Court clarified that claims of corporate loss require adherence to the Companies Act's provisions, specifically distinguishing between personal grievances and corporate injuries under oppression and derivative actions.

JUDGMENT

Abdul Wahab Mohamed J:

Introduction

[1] The Plaintiff, Chai Sin Fah had filed an originating summon dated 8 May 2020 ("Enclosure 1") seeking, inter alia, the leave of this court to commence an action, by way of writ, in the name of the 3rd Defendant, Atlantis Engineering & Construction Sdn Bhd against the 1st Defendant, Tan Yu Ping and the 2nd Defendant Hee Kah Pau.

Background Facts

[2] The Plaintiff and the 1st Defendant had in the year 1998 purchased the 3rd Defendant, Atlantis Engineering & Construction Sdn Bhd, a private limited company with shares ("hereinafter referred to as 'Atlantis'). Both the Plaintiff and the 1st Defendant were appointed as the directors of Atlantis on 8 May 1998.

[3] Sometime in the year 2007, the 2nd Defendant were invited by the Plaintiff and the 2nd Defendant to invest in Atlantis. The 2nd Defendant held 20% shares whilst the Plaintiff and the 1st Defendant each held 40% shares to Atlantis. The 2nd Defendant was then appointed as the director of Atlantis on 9 March 2007.

[4] The Defendants claimed that a Mr Leow Suan Yang (IC No 760912-08-5885) ("LSY") was also invited to invest in Atlantis. LSY had allegedly contributed to the capital of Atlantis between 3 August 207 until 15 May 2014 which amounted to 20% of Atlantis's paid-up capital. It was then agreed between parties that LSY's 20% shares will be distributed and held on trust by the Plaintiff and the 1st Defendant equally.

[5] At or around November 2019 to December 2019, the 1st Defendant was informed by Atlantis's employees that the Plaintiff's son and/or wife had accessed and removed Atlantis's documents from Atlantis's registered office.

[6] The Plaintiff had alleged suspicion of fraud and misappropriation of the Atlantis's funds committed by the 1st and 2nd Defendants.

[7] It was the Plaintiff's contention that, after the investigation was made into the accounts and ledgers of Atlantis, the 1st and 2nd Defendants were suspected to have committed the fraud and misappropriation to the Atlantis's funds based on the following suspicions found:

(a) Fictitious cash withdrawals;

(b) Payroll fraud - workers salary and levy;

(c) Forged payment vouches made to subcontractors;

(d) Withdrawal of Atlantis's paid up capital;

(e) Vast different in director repayments amounts for the years 2016 - 2018; and

(f) Fictitious bank statement worksheet entry.

[8] The Plaintiff then instructed his solicitors to issue the Notice of Demand to the 1st and 2nd Defendants vide a letter dated 17 February 2020, inter alia informing the 1st and 2nd Defendants of the various infractions discovered.

[9] The 1st and 2nd Defendants had allegedly proceeded to call for a meeting vide Notice of Meeting dated 13 March 2020 for a Directors' meeting to be called on 16 April 2020, with the alleged main agenda of removing the Plaintiff as a Director of Atlantis for the alleged breach of Companies Act 2016 .

[10] The Plaintiff's solicitors had then proceeded to issue the Statutory Notice pursuant to s 348 of the Companies Act 2016 dated 23 March 2020 to protect the Atlantis's interest.

[11] After the required period of time under s 348 of the Companies Act 2016 had expired, the Plaintiff had instructed his solicitors to proceed with filing encl 1.

[12] In relation to the EGM which was supposed to be held on 16 April 2020, the quorum was not reached due to the Movement Control Order in place at the material time. The same was rescheduled to 15 May 2020. Before the rescheduled EGM could take place, the Plaintiff's solicitor had filed this encl 8 application on 14 May 2020 and the same was served on the 1st and 2nd Defendants, with a notice to not proceed with the EGM on 15 May 2020 until encl 8 was heard and disposed of to preserve the integrity of encl 8.

[13] However, the 1st and 2nd Defendants had proceeded with the EGM which had led to the removal of the Plaintiff as a Director of Atlantis.

[14] The encl 8 application was then disposed of and the determination of encl 1 thus becomes cruc