The appellate court must uphold a trial court's findings unless proven plainly wrong, especially regarding witness credibility in oppression claims under the Companies Act.

Introduction

[1] There are two appeals before us: Rayuan No 2-31-2009 (1st appeal) and Rayuan No 02-32-2009 (2nd appeal). Both appeals are by UEM Group Berhad (formerly known as United Engineers (Malaysia) Berhad).

[2] The 1st appeal was directed against the decision of the Court of Appeal on 14 July 2008. The Court of Appeal had reversed the decision of the High Court in granting a winding up petition by United Engineers (Malaysia) Bhd ("UEM") against UEM Genisys Sdn Bhd ("UEG"). The High Court had earlier found that the affairs of UEG were being conducted by Genisys Integrated Engineers Pte Ltd ("GIE") in a manner contrary to s 181 of the Companies Act 1965 ("the Act").

[3] The 2nd appeal was directed against the decision of the Court of Appeal on the consequential orders made on 7 November 2008. What had happened was this. The Court of Appeal after reversing the decision of the High Court in winding up UEG went a step further by inviting the parties to make further submissions on the issue of costs and consequential orders. After hearing the parties, the Court of Appeal, inter alia ordered UEM to buy-out GIE's 49% shares in UEG. The Court of Appeal also made some other consequential orders to give effect to the buy-out order. Hence, the 2nd appeal by UEM.

Background Facts

[4] The facts and events leading to these two appeals are these. On 2 November 1993, UEM and GIE entered into a joint venture agreement ("Shareholders Agreement") for both these companies to jointly venture into and exploit the mechanical and electrical engineering market in Malaysia. A private limited company called UEG was incorporated as the vehicle to carry out the joint venture. Under the Shareholders Agreement, UEM held 51% of the shares in the UEG and GIE held the remaining 49%.

[5] The Shareholders Agreement defined the roles of UEM and GIE in the joint venture. It also made it clear that the management and control of UEG was to be vested in its Board of Directors. However, the day to day management of its business and affairs were delegated to Chief Executive Officer (CEO), Seow Boon Cheng ("Seow"). Seow was also the Managing Director and majority shareholder of GIE.

[6] The venture between UEM and GIE started very well. Considerable amount of contract works was awarded by UEM and its related companies to UEG. However, in 1997, UEM decided to dispose of its non-core business. UEG was considered to be its non-core business and accordingly it set about identifying a buyer to dispose of its shares in UEG. UEM then entered into a sale and purchase agreement to sell its 51% shareholding in UEG to Nova Nusantara for RM1.02 million with an added sweetener that "listing of UEG is to be attempted within three years of the takeover".

[7] When GIE learned about the deal between UEM and Nova Nusantara, it wrote to UEM reminding UEM about cl 12.3 of their Shareholders Agreement. Under cl 12 of the Shareholders Agreement, a member intending to transfer its shares, should offer them to the existing members. It means UEM should have first offered its shares in UEG to GIE. In the same letter, GIE expressed its willingness to purchase from UEM its UEG shares on the same terms as those proposed by Nova Nusantara with one difference, that was, that the duty on GIE to take steps to have UEG listed would expire at the end of the three years