By Doreenn Leong
LEGAL firm Lee Hishammuddin Allen & Gledhill (LHAG) has taken action to stop five of its partners from dissolving the firm.
In a statement on Feb 10, LHAG Partners Committee said it has obtained an interim order from the Kuala Lumpur High Court against Saravana Kumar Segaran, Ong Eu Jin, Rosli Dahlan, Datuk DP Naban and Ooi Bee Hong, restraining them from attempting to dissolve the firm.
On Feb 7, from 5pm, Saravana, Rosli and Ong emailed, to the firm’s over 200 employees, their purported notices to dissolve the firm immediately. One of the Notices of Dissolution was circulated on social media.
Naban also, in the same evening, issued a notice informing the firm that he regarded the firm as dissolved while Ooi also sent a notice purporting to accept the Notices of Dissolution.
However, it may not be so easy to dissolve the firm. Under the partnership agreement, the partnership can only be dissolved by a resolution passed by 75% of the equity partners.
According to LHAG in a statement on Feb 9, no such resolution has been passed. Nor was there any risk of such a resolution being passed, as the vast majority of partners oppose it.
LHAG pointed out that the three partners collectively represent about only 11% of the equity in the firm.
“If any steps are taken to dissolve the firm, the process of reviewing the appropriate tax treatment of these large sums of moneys may be delayed or even frustrated,” the firm said.
Attempts to dissolve the partnership stemmed from disputes between the partners, who were supposed to have been resolved in the agreed dispute resolution process: mediation and arbitration but Naban and Ooi decided to take this matter to the court.
According to LHAG’s statement on Feb 9, the duo claimed that there is an attempt by young partners to illegally change the agreed profit distribution scheme.
But LHAG refuted the claim, stating that the dispute was over the treatment of over RM20 mil received by the firm mainly on files opened and managed by Saravana and Naban – both are partners from the tax practice group – from clients between 2009 to 2019.
The sum of over RM20 mil came to the attention of the newly elected Partners Committee, which is the highest managing body of LHAG, in September last year as the money was received by the firm but was yet to be reflected accordingly.
According to LHAG, numerous attempts were made to ascertain the full facts from Naban and Saravana but to no avail.
Eventually, on Jan 5, 2020, the partners, by a clear majority, passed resolutions to seek tax advice from the firm’s long-standing tax advisors as to the proper tax treatment of the moneys, and complying with the advice.
This has prompted Naban and Ooi to seek an injunction to stop the firm from getting such tax advice.
The veteran tax lawyer Naban currently represents the Inland Revenue Board in a suit to recover RM1.69 bil in allegedly unpaid tax from former prime minister Datuk Seri Najib Razak. – Feb 11, 2020.
