The court affirmed that minority shareholders are entitled to protection against oppressive conduct by majority shareholders, emphasizing the need for transparency and fairness in corporate governance.

JUDGMENT

Nurulhuda Nur'aini Mohamad Nor J:

[1] The Plaintiffs applicant filed this suit seeking for remedies under s 346 of the Companies Act 2016 (the Act)^[1] on allegation of oppression in respect of the carrying the affairs of the 7th Defendant. The reliefs sought are for the following declaration:

a) that the 1st, 2nd, 3rd and 4th Defendants acted jointly and/or severally:

i. in conducting the affairs of the 7th Defendant in a manner that is oppressive and in disregard of the Plaintiff's interests as members of the 7th Defendant; and

ii. caused the affairs and conducts of the 7th Defendant to be done in a manner which has and/or will unfairly discriminates against or which is or will otherwise to the Plaintiff as members of the 7th Defendant;

b) a declaration that the Plaintiffs are "locked-in" minority shareholders in the 7th Defendant;

c) a declaration that the Joint Venture Agreement dated 3 November 2022 entered between the 7th Defendant and PT Adau Agro Kalbar is null and void;

d) an order that the 5th-6th Defendants do buy-out and/or purchase the 1st and 2nd Plaintiff's shares in the 7th Defendant at a fair value based on the percentage of shareholdings of the 1st Plaintiff (Merge Jati Engineering Sdn Bhd) 16.4% and 2nd Plaintiff (How Ken Kon) 14.25%;

e) for the purpose of paragraph (4) above, an independent valuer (nominated by the Plaintiffs) and approved by this Court shall within 30 days from the date of this order, value the Plaintiffs shares in the 7th Defendant (determined value) and the valuation shall be conducted on the basis that:

i. the 7th Defendant is a going concern;

ii. by reference to the assets, profitability and prospects of the 7th Defendant; and

iii. On the basis of willing buyers, willing sellers and on pro rata basis with no discount on minority holding of the Plaintiffs in the 7th Defendant;

f) that within 7 days from the completion of the valuation of the shares held by the Plaintiffs, the valuer shall forward a copy of the report containing the Determined Value to all parties and have the same filed in Court via an affidavit pursuant to O 40 r 2 of the Rules of 2012;

g) that the 5th and 6th Defendants jointly and/or severally shall pay to the Plaintiffs the Determined Value based on the shareholding percentage in paragraph (4) above within 7 days from the expiry of the 30 days stipulated under paragraph (6) above;

h) Upon the full compliance of para 7 above and within 7 days, both the Plaintiffs shall resign their representative directors and to perfect the transfer of the Plaintiffs' shares in the 7th Defendant and to deliver such transfer documents together with the original certificates to the 7th Defendant's company secretary and the 7th Defendant's company secretary shall forthwith use the transfer documents to transfer all of the Plaintiffs' shares in the 7th Defendant;

i) an alternative order to paragraphs (e), (f), (g) and (h) above (the same relief as per paragraph 5, 6, 7 and 8 in encl 1), that the 7th Defendant be wound up by this Court ;

j) damages to be assessed;

k) parties at liberty to apply;

l) cost to be borne by the 1st to 6th Defendants jointly and severally and be paid to the Plaintiffs.

[2] Having perused the cause papers, having heard submissions by both parties and cross-referred to the relevant provisions of the law and authorities cited by both parties, this Court came to a finding that the affairs of the 7th Defendant were not conducted in accordance with its articles of association, there was mismanagement of the 7th Defendant's assets by failure to handle the 'assets' in an honest and professional manner by failure to secure a reasonably better price for disposal of the 7th Defendant's shares, there was mismanagement in the funds of the respondent resulting in it improperly utilized by the Defendants that gives rise to oppression, and allowed the reliefs sought albeit partially and some, with consequential modifications.

Background: Observation And Deduction By This Court

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