Five former partners of Lee Hishammuddin Allen & Gledhill (LHAG), Malaysia’s second-largest law firm, have started a new firm called Rosli Dahlan Saravana Partnership (RDS) following an intra-firm dispute over tax treatment of money in client accounts.

Neither LHAG nor RDS provided any comment to ALB as of the time of publication. The latter firm was set up in February by former LHAG partners Datuk DP Naban, Rosli Dahlan, Saravana Kumar, Ooi Bee Hong and Ong Eu Jin.

Three of the partners – Rosli, Saravana Kumar and Ong – have issued notices of dissolution of LHAG.

According to media reports, Naban and Ooi had earlier filed an originating summons against 12 partners of LHAG, five of whom sit on the Partners Committee, against a decision of the committee to implement resolutions related to the tax treatment of money that lay in client accounts.

One of the partners of the Partners Committee wanted to refer a dispute relating to resolutions on treatment of money in the client’s account to the Asian International Arbitration Centre, said the Edge Malaysia, but Naban disagreed.

Naban and Ooi are supposedly seeking to bar the other lawyers from implementing the resolutions regarding obtaining tax advice from consultants on the treatment of money received by Naban and Saravana between 2009 and 2019, said media reports. Naban and Ooi said that the resolutions cannot be passed without obtaining 75 percent of the voting shares, which they claim was not fulfilled.

Additionally, Saravana, Rosli, and Ong separately sent out notices to dissolve the firm, citing the failure to resolve the dispute through mediation and arbitration, the Edge added. Following this, LHAG issued a statement which stated that the firm had not been dissolved and business would continue as usual.

The 12 partners have also received an interim order against their former colleagues to restrain them from giving effect to the notices of dissolution, the appointment of receivers and managers, and to restrain them from disrupting the business besides publicising discussions pending an arbitration, according to the LHAG statement.

 

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