LETTER | The recent High Court clarification in the case involving Primus Equities & Assets Sdn Bhd and the Securities Commission Malaysia (SC) raises an important question about the limits of regulatory power.

On Aug 12, 2026, the High Court clarified that the interim stay granted on Aug 3 applies not only to the SC’s notice requiring Primus to produce documents, but also to the underlying investigation itself.

The stay therefore puts the SC’s investigation into the transactions between Primus and its majority shareholder, UBB Amanah Berhad, on hold.

The clarification is significant because it prevents the investigation from continuing while the court is still considering whether the SC has the legal jurisdiction to conduct it in the first place.

Scope of interim stay

The issue arose after the SC sought clarification on whether the interim stay covered its broader investigation or only the document production notice dated 29 June 2026.

The High Court’s position was clear. The interim stay covers both matters: the enforcement of the document notice and the investigation into the transactions between Primus and UBB Amanah.

This is important because allowing the investigation to continue while the court considers the legality of the SC’s actions could undermine the purpose of the judicial review proceedings.

If Primus were required to provide documents and cooperate with the investigation before the court determined whether the SC had the legal authority to investigate, the court’s eventual decision could be rendered ineffective.

Question of jurisdiction

At the centre of the dispute is whether the SC has exceeded the powers given to it by Parliament.

The transactions being examined involve the issuance and subscription of redeemable preference shares and ordinary shares between Primus and UBB Amanah, which holds an 80 percent interest in Primus.

The central argument is that these are matters relating to the internal affairs and equity structure of a private company, areas that fall primarily within company and trust law.

The SC, on the other hand, derives its powers from securities legislation, which is principally concerned with matters such as capital markets, public offerings, and market integrity.

The question for the court is therefore whether the transactions in question properly fall within the SC’s statutory regulatory and investigative jurisdiction.

If a statutory authority exercises a power that Parliament has not given it, that exercise of power may be challenged as ultra vires.

Why the stay matters

The interim stay also serves an important purpose in protecting the judicial review process.

Judge Norliza Othman’s grounds for granting the stay were based on the need to ensure that the judicial review application does not become nugatory.

In simple terms, the court must be able to decide whether the SC has the legal power to investigate before the investigation itself causes consequences that cannot easily be reversed.

Without the stay, Primus could have been required to produce documents and participate in the investigation before the substantive hearing scheduled for 20 October 2026.

That could potentially cause prejudice to Primus before the court has even decided whether the SC was entitled to investigate in the first place.

Regulatory powers not unlimited

The case also highlights a broader principle of administrative law: statutory bodies are creatures of statute. Their powers come from legislation, and those powers have limits.

The Court of Appeal’s decision in Rekapacific Bhd v Securities Commission (2005) emphasised the importance of public decision-makers having a proper legal basis for their decisions, particularly where their jurisdiction is challenged.

Similarly, the courts have consistently recognised that statutory agencies cannot simply expand their own powers beyond what Parliament has provided.

Regulatory authorities have an important role to play, but that role must remain within the boundaries of the law.

The bigger issue

The significance of Primus v Securities Commission goes beyond the immediate dispute between the parties.

It raises a fundamental question about how regulatory power should operate in a system governed by the rule of law.

The SC, like any other statutory authority, must be able to justify the exercise of its powers by reference to the legislation that gives it those powers. The fact that an authority has broad regulatory responsibilities does not mean that its jurisdiction is unlimited.

The High Court’s decision to maintain the stay allows that question to be properly determined before the investigation proceeds further.

Until the substantive hearing on Oct 20, 2026, the SC’s investigation remains stayed.

Ultimately, the case serves as a reminder of a basic principle: regulatory authorities are powerful because Parliament gives them powers, but those powers must still be exercised within the limits set by Parliament.

No regulator is above the law, and where the limits of statutory power are challenged, it is the courts that have the final say.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.