PUTRAJAYA: Managing directors and executive directors of public listed companies
can work until 70 if their terms of employment are silent on the retirement age.
The Federal Court yesterday unanimously affirmed this when it
dismissed an application for leave to appeal by Kian Joo Can Factory Bhd and its
four directors against the ruling of the Court of Appeal.
Federal Court judge Tan Sri Zaki Azmi, who sat with Datuk Abdul Aziz Mohamad and
Datuk Hashim Yusoff, said there was no merit in the application.
This decision is seen as bringing clarity to retirement age of those holding
executive positions in the corporate sector.
Under the Company's Act 1965, section 129 provides that directors can hold
office until the age of 70.
The company and its four directors Tunku Nadzaruddin Tuanku
Jaafar, Datuk Anthony See Teow Guan, See Tiau Kee and See Ean Beng filed the
application.
On Dec 18, 2006, the Court of Appeal, which set aside a High Court order,
granted an injunction restraining the four directors from implementing the board
of directors' resolution that imposed the retirement age of 55 on Datuk See Teow
Chuan and See Teow Koon.
Teow Chuan was the managing director while Teow Koon was the executive director
of the company.
The appellate court also granted a declaration that Teow Chuan and Teow Koon
were entitled to be employed in their respective positions until they attained
the age of 70 on a personal-to-holder basis in accordance with the company's
human resource package.
The two men, represented by Datuk V. Sivaparanjothi and V.K. Lashmi, argued that
the retirement age was imposed unilaterally and arbitrarily on them.
They said there was no provision in the company's memorandum of article of
association or any written law that the retirement age of managing directors and
the executive directors ought to be 55 years.
On March 31, 1999, the company's board of directors by majority of 4 to 2 voted
to implement the retirement age at 55.
Teow Chuan was then 58 while Teow Koon was below 55.
The two argued that there was no clause on retirement specified in the company's
memorandum of article of association when they joined in 1967.
They filed an action for specific relief against the company and the four
directors that they be reinstated in office.
The High Court dismissed the action with costs on Feb 27, 2004.
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Circular No 106/2012: Accountant’s Report 2011
