The court held that the independent valuer must be suitably qualified and able to conduct a comprehensive valuation, emphasizing the importance of expertise over cost in shareholder oppression cases.

JUDGMENT

Atan Mustaffa Yussof Ahmad J:

[1] This judgment concerns an application to appoint an independent valuer to determine the fair value of shares in a private limited company following a court order in a shareholders' dispute. The application arises from the parties' inability to agree on the selection of a valuer as mandated by the court's previous order. At the heart of this dispute are conflicting proposals for potential valuers with significant disparities in their quoted fees and proposed scopes of work. The applicant seeks the appointment of a well-established firm with international connections, citing its expertise and comprehensive approach to the valuation task. Conversely, the respondents propose alternative valuers with substantially lower fee quotes, arguing that these firms possess sufficient expertise for the task at hand. This case raises important questions about the criteria for selecting an independent valuer in complex shareholder disputes, the relevance of fee structures in such appointments, and the necessary qualifications for conducting a thorough and impartial valuation. Additionally, it highlights the challenges in balancing the need for a comprehensive valuation against concerns of cost-effectiveness, particularly in cases involving allegations of financial impropriety. The court must now navigate these competing considerations to ensure a fair and just resolution that gives effect to its previous order.

Backgrounds Facts

[2] The Plaintiff, Lam Kim Kai, and the 1st Defendant, Har Kah Seng, are shareholders and Directors of the 3rd Defendant, Apec Fasa Sdn Bhd ("Apec Fasa"), a company incorporated on 29 September 2021. The 2nd Defendant, Phon Chooi Peng, is the wife of the 1st Defendant and worked as the Human Resource Manager of Apec Fasa, from 5 October 2022.

[3] On 2 November 2023, the Plaintiff filed an Originating Summons against the 1st and 2nd Defendants, alleging that they had oppressed his rights as a minority shareholder of Apec Fasa.

[4] On 5 April 2024, the High court allowed the Originating Summons with costs of RM50,000.00. In its brief grounds of judgment, the court found that:

a) The 1st and 2nd Defendants had persistently suppressed Apec Fasa's accounting records from the Plaintiff for a prolonged period of 2 years.

b) There was a clear pattern of misuse of Apec Fasa's funds by the 1st and 2nd Defendants to the oppression of the Plaintiff's as a minority shareholder. This included making false claims, unverified claims, misuse of funds for personal benefit, and making unauthorised transfers to a related company.

c) The Plaintiff was placed in an unfair "locked-in" minority position due to the 1st Defendant's behavior.

[5] The court Order dated 5 April 2024 (encl 73) included several directives, including:

a) the 1st and 2nd Defendants were to provide full access to Apec Fasa's accounting records to the Plaintiff within 7 days [para (a) of encl 73].

b) the 1st Defendant was ordered to purchase all of the Plaintiff's shares in Apec Fasa at a fair value determined by an independent valuer, with the valuer's fees to be borne by the 1st Defendant and/or the 2nd Defendant jointly and severally [para (d) of encl 73].

[6] There was no appeal against this Order.

[7] Following the court Order, the parties were unable to agree on the appointment of an independent valuer. On 24 May 2024, the Plaintiff filed an application to resolve this impasse and give effect to para (d) of the court Order in encl 73.

[8] The Plaintiff proposed Moore Stephens Associates PLT ("MSA") as the independent valuer. MSA provided a fee quote of RM113,400.00 (including tax) for the valuation exercise.

[9] The 1st and 2nd Defendants proposed three alternative valuers:

a) Ng Kim Heng & Associates ("NKH"), with a fee quote of RM3,000.00 for "share valuation advisory services".

b) True Balance Sdn Bhd ("True Balance"), with a fee quote of RM6,000.00 (excluding out-of-pocket expenses) for preparing the share valuation report.

c) myStrateg