Minority shareholders' rights must be safeguarded from oppressive conduct by majority stakeholders, especially regarding statutory obligations and financial transparency.

JUDGMENT

(Enclosure 1)

Adlin Abdul Majid JC:

A. Introduction

[1] The plaintiff filed an originating summons, seeking inter alia, a declaration that the affairs of the 3rd defendant have been conducted in a manner oppressive to the interest of the plaintiff. The 1st, 3rd, 4th and 5th defendants (collectively, the "defendants") opposed the originating summons.

[2] The court allowed the prayers in the originating summons, for the reasons set out below.

B. Background Facts

[3] The plaintiff and the 1st and 2nd defendants are siblings. Their other siblings are Gary Ho Yau Way ("Gary") and Kevin Ho Yau Kong.

[4] The plaintiff and the 1st and 2nd defendants incorporated the following companies:

a. The 3rd defendant, incorporated in 1992. The 3rd defendant's principal business is consultation, and the design and development of computer software, with focus on the concrete manufacturing and construction sectors. The directors and shareholders of the 3rd defendant are the plaintiff, the 1st defendant and Gary. The 1st defendant is responsible for the financial management and the day-to-day management of the 3rd defendant.

b. The 4th defendant, incorporated in 1994. The 4th defendant's principal business is consultancy and the trading of computer, software and information technology-related products, with focus on the property development sector. The directors and shareholders of the 4th defendant are the plaintiff, the 1st defendant, Ng Kim Chai, Goh Yew Chi and Lee Koh Yik.

[5] Further, the 1st defendant and Gary incorporated the 5th defendant in 2011. The 5th defendant is engaged in bookkeeping, finance and accounting advisory services. Its main customer base is the 3rd and 4th defendants' customers. The directors and shareholders of the 3rd defendant are the 1st defendant and Gary.

[6] The plaintiff claimed that an inspection exercise on the 3rd defendant revealed that the 3rd defendant had contravened requirements under the Companies Act 2016 (" CA "), amongst others, by failing to file income tax returns, annual returns, audited financial statements and to hold annual general meetings ("AGMs"). The plaintiff also claimed that the 3rd defendant had not complied with accounting standards, and that the accounts of the 3rd defendant are unreliable and are subject to serious misstatements.

[7] Further, the plaintiff alleged that there are entries in accounting records that show pay-outs made to the 4th and 5th defendants, for purposes unrelated to the 3rd defendant.

[8] The plaintiff therefore claimed that the 1st and 2nd defendants had conducted the affairs of the 3rd defendant in a manner that is oppressive to the plaintiff and is in disregard of his interest as a member of the 3rd defendant. The plaintiff filed the originating summons praying for inter alia, a declaration to that effect.

C. The Plaintiff's Claim

[9] The plaintiff filed the originating summons pursuant to s 346(1) of the CA . The provision reads:

"(1) Any member or debenture holder of a company may apply to the court for an order under this section on the ground:

(a) that the affairs of the company are being conducted or the powers of the directors are being exercised in a manner oppressive to one or more of the members or debenture holders including himself or in disregard of his or their interests as members, shareholders or debenture holders of the company; or

(b) that some act of the company has been done or is threatened or that some resolution of the members, debenture holders or any class of them has been passed or is proposed which unfairly discriminates against or is otherwise prejudicial to one or more of the members or debenture holders, including himself. "

[Emphasis Added]

[10] The plaintiff claimed that:

a. In failing to file audited accounts and hold AGMs, the affairs of the 3rd defendant are being conducted in a manner that is oppressive to or is in disregard of the plaintiff's interest as a member of the 3rd defendant. This allegation falls within s 346(1)(a) of the CA