Mohd Saari Yusof JCA:

In the court below, the appellant ("the petitioner") applied to wind up the respondent ("the company") on the ground of just and equitable under s. 218(1)(i) of the Companies Act 1965("the Act"). The learned judged dismissed the petition, hence this appeal.

The company was incorporated on 30 December 1976 by the late Datuk A.S. Dawood with the object of carrying on his rubber estate business. The authorised capital of the company was RM3 million divided into 3 million ordinary shares of RM1 each. The amount of paid-up capital or credited as paid was RM1 million. The late Datuk A.S. Dawood caused his rubber estate land and buildings to be transferred to the company for sale consideration of RM999,998. At the time of inception of the company, the late Datuk A.S. Dawood and Ammajee Bibi bte Daud Sha ("the first wife") were the directors of the company. The existing directors were the first wife, Abdul Rahiman bin Datuk A.S. Dawood, Noorul Hug Mohamed Ayob.

The late Datuk A.S. Dawood caused the company to discharge the said sale consideration by way of allotment of 999,998 ordinary shares of RM1 fully paid in the share capital of the company on 26 October 1977. Suchallotment was being made as follows:

Name of allotteeNumber of shares alloted

the late Datuk A.S. Dawood 539,999

the first wife #9; 19,999

Abdul Rahiman #9; 20,000

The petitioner #9; 20,000

Other children of Datuk

A.S. Dawood 400,000

----------

999,998

----------

Following this allotment, 54% of the paid-up capital of the company was owned by the late Datuk A.S. Dawood while 46% was owned by members of his family.

The late Datuk A.S. Dawood who died on 3 April 1989 was survived by 4 wives and 20 siblings including the petitioner. During his life time, the late Datuk A.S. Dawood and the first wife executed an agreement dated 29 July 1981 whereby the late Datuk A.S. Dawood would transfer 390,000 out of 540,000 ordinary shares to his 4 wives and siblings. Under the proposed arrangement, the petitioner and members of the 4th family would get additional 110,000 shares. Further, the petitioner would be appointed as a director. But the agreement was never being implemented. The members of the 4th family supported the petition, who owned shares making a total equivalent to 13% of the whole shares.

In this appeal, issues for determination are:

(i) whether there existed a quasi-partnership;

(ii) whether substratum of the company had failed;

(iii) whether there existed oppressive conduct in the running of the company.

On Issue (i)

In the affidavit of Rahiman dated 15 September 1997 at para. 7 and 8 (p. 45 AR) he said:

7. The company was Incorporated in 1976 as a private exempt company. The private exempt status of the Company enable it to make loans to its shareholders. The Late Dawood and the 1st wife were the original subscribers and directors of the company. The Company was subsequently capitalised at RM1,000,000.00 consisting of 1,000,000 ordinary shares of RM1.00 each following the injection of certain of the Late Dawood's immovable assets Into It. Consequent to this injection, the Late Dawood retained to himself 540,000 ordinary shares and distributed the balance of shares amounting to 460,000 ordinary shares amongst his children and the aforesaid wives. I state that there was no specific formula on the part of the Late Dawood in making the aforesaid distributions. This was recognised to be a matter entirely in the discretion of the late Dawood. These matters can be gathered from exhibits marked "A" and "B" annexed to Ravuff's Petition.

8. Since 1976 and up to the death of the late Dawood In 1989, the Late Dawood retained control and management of the Company to the exclusion of others save for the 1st Wife. At all material times preceeding the death of the late Dawood, the Late Dawood took no Instructions from nor did any of his children have any right to question his acts and deeds. As a matter of fact, none of his children of the said wives