Monday, December 6, 2010The High Court has ruled that Malaysian Bulk Carriers was right to reject share application from three individuals although they had been alloted pink forms.
The High Court yesterday ruled that MBC was right to reject share application from the three individuals although they had been alloted pink forms.
The court dismissed the application filed by the three months ago, claiming that MBC was wrong to go back on its offer to allot them collectively 1.6 million shares.
The plaintiffs were former and current employees of Global Maritime Ventures Bhd, a subsidiary of Bank Pembangunan Malaysia Bhd.
In an oral judgment made in the Shah Alam High Court yesterday, the judge dismissed all three plaintiffs' claims with costs.
Written grounds were not delivered. The decision was made after written submissions were presented to the court last week.
The plaintiffs will decide on the next course of action, once written grounds are delivered.
The judgment, for now, has defined the importance of a pink form for an initial public offering (IPO) distribution of shares, long time seen as a guarantee of shares by the investing public.
"As far as we are concerned, it's a good decision.
"It puts into perspective the role of the pink form as an invitation to treat (an invitation to offer for the shares) and not as an offer of the shares, and that it also has to follow the normal application process - subject to the terms and conditions of the application form and prospectus," MBC solicitor Tay & Partners partner Leonard Yeoh said.
He said the judgment was a landmark decision because it clears up uncertainty on the matter of pink forms, practised in Malaysia and Singapore, especially for those companies going for IPOs.
The offer was made to the three in appreciation of their contribution to the success of MBC towards an IPO in 2003.
The court battle lasted for almost six months. The case was heard some seven years after MBC undertook IPO and listed its shares on December 2 2003.