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HIGH COURT MALAYA KUALA LUMPUR
LEE BEE SUN – Appellant
Versus
SIEW SEOW KIM & ORS – Respondent
[Originating Summons No: WA-24NCC-249-05/2024]
Key Points: - The court found no evidence of oppression under Section 346 of the Companies Act 2016. (!) (!) (!) - The plaintiff failed to prove the existence of a quasi-partnership or legitimate expectation to participate in management. (!) (!) (!) (!) - Alleged oppressive acts were either disputes or did not affect the plaintiff’s rights as a shareholder; Plaintiff’s claims dismissed with costs. (!) (!) (!) (!) - The court held the payments to third parties were commercial in nature and did not constitute oppression under s 346; potential derivative action under s 347 noted. (!) (!) (!) - Access to company premises and accounts were rights of directors, not of shareholders; Plaintiff’s rights as director—not shareholder—define the situation. (!) (!) (!) (!) - The plaintiff did not plead or prove a relationship of trust and confidence or a quasi-partnership basis for equitable relief under s 346. (!) (!) (!) (!) - The overall conclusion: the plaintiff’s minority oppression petition under s 346 is not made out; claim dismissed. (!) (!) (!)
(Originating Summons — Minority Oppression Claim)
A. Introduction
Summary Of The Plaintiff's Claim
[1] The Plaintiff claims that the actions of the First and Second Defendants have been oppressive or have unlawfully disregarded her interests as a shareholder of the Company. She argues that there has been a visible departure from the standards of fair dealing, and that the actions of the First and Second Defendants sufficiently violate these standards, constituting a breach of fair play. Therefore, she now seeks the remedies available to her under s 346 of the Companies Act 2016 .
B. Brief Facts
[2] The Third Defendant, Super Resources & Trading Sdn Bhd, was incorporated by Goh Wei Lim, Yip Kien Meng, Wong Chee Wai and Sok Kok Leong on 8 October 2003. At the material time, the directors of the Company were Goh Wei Lim, Wong Chee Wai and Soh Kok Leong. Goh Wei Lim is the Plaintiff's husband.
[3] Thereafter, the shares were transferred to third parties. The current shareholders in the Company are (i) the Plaintiff who holds 200,000 of the shares in the Third Defendant and (ii) the First Defendant who hold 300,000 of the shares in the Company. The directors of the company are Goh Wei Lim, her husband, the Plaintiff and the Defendants.
[4] The complaints filed by the Plaintiff are summarised in the following paragraphs.
(i) Alleged Oppression In The Decision Not To Purchase The Plaintiff's Shares At The Price Suggested By The Plaintiff — Oppressive Act 1
[5] The Plaintiff claims that parties had agreed in principle that the shares held by her in the Company and other shares held by her and Goh Wei Lim are to be sold to the Second Defendant.
[6] The Plaintiff contends that she had suggested the sum of RM5,000,000.00 being a reasonable sum that should be paid by the Second Defendant. The Second Defendant disagreed and suggested that the shares in the companies are only worth RM3,000,000.00. This was discussed at the meetings held on 4 April 2024, 22 April 2024, 3 May 2024 and 6 May 2024. The valuation of the Third Defendant was also put forth during the meeting on 3 May 2024.
[7] There were allegedly heated discussions between the Plaintiff and the Defendants at these meetings. At the meeting held on 6 May 2024, apparently the Plaintiff was not allowed to speak and that the First and Second Defendant had made a proposal to the Plaintiff to consider. The proposal relates to the offer to purchase her shares in toto. A solicitor was also tasked to draft the sale and purchase agreement.
(ii) Alleged Payments Made By The Company For The Debts Of Third Parties — Oppressive Act 2
[8] As I have indicated earlier, Goh Wei Lim, the Plaintiff's husband is a director of the Company. He is also the director responsible to approve the payments to be made by the Company through its internet banking account.
[9] The Plaintiff alleges that Goh Wei Lim was forced to agree and approve payments made to PUM Cullet Sdn Bhd and LKF Marketing Sdn Bhd without obtaining any approval from the Plaintiff. The Plaintiff suggests that the said payments were made on behalf of MYGRIT Abrasive Sdn Bhd The Third Defendant holds 40% of the shares in MYGRIT Abrasive Sdn Bhd.
[10] The Plaintiff had raised her objection to the said payment and was rebuffed by the First Defendant. He stated that "I as majority shareholder of Super Resources & Trading Sdn Bhd, hereby give you instruction to approve the below mentioned transactions:
...
I shall be responsible for the above mentioned transactions."
[11] The above circumstances led to the exchange of letters of demand between the respective solicitors. The Defendants denied any form of wrongdoing and claims that the said payments were made in the best interest of the Company.
[12] The Plaintiff claims that there is a lack of check and balance in the Company. The affairs of the Company are being undertaken at the instructions of the Defendants including all the business, financial affairs and decisions relating
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