Court establishes oppression of minority shareholder under Companies Act, due to exclusion from management and denial of fair exit.

Introduction

[1] The Plaintiff owns 24% of the shares of Gallo (Sri Petaling) Sdn Bhd ("D4") whilst the other three Defendants own the majority. Teng Taim Sing ("D1") and Gan Chee Lin ("D2") own 10% each whilst Sea Films Sdn Bhd ("D3") holds 51%. The remainder 5% is held by one Wong See Kie who is not involved in these proceedings.

[2] D4 was incorporated in April 2017 with the primary purpose of operating a wine bar called the Gallo Wine Bar in Sri Petaling which had then commenced business operations in August 2017. The Plaintiff, D1 and D2 were the only appointed Directors of D4. The Plaintiff contends that it was the intention and agreed amongst the shareholders that he would have clear management powers within the new venture set up given his expertise in running his already owned and established "Gallo Wine Bar" in Taman Desa. The evidence also reveals that although both bars were separate in many respects, there appeared to be some overlap especially when it came to marketing and promotions and other aspects of the businesses of both.

[3] It is undisputed that the Gallo Sri Petaling business (hereinafter referred to as "GSP") subsequently faced a decline. At an EGM of D4 on 30 November 2019, the majority had resolved that GSP be ceased and that the Plaintiff be removed as a Director of D4. At the EGM, the Plaintiff had also proposed resolutions to the effect that if he was to be removed as a Director of D4 at such meeting and GSP ceased, then he had proposed resolutions relating to his exit as a shareholder and the manner in which D4's liabilities ought to be apportioned among the shareholders. At such EGM, the Plaintiff was voted out as a Director by the majority and none of his resolutions relating to his possible exit were tabled for discussion.

[4] Hence, currently, whilst the Plaintiff remains a 24% shareholder of D4, he is no longer a Director and alleges that he is kept out of its affairs.

[5] The Plaintiff's application via this OS is predicated on s 346 of the Companies Act 2016 (" CA ") whereby it is the bedrock of his case that the conduct of the majority (as highlighted above and elaborated hereinbelow) were oppressive and disregarded his interests as a shareholder and that there has been a visible departure from the standards of fair dealing which he was entitled to expect and therefore seeks such a declaration.

[6] The Plaintiff also seeks an order that the majority shareholders purchase his shares at a fair value or alternatively that D4 be wound up. The Plaintiff also contends that he had provided personal guarantees for debts incurred and taken for the benefit of D4 and thus also seeks remedies in relation to the discharge of the same.

[7] With the above background, I now propose to set out the facts in more detail, the law relating to an application pursuant to s 346 of the CA , followed by my analysis and decision.

The Facts

[8] The Plaintiff has set out the salient and summarized incontrovertible facts in respect of this matter which I will adopt and the detailed chronology of the same are as follows.

[9] The Plaintiff was at all material times the director and shareholder of one MK Bar Sdn Bhd ("MK Bar") which owns and operates a bar business called "Monkey Bar" located at Taman Desa, Kuala Lumpur. In 2016, the Plaintiff launched the Gallo Wine Bar at Taman Desa ("Gallo Taman Desa") in which the Plaintiff had single- handedly created, developed and/or marketed the "Gallo" brand as a wine bar business.

[10] On or about February 2017, the Plaintiff was approached by D1 who expressed an interest to start another "Gallo" wine bar business in the area Sri Petaling.

[11] D1 introduced the Plaintiff to D2 and D3 who intended to be