The valuation provided by Ernst & Young failed to reflect a fair value due to reliance on biased assessments, necessitating an independent revaluation as mandated by the consent order.

Zainun Ali JCA:

(1) I have read the judgment of my learned brother Ramly Ali JCA. Since His Lordship had set out the facts of this appeal comprehensively, I am spared from having to do so, save to briefly state the salient points below.

(2) The joint liquidators are the liquidators of the 1st appellant (Folin Brothers).

(3) Folin Brothers is the majority shareholder holding 1,000,002 shares in the 1st respondent (Folin Food). The Minority Shareholders all hold one share each in Folin Food. Thus the balance two shares in Folin Food are held by Wong Boon Sun who is a bankrupt and the estate of Wong Foh Ling.

(4) A dispute arose between the joint liquidators and the Minority Shareholders, resulting in the Minority Shareholders filing a 181 Petition against the joint liquidators.

(5) The Minority Shareholders offered to purchase the shares held by Folin Brothers in Folin Food for the sum of RM7,136,680. Though the joint liquidators declined the offer, they agreed however, to appoint an independent valuer to ascertain the fair value of the shares of Folin Food to which the Minority Shareholders agreed. They also agreed that the said independent valuer was to be paid from the proceeds of the sale.

(6) On 4 June 2009, the joint liquidators and Folin Food entered into a consent order (the consent order) with the Minority Shareholders.

(7) Even as my learned brother Ramly Ali, JCA had outlined the terms of the said consent order, for the purposes of my view herein, it would be useful to once again list out the pertinent terms of the consent order. They are that:

(a) Ernst & Young was to be appointed as an expert to value the shares of Folin Food with unfettered and unrestricted access to the books of Folin Food.

(b) Upon ascertainment of a fair price of the shares of Folin Food, a sale and purchase agreement was to be entered into between the relevant parties within 30 days.

(8) Soon after the consent order was entered into, DW2 on behalf of Ernst & Young, communicated with the 2nd appellant for the relevant documents and information in relation to Folin Food in furtherance of their assignment under the consent order. However, the 2nd and 3rd appellants were not in possession of the relevant documents and information. It has been documented how DW2 was then directed by no less than the 2nd appellant himself, to get in touch with the 3rd respondents (Wong Sin Fan). Though the respondents made much of this fact to counter the appellants allegation of bias on Wong Sin Fans part, nothing turns on this, as would be unfolded later.

(9) It is undisputed that on 8 April 2009, ie, even before the consent order was entered into, Wong Sin Fan had appointed one estate valuer called First Pacific Valuers Property Consultants Sdn. Bhd. ("First Pacific Valuers") to conduct the valuation of the property.

(10) Undisputably too, Wong Sin Fan did not obtain the approval of the Board of Folin Food to appoint First Pacific Valuers.

(11) It is also undisputed that the fees paid to First Pacific Valuer were paid by Wong Sin Fan and not by Folin Food.

(12) More critical is the undisputed fact that the valuation was carried out by First Pacific Valuer as directed by Wong and that Ernst & Young prepared their report based on the valuation made by First Pacific Valuers, and Ernst & Yong then submitted a draft of the same to Wong Sin Fan on 26 August 2009.

(13) It is undisputed too that Wong Sin F