Oppressive conduct arises when majority shareholders sideline equal shareholders through invalid resolutions, violating fair dealing standards, justifying remedies under the Companies Act 2016.

[1] This case arises from a dispute between two equal shareholders and directors in a closely held company, with both parties alleging serious grievances against one another. At the core of the matter is the Plaintiff's claim of oppression under s 346 of the Companies Act 2016 , stemming from the passing of several resolutions that he contends were executed unlawfully and with the intent of excluding him from the management of the company. The key issues before the court include whether the impugned resolutions amount to oppressive conduct, whether the Plaintiff's shareholder rights have been unfairly disregarded, and what remedies, if any, are appropriate to resolve the deadlock and deteriorated relationship between the parties.

Background Facts

[2] The case concerns the 3rd Defendant, Paysolution Technologies Sdn Bhd ("the Company"), which was incorporated on 7 November 2007. The Company's shareholders are the Plaintiff, Sandeep Singh Grewal, and the 1st Defendant, Tan Eng Joo ("D1"), each holding 50,000 shares representing 50% shareholding. Both were also appointed as directors upon incorporation.

[3] The Company's primary business activity was property investment. Its business model involved purchasing properties, with both shareholders providing personal guarantees for bank financing, collecting rental income from the properties, using the rental proceeds to service the mortgage loans, and treating any surplus as profit. By March 2022, the Company had acquired approximately 15 properties, including units in Plaza Pantai, Sentral Bazaar Nilai, and properties in Ipoh and Penang.

[4] In 2017, the Plaintiff and D1 agreed to divide the management of their various business ventures between them. Under this arrangement, D1 was to handle the day-to-day management of the Company while the Plaintiff managed other companies.

[5] In 2019, RHB Bank commenced legal proceedings against the Company, the Plaintiff and D1 (Kuala Lumpur High court Suit No WA-22NCC-328-06/2019) due to alleged loan defaults. Following this, on 16 October 2019, the parties entered into a Mutual Understanding Agreement ("MUA") whereby D1 would make advances to the Company to repay outstanding loan sums to RHB Bank and sell the Company's properties at rates no lower than specified reserve prices. The RHB Bank suit was subsequently withdrawn.

[6] In or around 2021, the Plaintiff entered the premises of the Company, leading to legal proceedings by certain tenants against the Company, the Plaintiff and D1 in Kuala Lumpur High court Suit No WA-22NCvC-335-06/2022 ("Musang Valley suits"). While initially involving 25 plaintiffs, most of these claims were later withdrawn with only four plaintiffs refiling claims limited to the issue of trespass.

[7] On 13 October 2022, a Members' Written Resolution ("MR') was circulated for the appointment of the 2nd Defendant, Jiang Yihong ("D2"), as an additional director of the Company ("MR (D2S Appointment)"). On 17 October 2022, a Directors' Written Resolution ("DR") was circulated regardi