The court retains broad discretion in oppression actions under Section 346 of the Companies Act 2016, despite claims of limited statutory relief.

[1] The plaintiffs in this case commenced an action against the defendants alleging oppression of the minority. The defendants applied to strike out the plaintiffs' action. The 7th to 9th defendants also applied to remove the 1st plaintiff on the basis of misjoinder.

[2] After hearing submissions, I allowed the striking out of the 1st plaintiff and the misjoinder application. I refused the striking out of the 2nd plaintiff.

Background

[3] Setia Haruman Sdn Bhd is the master developer of Cyberjaya. This dispute arose between the three ultimate beneficial owners of Setia Haruman: Datuk Kasi Palaniappan (the 1st plaintiff) on the one hand, and Tan Sri Mustapha Kamal (the 2nd defendant) and UEM Land Berhad (the 9th defendant) on the other Impresive Circuit Sdn Bhd, the 2nd plaintiff, is a company controlled by Datuk Kasi and is a shareholder in Setia Haruman. The 3rd to the 8th defendants are Directors of Setia Haruman. The 3rd to the 5th plaintiffs are the children of Tan Sri Mustapha Kamal. The 7th and 8th defendants sit on the board of Setia Haruman as nominees of UEM Land Berhad.

[4] The shareholding structure of Setia Haruman is set out in a diagram at para 16.

The Scope Of Section 346 Of The Companies Act 2016

[5] It was contended by Dato' Pathmanathan for the 2nd to 6th defendants that there has been a fundamental change to the written law relating to minority oppression with the introduction of s 346 of the Companies Act 2016 . In gist, he argued that the broad discretion granted to the court to order any relief that it considers fit has now been removed, and that the courts may only grant the specific reliefs that have been expressly set out in paras (a) to (e) of s 346(2). Because the reliefs prayed for by the plaintiffs did not accord precisely with those provided for in s 346(2), it was contended by Dato' Pathmanathan that the action ought to be summarily dismissed.

[6] The reason put forward for this construction was the difference in the wordings of s 346(2) of the Companies Act 2016 and s 181(2) of the Companies Act 1965. These two sections are juxtaposed in the following table to illustrate the difference.

(2) If on such application the court is of the opinion that either of those grounds is established the court may, with the view to bringing to an end or remedying the matters complained of, make such order as it thinks fit and without prejudice to the generality of the foregoing the order may:

(a) direct or prohibit any act or cancel or vary any transaction or resolution;

(b) regulate the conduct of the affairs of the company in future;

(c) provide for the purchase of the shares or debentures of the company by other members or holders of debentures of the company or by the company itself;

(d) in the case of a purchase of shares by the company provide for a reduction accordingly of the company's capital; or

(e) provide that the company be wound up.

(2) If on such application the court is of the opinion that either of those grounds is established, the court may make such order as the court thinks fit with the view to bringing to an end or remedying the matters complained of, and without prejudice to the generality of subsection (1), the order may:

(a) direct or prohibit any act or cancel or vary any transaction or resolution;

(b) regulate the conduct of the affairs of the company in the future;

(c) provide for the purchase of the shares or debentures of the company by other members or debenture holders of the company or by the company itself;

(d) in the case of a purchase of shares by the company, provide for a reduction accordingly of capital of the company; or

(e) provide that the company be wound up.

[7] The difference in wording that is germane for consideration is emphasised in the excerpts above.

[8] In s 181, the word "foregoing" referred to the