Partners out of Lee Hishammuddin set up new firm

This article first appeared in The Edge Financial Daily, on February 20, 2020.
Partners out of Lee Hishammuddin set up new firm
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KUALA LUMPUR: The five partners who left law firm Lee Hishammuddin Allen & Gledhill (LHAG) have recently set up a new firm called Rosli Dahlan Saravana Partnership, a message sent out to clients on social media stated.

The firm, which commenced operations yesterday, is also looking to hire 10 pupils and 15 associates.

Last Friday, a notice by LHAG said that the five — Datuk DP Naban (real name Palpanaban Devarajoo), Rosli Dahlan, Saravana Kumar, Ooi Bee Hong and Ong Eu Jin — had ceased to practise as partners of the firm.

The five are embroiled in a legal dispute with 12 other lawyers at LHAG, which has reached “a point of no return”, according to some observers.

When contacted, Saravana confirmed the authenticity of the message purportedly sent from him that went viral. He also confirmed that Naban is a senior partner.

“We are happy to continue to manage your tax file and we have the expertise and resources to continue to serve you with our 110% commitment,” the message said. “You may also retain your file at LHAG where another lawyer will manage your file or appoint another law firm.”

“Please be assured of my commitment as I have been involved in your tax dispute from the first day,” read the message sighted by The Edge Financial Daily. “If you wish to continue to engage Datuk Naban and I at our new law firm, RDS (Rosli Dahlan Saravana), please inform LHAG of your decision and I can take over conduct immediately,” the message added. The new law firm is located in Jalan Dutamas, Kuala Lumpur.

The Edge Malaysia weekly reported that Naban and Ooi filed an originating summons on Feb 7 against 12 of the partners at LHAG, five of whom sit on the Partners Committee. The Partners Committee wants to implement three resolutions related to the tax treatment of money which were passed by them pending the hearing of a final determination of mediation and possibly arbitration on treatment of money in the client’s account.

The originating summons sighted by The Edge Malaysia weekly revealed that one of the partners of the Partners Committee, Tay Weng Hwee, had wanted to refer a purported dispute relating to resolutions on treatment of money in the client’s account to the Asian International Arbitration Centre, but Naban disagreed. Ooi affirmed in an affidavit her support of the originating summons.

Naban and Ooi are also seeking an injunction to bar the defendants from implementing the three resolutions, that are essentially about obtaining tax advice from tax consultants on the treatment of money received by Naban and Saravana between 2009 and 2019.

Naban and Ooi claim that the resolutions cannot be passed by a simple majority but must obtain 75% of the voting shares, which they claim was not fulfilled.

The defendants named by Naban and Ooi as sighted in documents are Tay, Andrew Chiew Ean Vooi, Adlin Abdul Majid, G Vijay Kumar, and Sean Yeow Huang Meng, who are members of the Partners Committee while others named include Datuk Nitin Nadkarni, Kumar Kanasingam, Lambert Rasa-Ratnam, Mong Chung Seng, SM Shanmugam, Datuk T Thavalingam, and Aaron Gerard Sankar.

The Partners Committee and the other defendants maintain that a simple majority would suffice.

On Feb 7, three partners — Saravana, Rosli, and Ong — also separately sent out notices to dissolve the firm, citing the failure to resolve the dispute through mediation and arbitration. The Notice of Dissolution of Partnership by Saravana which went viral on social media read, “In light of the ongoing mistrust and loss of confidence amongst ourselves, I see no point in continuing with the partnership and I do not wish to do so.”

Two days later, on Feb 9, a statement was issued by LHAG, signed off by the Partners Committee, raising its concerns over the messages that the firm would be dissolved. The statement gave assurance that LHAG had not been dissolved and that business continued as usual. It added that the partnership can only be dissolved by a resolution passed by 75% of the equity partners and that no such resolution had been passed.

On Feb 10, the 12 lawyers sought an ex parte injunction against Saravana, Ong, Rosli, Naban, and Ooi to restrain the defendants from giving effect to the Notice of Dissolution as well as the appointment of receivers and managers and restrain them from disrupting the business operations and from publicising discussions pending an arbitration.

This injunction was sought pending the resolution of an originating summons by the 12 who question the attempt to dissolve the partnership by sending out separate dissolution notices without first seeking the requisite 75% majority. They stress that the matter has to be referred to arbitration, and want clarity on whether the dissolution notices were validly issued.

It is learnt that all court papers have since been sealed.