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2025 MarsdenLR 5425
HIGH COURT MALAYA KUALA LUMPUR
Mohd Arief Emran Arifin, J
LEE BEE SUN – Appellant
Versus
SIEW SEOW KIM & ORS – Respondent
[Originating Summons No: WA-24NCC-249-05-2024]
A shareholder cannot claim oppression under Section 346 of the Companies Act without established evidence of oppressive conduct or a quasi-partnership agreement entitling them to participate in management.
Headnote:(A) Companies Act 2016 - Section 346 - Minority oppression claim - Plaintiff alleged oppression by majority shareholders - Claims included refusal to purchase shares at suggested price, payments made without her approval, and removal from management - Court found no evidence of oppressive conduct or violation of fair dealing standards by the majority - Plaintiff's rights derived from her position as a Director, not a shareholder - Claim dismissed for failing to establish requisite grounds for oppression. (Paras 1-64)
(B) Oppression - Definition and requirements - Majority control is legitimate unless it crosses into oppression or disregard of minority rights - Definition of oppression requires identifiable conduct that violates fairness standards. (Paras 22-28)
(C) Company affairs - Shareholding does not guarantee active participation in management without express agreement or quasi-partnership elements - Conduct of Directors must be for company's benefit, not personal interests. (Paras 24-30)
| Table of Content |
|---|
| 1. minority oppression claim details (Para 1 , 2 , 3) |
| 2. alleged oppression acts described (Para 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14) |
| 3. defendants' denial of wrongdoing (Para 16 , 17 , 18 , 19 , 20 , 21 , 22) |
| 4. applicable law on minority oppression (Para 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30) |
| 5. plaintiff's claims lack foundation (Para 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40) |
| 6. court's evaluation of alleged oppressive acts (Para 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49) |
| 7. access to company management rights (Para 50 , 51 , 52 , 53 , 54 , 55 , 56) |
| 8. rejection of claims due to insufficient evidence (Para 57 , 58 , 59 , 60 , 61 , 62 , 63) |
(Originating Summons — Minority Oppression Claim)
A.Introduction
Summary Of The Plaintiff's Claim
[1] The Plaintiff claims that the actions of the 1st and 2nd defendants have been oppressive or have unlawfully disregarded her interests as a shareholder of the Company. She argues that there has been a visible departure from the standards of fair dealing, and that the actions of the 1st and 2nd defendants sufficiently violate these standards, constituting a breach of fair play. Therefore, she now seeks the remedies available under s 346 of the Companies Act 2016 .
B. Brief Facts
[2] The 3rd defendant, Super Resources & Trading Sdn Bhd, was incorporated by Goh Wei Lim, Yip Kien Meng, Wong Chee Wai, and Sok Kok Leong on 8 October 2003. At the material time, the Directors of the Company were Goh Wei Lim, Wong Chee Wai, and Soh Kok Leong. Goh Wei Lim is the Plaintiff's husband.
[3] Thereafter, the shares were transferred to third parties. The current shareholders in the Company are (i) the Plaintiff, who holds 200,000 of the shares in the 3rd defendant, and (ii) the 1st defendant, who holds 300,000 of the shares in the Company. The Directors of the Company are Goh Wei Lim, her husband, the Plaintiff, and the Defendants.
[4] The complaints filed by the Plaintiff are summarised in the following paragraphs.
(i) Alleged Oppression In The Decision Not To Purchase The Plaintiff's Shares At The Price Suggested By The Plaintiff — Oppressive Act 1
[5] The Plaintiff claims that the parties had agreed, in principle, that the shares held by her in the Company and other shares held by her and Goh Wei Lim are to be sold to the 2nd defendant.
[6] The Plaintiff contends that she had suggested the sum of RM5,000,000.00 being a reasonable sum that should be paid by the 2nd defendant. The 2nd defendant disagreed and suggested that the shares in the companies are only worth RM3,000,000.00. This was discussed at the meetings held on 4 April 2024, 22 April 2024, 3 May 2024, and 6 May 2024. The valuation of the 3rd defendant was also put forth during the meeting on 3 May 2024.
[7] There were allegedly heated discussions between the Plaintiff and the Defendants at these meetings. At the meeting held on 6 May 2024, apparently, the Plaintiff was not allowed to speak, and the 1st and 2nd defendants had made a proposal to the Plaintiff to consider. The proposal relates to the offer to purchase her shares in toto. A solicitor was also tasked to draft the sale and purchase agreement.
(ii) Alleged Payments Made By The Company For The Debts Of Third Parties — Oppressive Act 2
[8] As I have indicated earlier, Goh Wei Lim, the Plaintiff's husband, is a Director of the Company. He is also the Director responsible for approving the payments to be made by the Company through its Internet banking account.
[9] The Plaintiff alleges that Goh Wei Lim was forced to agree and approve payments made to PUM Cullet Sdn Bhd and LKF Marketing Sdn Bhd without obtaining any approval from the Plaintiff. The Plaintiff suggests that the said payments were made on behalf of MYGRIT Abrasive Sdn Bhd. The 3rd defendant holds 40% of the shares in MYGRIT Abrasive Sdn Bhd.
[10] The Plaintiff had raised her objection to the said payment and was rebuffed by the 1st defendant. He stated that "I as majority shareholder of Sup
