A shareholder lacks a direct claim to a company's assets and must establish standing to sue for losses affecting the company, especially where claims are rooted in illegality.

JUDGMENT

Quay Chew Soon JC:

Introduction

[1] The 1st Defendant ("D1") and the 2nd Defendant ("D2") jointly filed an application vide encl 14 ("encl 14") to strike out the Plaintiffs ("P") Writ of Summons and Statement of Claim ("SOC"). Enclosure 14 was made under O 18 r 19(1) (a), (b), (c) or (d) of the Rules of 2012 ("Rules of ") or under the inherent jurisdiction of the Court.

[2] Likewise the 3rd Defendant ("D3") and the 4th Defendant ("D4") jointly filed an application vide encl 9 ("encl 9") to strike out P's writ and SOC. Enclosure 9 was made under O 18 r 19(1)(a), (b) or (d) of the Rules of or under the inherent jurisdiction of the Court.

[3] D1, D2, D3 and D4 are collectively referred to as the "Defendants". I allowed both encl 14 and encl 9. These are the grounds of my decision.

Background

[4] P sues in his capacity as a former director and shareholder of Astacanggih Sdn Bhd ("Astacanggih"). P's action is based on the torts of conspiracy, conspiracy to defraud, undue influence and conversion allegedly committed by the Defendants which resulted in losses allegedly suffered by P in relation to an Acquisition Agreement dated 16 May 2007 ("Acquisition Agreement").

[5] The parties to the Acquisition Agreement are Awan Megah Sdn Bhd ("Awan Megah") and Astacanggih. The Acquisition Agreement concerns the acquisition of certain lands in Bukit Raja, Klang, Selangor ("Land") by Astacanggih.

Plaintiffs Case

[6] From the SOC, P's claim is premised on his allegations that:

(a) D1, in his capacity as the then Minister of Defence, approved the acquisition of the Land by Astacanggih through the Acquisition Agreement. For approving the Acquisition Agreement, D1 requested RM30 million as 'consideration' to be paid in cash to his brother, Dato' Ahmad Johari bin Tun Abdul Razak ("JR"). P was at the material time the majority shareholder and a director of Astacanggih.

(b) Raja Ropiaah bte Raja Abdullah ("RR") was at the material time a director and substantial shareholder of Awan Megah and was D1 and D2's close associate or proxy. Following an alleged breach of the Acquisition Agreement by Awan Megah ("AA Breach"), Astacanggih commenced Kuala Lumpur High Court Civil Suit No:21NCVC-253-12/2011 ("Suit 253") for breach of contract. RR is alleged to have been responsible for causing the AA Breach. Astacanggih was allegedly compelled to withdraw Suit 253 ("Suit 253 Withdrawal") as a result of pressure exerted by D1 and D2.

(c) P was forced by D1 and D2 to sell 80% of the shares in Astacanggih to D4 by way of a share sale agreement dated 20 December 2012 ("Share Sale"). D1 and D2 ordered D3 to enter into the Share Sale through D4, which is a wholly owned subsidiary of D3. P says that he later tried to buy back the shares in Astacanggih from D4 but was unsuccessful.

(d) After the Share Sale, D1 and D2 ordered D3, through D4, to enter into a sale and purchase agreement dated 27 December 2012 for the purchase of the Land ("Land Sale"). Thereafter D1 and D2 ordered D3, through D4, to cause Astacanggih to sell the Land to UMW Holdings Bhd for a huge profit ("UMW Sale").

(e) P, as the majority shareholder of Astacanggih, has suffered loss by reason of the AA Breach, the Suit 253 Withdrawal, the Share Sale, the Land Sale and the UMW Sale.

[7] The background facts are as follows:

(a) There was a Privatisation Agreement dated 8 June 2005 ("Privatisation Agreement") entered into between Awan Megah, the Government of Malaysia ("Government") and Syarikat Tanah dan Harta Sdn Bhd ("STH"). The Defendants are not parties to the Privatisation Agreement nor the Acquisition Agreement.

(b) The Land was the consideration offered to STH under the Privatisation Agreement for the development of a National Defence Education Centre. Under the Privatisation Agreement, it was agreed that the Land will be transferred to Awan Megah.

(c) Awan Megah then entered into the Acquisition Agreement with Astacanggih whereby the Land would be transferred to Cebur Megah Development Sdn Bhd ("Cebur Megah