A minority shareholder must demonstrate actual oppression or disregard of interests to succeed in a claim under Section 346 of the Companies Act 2016.

JUDGMENT

Abdul Wahab Mohamed J:

Introduction

[1] The Plaintiff is a minority shareholder (17.6%) of Jitsin Pack Sdn Bhd ("the Company"). The Plaintiff had mounted an oppression claim against the Defendants pursuant to s 346 of the Companies Act 2016 , asserting that the Company's affairs were administered in a manner oppressive to the Plaintiff as a minority shareholder.

[2] The Plaintiff sought to compel the 1st to 3rd Defendants to acquire all of the Plaintiff's shares in the Company or to initiate a winding-up of the Company as a consequence.

Background Facts

[3] The Plaintiff has served as the Managing Director of the Company since its formation in 1984 until 24 June 2022; and as Director until 23 June 2023.

The shareholdings of the Company are split in the following manner:

[4] At the time of filing this proceeding, the 1st Defendant, the 2nd Defendant, Chin Si Loo ("CSL"), Chin Kin Liew ("CKL") and the Plaintiff held directorial positions within the Company. The Plaintiff was not re-elected as a Director at the Annual General Meeting ("AGM") held on 23 June 2023, while the others remained as Directors of the Company.

[5] The 1st Defendant, CSL, and CKL, are brothers; and the 1st Defendant, together with CSL, are the Directors of the 3rd Defendant.

[6] In brief, the Plaintiff's complaints are as follows:

(a) The Plaintiff's termination as Managing Director, after serving for 35 years, was executed without adherence to the Articles of Association;

(b) The Plaintiff was removed as Commissioner of an associated company in Indonesia without their knowledge and consent, as well as without the knowledge and consent of the Company's Board of Directors;

(c) The Plaintiff was deprived of information regarding the Company's RM7.3 million investment in its associated company in Indonesia by the majority shareholders;

(d) The majority shareholders have endorsed an individual with a conflict of interest (the 1st Defendant's son) to lead the associated company in Indonesia for their own personal advantage;

(e) The majority shareholders, on the Board of Directors, refused to respond to inquiries regarding the Company's Financial Statements;

(f) The majority shareholders have neglected to furnish the Plaintiff with the Financial Statements for review prior to the Annual General Meeting, yet proceeded to endorse them without due consideration;

(g) The majority shareholders have also sanctioned the transfer of substantial sums of money from the Company to the associated company in Indonesia without providing any justification;

(h) The majority shareholders have failed and/or refused to declare dividends for their personal gain in the associated company in Indonesia;

(i) The majority shareholders have failed and/or refused to consider the Plaintiff's proposal to sell his shares;

(j) The majority shareholders, on the Board of Directors, have failed and/or refused to answer the Plaintiff's queries and his rights (as a Director) to inspect the Company's accounts;

(k) The majority shareholders have removed the Plaintiff from the Board of Directors;

(l) The Plaintiff does not have any confidence in the conduct of the Board of Directors, which consists of the majority shareholders.

[7] The Plaintiff's action fundamentally embodies a claim of oppression pursuant to s 346(1) of the Companies Act 1965 (" CA 1965").

The Law

[8] Section 346 of the CA 2016, which is in pari materia to s 181 of the 1965 outlines the remedial measures available to minority shareholders when faced with oppressive actions within a company. The pertinent excerpt of the aforementioned section reads as follows:

"Remedy in cases of an oppression

346. (1) Any member debenture holder of a company may apply to the Court for an order under this section on the ground:

(a) that the affairs of the company are being conducted or the powers of the Directors are being exercised in a manner oppressive to one or more of the members or debenture holders, including himself or in disregard of his or their int