The court established that oppressive conduct by majority shareholders justifies winding-up under Section 346 of the Companies Act, 2016, emphasizing the protection of minority shareholder interests.

JUDGMENT

Leong Wai Hong J:

[Oppression Of Shareholder]

The Legislative History Of Relief Against Oppression Of Minority Shareholders

[1] The law recognises that although the will of the majority binds shareholders in a company, it will intervene if the act of the majority leads to tyranny.

[2] In Malaysia, the legal intervention against the tyranny of the majority comes in the form of s 181 of our Companies Act, 1965 which is the predecessor of our current s 346 Companies Act, 2016 Act 777 (" CA 2016").

[3] According to Lord Wilberforce in Re Kong Thai Sawmill (Miri) Sdn Bhd; Kong Thai Sawmill (Miri) Sdn Bhd & Ors v. Ling Beng Sung; [1978] 2 MLJ 227 , s 181 of our Companies Act,1965 "trace its descent from s 210 of the United Kingdom Companies Act, 1948 which was introduced in that year in order to strengthen the position of minority shareholders in limited companies."

[4] Section 210 of the United Kingdom Companies Act 1948 was enacted after the United Kingdom accepted a recommendation from the Cohen Committee chaired by Lord Cohen which recommended the introduction of an alternative remedy of oppression in s 210 to the only remedy then available which was the winding-up of the company. [See the Report of the Committee on Company Law Amendment [1945], known in short as the Cohen Report and Umakanth Varottil, "Unpacking the Scope Of Oppression, Prejudice And Mismanagement Under Company Law In India," NUS Law Working Paper 2020/020, July 2020, www.law.nus.edu.sg/wps/].

Overview Of The Case Before Me

[5] On 25 July 2023, the plaintiff filed an Originating Summons ("OS") seeking reliefs under s 346 of the CA 2016 on the grounds that the 1st, 2nd and 3rd defendants have conducted and/or are conducting the affairs of the 4th defendant, NEP Holdings (Malaysia) Berhad ("NEP"), and/or are exercising their powers as Directors in a manner oppressive or unfairly prejudicial to the plaintiff and/or in disregard of the plaintiff's interest as a member of NEP.

[6] The plaintiff is a minority shareholder of NEP holding 251,451 or 20% shares.

[7] It is not in dispute that the plaintiff became a minority shareholder arising from the plaintiff's investment of RM60 million in NEP in 2016.

[8] For the purposes of this Judgment, the term "oppression", when used in isolation by me, is used as a short form to refer to the entire range of conduct prohibited by s 346 of the CA 2016.

Plaintiff's Claim For Oppression

[9] The plaintiff's claim for oppression is based on the following [undisputed] breaches by the 1st to 3rd defendants as of June 2023:

i. the failure to hold a Board Meeting of NEP since 6 May 2021 despite the plaintiff's numerous requests to do so;

ii. the failure to call or convene NEP's Annual General Meeting ("AGM") for the Financial Years Ended ("FYE") 30 June 2021 and 30 June 2022. NEP's last AGM was on 6 May 2021;

iii. the failure to made available and/or table for approval before the Board of Directors or any AGM of NEP the Audited Financial Statements of NEP for FYE 2021 and 2022;

iv. the failure to declare and pay dividend for FYE 30 June 2020 that was decided during NEP's Board Meeting of 14 September 2020;

v. the failure to disclose information pertaining to the financial affairs of NEP post-2021 after the plaintiff had obtained accounting records up to 2020 pursuant to an Inspection Order obtained by a court order dated 10 June 2022; and

vi. serious allegations have been made against the 1st defendant by members of the public who were induced to invest and become iPartners in NEP's subsidiary. The 1st defendant has completely shut out the plaintiff in responding to these serious allegations.

[See encl 58 plaintiff's written submissions at para 2]

1st, 2nd And 4th Defendants' Reply

[10] The 1st, 2nd and 4th defendants in their reply written submissions dated 8 April 2024 in encl 131 do not deny the facts contained in the six oppressive grounds cited by the plaintiff.

[11] Strangely, at para 1 they said they would rely on the 3rd defendant's Sub