A High Court judgment delivered on 31 May 2026 serves as a timely reminder for business owners and directors. When a senior person uses your staff and resources to build his own business on the side, that is not just a management problem. It is a legal breach. This case looked at what happens when a trusted Executive Director crosses that line.

𝐁𝐚𝐜𝐤𝐠𝐫𝐨𝐮𝐧𝐝 𝐨𝐟 𝐭𝐡𝐞 𝐜𝐚𝐬𝐞 Hartalega Holdings Berhad is a Bursa Malaysia listed nitrile glove manufacturer. The defendant, Dr Danaraj a/l Nadarajah, held three positions at the same time across the Hartalega group, and was in practice the person running the group's India and China operations with full control over staff, bank accounts, and daily affairs. The question before the court was whether, while still serving in all three roles, he had used the Indian subsidiary's employees and resources to secretly build his own businesses called Snap Asia, Snap Trade, and Snap Home, without Hartalega's knowledge or consent.

𝐏𝐨𝐬𝐢𝐭𝐢𝐨𝐧 𝐨𝐟 𝐭𝐡𝐞 𝐀𝐩𝐩𝐞𝐥𝐥𝐚𝐧𝐭 (Hartalega Holdings Berhad and related companies) Hartalega's case was about what Dr Danaraj did while still employed. Employees testified that he directed them to prepare purchase orders on Snap Asia's letterhead for glove deals with outside suppliers, asked accounts staff to prepare financial projections for Snap Asia to obtain a bank loan, involved staff in company name searches for his new ventures, and made the Indian subsidiary pay for technology work meant for his own projects. A Deloitte forensic report, tested against WhatsApp messages and Dr Danaraj's own answers in cross-examination, supported these findings.

𝐏𝐨𝐬𝐢𝐭𝐢𝐨𝐧 𝐨𝐟 𝐭𝐡𝐞 𝐑𝐞𝐬𝐩𝐨𝐧𝐝𝐞𝐧𝐭 (Dr Danaraj a/l Nadarajah) Dr Danaraj defended himself on three points. He argued his duties to each Hartalega entity were separate, so liability should not cross from one company to another. He said his contract had no clause stopping him from planning a new business. And for each allegation, he had an explanation. The purchase orders were to help an old partner source gloves during the Covid-19 shortage. The financial projections were a training exercise for a staff member done in her own time. He also pointed out that his name never appeared as shareholder or director of Snap Asia, arguing there was no real business connected to him.

𝐃𝐞𝐜𝐢𝐬𝐢𝐨𝐧 𝐨𝐟 𝐭𝐡𝐞 𝐂𝐨𝐮𝐫𝐭 The High Court ruled fully in favour of Hartalega. The court found that a person in a senior position of trust has a duty to act loyally and in the best interests of the company at all times during employment. Using company staff and resources for private purposes without consent is a serious breach of that duty, regardless of what the employment contract says or whose name appears on the business register. Damages were to be assessed, with interest at 5% per annum and costs of RM90,000.00 awarded against Dr Danaraj.

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