and any notice of directors' fees. Give a date to reply, such as two weeks, and keep a copy. Note the date the accounts arrive, early or late.
3. Buy the SSM records, for a small fee: the Company Profile, which shows the registered office, the directors and the shareholders, and any financial statements lodged. Check that you are on the register of members.
4. Within 30 days of learning of a fee or benefit you think unfair, send the 10% demand, joining with others if you need to.
5. Put your questions on record at a shareholders' meeting. With 10% of the paid-up voting shares you can require the directors to call one within 14 days. If they do not, you may call it yourself, for a date within three months of their receiving your request. The company repays your reasonable costs.
6. With 10% of the issued shares you may also call a meeting yourself; take advice on the notice rules first. Where all the shares are fully paid shares of one class, these 10% tests usually come to the same thing.
7. Do not sign a resolution, minutes or a settlement you disagree with: courts have treated a shareholder's signature as agreement. Object in writing. Do not sell or transfer your shares before you take advice. Once you are off the register, you usually lose the right to apply for an oppression order.
8. Do not take or copy company records you are not entitled to, and do not post about the dispute online. If you were a director, do not use documents or information you got as a director for your own case before you take advice. Tell your lawyer what you signed.
9. Offer mediation, and ask in writing whether the majority will buy your shares at a fair value fixed by an independent valuer.
10. If none of this works, apply to the High Court for an oppression order.

If the other side says you could have called a meeting yourself, Lee Tin Hui answers that. The court said the argument ignored the information gap: without financial information, the 12.5% shareholder could not know when a meeting was needed.

For the future, a shareholder agreement with an information and pay clause can give a minority what the Act does not.

How long does a case about directors' pay take, and what does it cost?

Expect many months at the least. In two recent cases decided on written evidence, the High Court took six to eight months. An appeal or a share valuation can add a year or more. The court decides costs, and the loser usually pays part of the winner's. In those two cases it awarded the minority RM30,000 and RM20,000, and in the second the minority was also ordered to pay RM5,000 to another defendant. These sums are costs the court ordered one side to pay the other, not what the lawyers charged.

Lee Tin Hui was filed on 23 July 2024 and decided on 10 March 2025. Tan Lae Peng was filed in June 2024 and decided on 23 December 2024. Both rested on affidavits (sworn written statements) and strong documents; disputed facts can mean a slower full trial.

Costs the court orders usually cover only part of your own lawyer's fees: the Federal Court said so in 2024. The court must also weigh how each side behaved before and during the case, including any attempt at mediation. So a polite letter and a reasonable written offer to settle can count. The court decides, too, who pays a share valuer or a forensic accountant, and recent cases differed. Once a case is in court, mediation by a judge is free.

For your own bill, the letters and the 10% demand are the cheap part, and you may send them yourself, in your own name. A court case, a share valuation, a forensic accountant and an appeal raise the cost. Ask a lawyer for a written estimate for each step. Weigh it against the value of your shares and the dividends you have lost.

When should I see a lawyer?

Get legal advice before the 30 days for a 10% demand run out. Get it at once if a notice proposes new shares, a sale of the business or your removal. With more than 25% of the votes you can usually block a special resolution, which needs 75%, but you cannot block an ordinary one. An order to stop a meeting must be sought, and heard, before the meeting. Take advice too when the company refuses your written requests, before you sign or sell anything, and when a letter arrives from the other side's lawyer. The free Lawyer's Letter Check on this website helps you tell a letter from a court paper. The article how to find a lawyer in Malaysia explains how to choose one.

The firm acts for shareholders in these disputes. To talk to it, see its page on corporate and commercial law.

This article is general information about Malaysian law as at 28 October 2026. It is not legal advice on your situation, and reading it does not make you a client of the firm. Court decisions change the position, and some of the High Court decisions named here may be appealed, so check the current law before you rely on one.