Summary: Directors have almost presumptive rights to inspect documents in the possession of the company which fall within the ambit of s 199 of the Companies Act unless there’s some abuse of process such as ulterior purpose or privilege.
Section 199 of the Companies Act provides for a director’s right to inspect company documents:
199.—(1) Every company shall cause to be kept such accounting and other records as will sufficiently explain the transactions and financial position of the company and enable true and fair financial statements and any documents required to be attached thereto to be prepared from time to time, and shall cause those records to be kept in such manner as to enable them to be conveniently and properly audited.
In Mukherjee Amitava v DyStar Global Holdings (Singapore) Pte Ltd and others  2 SLR 1054 (CA), the Court of Appeal set out various important legal principles on a director’s right to inspect company documents under s 199 of the Companies Act.
A director had an almost presumptive right to inspect the documents of the company insofar as the documents fell within the ambit of s 199 of the Companies Act. A director does not have to demonstrate any ground for inspection. The burden was on the company, if it resisted the director’s application, to show that such access should not be permitted because there was some abuse of process or privilege that underlies the request, e.g. when the director intended to use the right to inspect for ulterior purposes largely unconnected to the discharge of the director’s duties: at , referring to Hau Tau Khang v Sanur Indonesian Restaurant Pte Ltd  3 SLR 1128 (“Sanur Indonesian Restaurant”) at .
The rationale behind this approach is that a director has fiduciary and statutory duties and obligations to the company and the director should not be placed in the position of having to carry out these duties and meet these obligations without having access to the company’s records and documents: citing Wuu Khek Chiang George v ECRC Land Pte Ltd  2 SLR(R) 352 at –, – and Sanur Indonesian Restaurant at , , –.
Even a sleeping director (not involved in the day-to-day management or operations of the company) or an apparently disinterested director is allowed to inspect the documents of the company: Lim Kok Leong v Seen Joo Co Pte Ltd and others  1 SLR 688 (HC) at .
Even a de facto director has been held to be allowed to inspect the documents of the company: Cheng Tim Jin v Alvamar Capital Pte Ltd  SGHC 220. A de facto director is a person who undertook functions in relation to the company which could properly be discharged only by a director, participated in directing the affairs of the company on an equal footing with the other director(s) and not in a subordinate role, and shown to have assumed the status and functions of a company director and to have exercised “real influence” in the corporate governance of the company: at .
The right to inspection would extend only to “accounting and other records” that were, at the material time, kept by the company and were therefore in existence. The provision did not contemplate or call for the generation and creation of new documents: at .
The scope of s 199(1) contemplates that the power is available in respect of records that “will sufficiently explain the transactions and financial position of the company and enable true and fair [financial statements] and any documents required to be attached thereto to be prepared from time to time”: Mukherjee Amitava v DyStar Global Holdings (Singapore) Pte Ltd and others  2 SLR 1054 (CA) at .
The proper scope of the order to be made under s 199 of the Act is:
First, it will include the documents belonging to the company that fall within the terms of s 199(1).
Second, it will include the documents in the possession of the company even if these belong to the subsidiaries of the company (but not other related companies), if and to the extent that these documents can be shown to be relevant and necessary to explain (a) the transactions of the company; (b) the financial position of the company; or (c) to enable true and fair financial statements to be prepared: Mukherjee Amitava v DyStar Global Holdings (Singapore) Pte Ltd and others  2 SLR 1054 (CA) at .
A director also has a right at common law to “see and take copies of documents belonging to his company” (Burn v London and South Wales Coal Co and Risca Investment Co (1890) 7 TLR 118 (“Burn”) at 118) in order that “he might properly perform his duties” (Conway v Petronius Clothing Co Ltd  1 WLR 72 (“Conway”) at 86D-H): Mukherjee Amitava v DyStar Global Holdings (Singapore) Pte Ltd and others  5 SLR 256 (HC) at  (overturned in part on appeal but not on this point).