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2021 MarsdenLR 567
HIGH COURT MALAYA KUALA LUMPUR
SAFARI ALLIANCE SDN BHD – Appellant
Versus
TAN LEE CHIN & ORS – Respondent
[Originating Summons No: WA-24NCC-229-06-2020]
The exercise of proxy rights and shareholder complaints must directly pertain to the complainant's individual position as a member, not extended representations on behalf of others.
Headnote:(A) Companies Act 2016 – Section 346 – Oppression action against board decisions during AGM – Plaintiff claimed oppression due to rejection of proxy forms and inability to appoint directors – The court found rejection of proxy forms valid and plaintiff lacked locus standi to challenge the board's decisions, as issues raised did not pertain directly to plaintiff's own rights as a shareholder. (Paras 48, 54, 92, 169)
(B) Proxies – Requirements for valid appointment of proxies – Chairman's rejection of proxies based on proper naming and identification of proxies was upheld. (Paras 114, 121)
Facts of the case: The plaintiff, a substantial shareholder, initiated action against the defendants following the AGM where several proxy forms were rejected. The plaintiff sought to declare actions during the AGM oppressive under Section 346 of the Companies Act 2016.
Findings of Court: The court dismissed the plaintiff's summons and upheld the validity of the Chairman's rulings regarding proxy forms and appointments due to lack of compliance with statutory requirements.
Issues: The court addressed whether the Chairman's rulings at the AGM constituted oppression within the meaning of Section 346 and the plaintiff's standing to raise complaints on behalf of other shareholders.
Ratio Decidendi: The court emphasized that the conduct of Chairman at the AGM, while acting in that capacity, was separate from the board's exercise of power and did not constitute oppression under Section 346, reaffirming that such actions must directly affect the voting rights of the complainant.
Result: The plaintiff's claims were dismissed, and costs were awarded against the plaintiff. (Paras 174, 182)
JUDGMENT
(Enclosures 1, 3 And 16)
[1] This was an action by plaintiff against the defendants vide Originating Summons dated 23 June 2020 for oppression pursuant to s 346 of the Companies Act 2016 (" CA 2016") ("Originating Summons").
[2] In its Originating Summons, the plaintiff sought for a total of 20 declaratory orders and 10 orders consequential to the declarations, not including the sub-prayers, covering about 13 pages of the English version of the Originating Summons.
[3] This Originating Summons essentially concerns the decisions made and resolutions passed at the Annual General Meeting of the 8th defendant held on 9 June 2020 at 11.00 am. ("AGM").
[4] The main declarations sought in this Originating Summons are as follows:
"1. A declaration that the affairs of the 8th defendant are being conducted in a manner oppressive to the members of the 8th defendant;
2. A declaration that the following rulings made by the 1st defendant during the Annual General Meeting ("AGM") of the 8th defendant held on 9 June 2020 at 11.00 am. whereby the 1st defendant had:
2.1. rejected the proxy form of Tan Say Cheong appointing the Chairman of the meeting to vote on his behalf and carrying the votes for 69,523,800 shares in the 8th defendant;
2.2. rejected the proxy form of Lau Teng Fun & Sons Sdn Bhd appointing the Chairman to vote on its behalf and carrying the votes for 55,400,000 shares in the 8th defendant;
2.3 rejected the proxy form of Koh Pee Seng appointing the Chairman to vote on his behalf and carrying the votes for 1,000,000 shares in the 8th defendant;
2.4 rejected the proxy form of Foo Meng Ju appointing the Chairman to vote on her behalf and carrying the votes for 500,000 shares in the 8th defendant;
2.5 rejected the proxy form of Wong Guang Seng appointing the Chairman to vote on his behalf and carrying the votes for 30,010,000 shares in the 8 th defendant."
are null and void and of no effect whatsoever."
[5] The other declarations that were sought are substantially consequential to and arise from the reliefs sought in the above prayers 1 and 2 of this Originating Summons while the other orders sought are essentially a revision of the results of the AGM by reversing their outcome.
[6] By way of Notice of Application dated 23 June 2020 ("encl 3") the plaintiff sought, inter alia, the following interim reliefs against the defendants:
"1. An order that the 1st to 7th defendants be prohibited from using the funds of the 8th defendant in defending this suit and/or any other suit arising therefrom;
2. An order that the 8th defendant be prohibited from issuing and/or allotting new shares pending the disposal of this Originating Summons."
[7] By way of Notice of Application dated 25 June 2020 ("encl 16") the plaintiff sought, inter alia, the following interim reliefs against the 2nd and 3rd defendants:
"1. That the 2nd and 3rd defendants be and are hereby restrained from acting as or otherwise holding themselves as directors of the 8th defendant;
2. That the 2nd and 3rd defendants be and are hereby restrained from attending or participating in any board meetings and/or any other affairs of the 8th defendant;
3. An order that the 8th defendant publish via an announcement made on Bursa Malaysia Securities' website for the making of announcements that the Inter-Partes Interim Injunction has been granted within 24 hours from when the Order is pronounced by this Honourable Court."
[8] An Ex Parte Injunction Order was granted substantially in respect of prayer 1 of encl 3 on 25 June 2020 to restrain the 8th defendant from issuing and allotting new shares pursuant to Resolution No 5 passed at the AGM. By consent of parties, an Ad Interim Injunction Order was then granted on 7 July 2021 upon essentially the same terms as the Ex Parte Injunction save for reference to Resolution No 4 instead of 5, until the disposal of encl 3.
[9] This Originating Summons was heard together with encls 3 and 16 and the hearing took two days to complete
